How to Start a Dairy Farm Business in India. Production Process of Dairy Products. Dairy Products with Cattle Breeding

Dairy farming is a type of agriculture that is focused on producing milk. This is different from raising animals to produce meat. Milk can be used to produce dairy products, including cheese. Species commonly used are cows (so-called dairy cows), but goats, sheep and camels are also used. Sometimes donkeys are used to produce an alternative to cows' milk for babies. Some babies can digest donkeys' milk better than cows' milk.

Producing milk has been part of farming for a long time. In the last century, farms have become more specialised. In the 20th century, some farmers started with farms that only produce milk.

Dairy farming is a large unorganized sector in India and a major source for livelihood in rural areas. Dairy farming is a class of agriculture for long-term production of milk, which is processed (either on the farm or at a dairy plant, either of which may be called a dairy) for eventual sale of a dairy product. Commercial and small scale dairy farming in India is no doubt playing an important role in the total milk production and economy of our country. And almost all regions of India are suitable for setting up dairy farming business. Dairy cow farming means ‘raising highly milk productive cows commercially for milk production purpose’.

Milk Production in India has increased manifold and in the last financial year, the total milk production in the country crossed the mark of 140 Million Tonnes. Milk is used as a food. It is used prepare curd, butter, ghee cream and ice cream etc.

The government is taking several initiatives and introducing yearly plans in order to boost the dairy market. The Indian dairy market is now witnessing the entry of a large number of foreign players. India’s demand for milk and milk products is increasing twice as fast as the production of milk. The market is also witnessing a consumer shift towards healthier products such as UHT milk, probiotic drinks, Processed Cheese, Curd, Butter Milk & Ghee etc.

India is one of the fastest growing markets for cheese with a total consumption of about 7,000 tons a year.  Cheese is becoming a popular item in the menu of all relatively affluent families. Slowly but surely, it will penetrate into the rural markets.Yogurt, traditionally known as “Dahi” in India, has been a part of the Indian meal, with home-made dahi consumed daily. The Indianpalate is well-accustomed to the taste of not only plain yogurt but also such form and taste variants as Lassi, Chaas, Srikhand, Mishti Doi, Raita, etc.

Breeding to meet the demand for beef production, owners also use selective breeding to attain specific traits in their beef cattle. An example of a desired trait could be leaner meat or resistance to illness. Breeds known as dual-purpose breeds are also used for beef production. These breeds have been selected for two purposes at once, such as for both beef and dairy production.

India possesses 27 acknowledged indigenous breeds of cattle and seven breeds of buffaloes. These well-defined breeds are found in the dry parts of the country. Good breeds of cattle are mostly confined to comparatively dry areas such as Haryana, Punjab, Rajasthan, Gujarat and Madhya Pradesh. Pastures in these areas may qualitatively be enough, but they are often scarce.

India is a land of opportunity for investors looking for new and expanding markets. Dairy food processing holds immense potential for high returns.The dairy food market in the India has witnessed a growth in recent years on account of rising demand for dairy food products fueled by expansion in milk production. The surge in growth is majorly originated from growth in Ice cream and Milk Powder as a segment of dairy food market. The growth in this segment has been largely led by the domestic factors such as innovative technology and rise in availability of variants. India dairy food market will grow at a considerable CAGR to cross INR 250 billion by 2019 due to the increasing number of dairy farmers and rising average yield of cows.

 

Few Indian Major Players are as under

•        Anmol Dairy Ltd.

•        Britannia Industries Ltd.

•        G R B Dairy Foods Pvt. Ltd.

•        Haryana Milk Foods Ltd.

•        Indiana Dairy Specialities Ltd.

•        Mahaan Foods Ltd.

•        Milkfood Ltd.

•        Nikumbh Dairy Products Ltd.

 

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Ø  Introduction

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·         Properties

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·         Uses & Applications

 

Ø  Market Study and Assessment

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Project at a Glance

Along with financial details as under:

 

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  •    Land & Building

            Factory Land & Building

            Site Development Expenses

  •    Plant & Machinery

             Indigenous Machineries

            Other Machineries (Miscellaneous, Laboratory etc.)

  •    Other Fixed Assets

            Furniture & Fixtures

            Pre-operative and Preliminary Expenses

            Technical Knowhow

            Provision of Contingencies

  •   Working Capital Requirement Per Month

             Raw Material

            Packing Material

            Lab & ETP Chemical Cost

           Consumable Store

  •   Overheads Required Per Month And Per Annum

         Utilities & Overheads (Power, Water and Fuel Expenses etc.)

             Royalty and Other Charges

            Selling and Distribution Expenses

  •    Salary and Wages

  •    Turnover Per Annum

  •   Share Capital

            Equity Capital

            Preference Share Capital

 

  •    Annexure 1:: Cost of Project and Means of Finance

  •    Annexure 2::  Profitability and Net Cash Accruals

                Revenue/Income/Realisation

                Expenses/Cost of Products/Services/Items

                Gross Profit

                Financial Charges     

                Total Cost of Sales

                Net Profit After Taxes

                Net Cash Accruals

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                Current Assets

                Gross Working. Capital

                Current Liabilities

                Net Working Capital

                Working Note for Calculation of Work-in-process

  •    Annexure 4 :: Sources and Disposition of Funds

  •    Annexure 5 :: Projected Balance Sheets

                ROI (Average of Fixed Assets)

                RONW (Average of Share Capital)

                ROI (Average of Total Assets)

  •    Annexure 6 :: Profitability ratios

                D.S.C.R

                Earnings Per Share (EPS)

               

             Debt Equity Ratio

        Annexure 7   :: Break-Even Analysis

                Variable Cost & Expenses

                Semi-Var./Semi-Fixed Exp.

                Profit Volume Ratio (PVR)

                Fixed Expenses / Cost 

                B.E.P

  •   Annexure 8 to 11:: Sensitivity Analysis-Price/Volume

            Resultant N.P.B.T

            Resultant D.S.C.R

   Resultant PV Ratio

   Resultant DER

  Resultant ROI

          Resultant BEP

  •    Annexure 12 :: Shareholding Pattern and Stake Status

        Equity Capital

        Preference Share Capital

  •   Annexure 13 :: Quantitative Details-Output/Sales/Stocks

        Determined Capacity P.A of Products/Services

        Achievable Efficiency/Yield % of Products/Services/Items 

        Net Usable Load/Capacity of Products/Services/Items   

       Expected Sales/ Revenue/ Income of Products/ Services/ Items   

  •    Annexure 14 :: Product wise domestic Sales Realisation

  •    Annexure 15 :: Total Raw Material Cost

  •    Annexure 16 :: Raw Material Cost per unit

  •    Annexure 17 :: Total Lab & ETP Chemical Cost

  •    Annexure 18  :: Consumables, Store etc.,

  •    Annexure 19  :: Packing Material Cost

  •    Annexure 20  :: Packing Material Cost Per Unit

  •    Annexure 21 :: Employees Expenses

  •    Annexure 22 :: Fuel Expenses

  •    Annexure 23 :: Power/Electricity Expenses

  •    Annexure 24 :: Royalty & Other Charges

  •    Annexure 25 :: Repairs & Maintenance Exp.

  •    Annexure 26 :: Other Mfg. Expenses

  •    Annexure 27 :: Administration Expenses

  •    Annexure 28 :: Selling Expenses

  •    Annexure 29 :: Depreciation Charges – as per Books (Total)

  •   Annexure 30   :: Depreciation Charges – as per Books (P & M)

  •   Annexure 31   :: Depreciation Charges - As per IT Act WDV (Total)

  •   Annexure 32   :: Depreciation Charges - As per IT Act WDV (P & M)

  •   Annexure 33   :: Interest and Repayment - Term Loans

  •   Annexure 34   :: Tax on Profits

  •   Annexure 35   ::Projected Pay-Back Period And IRR