Hi a friend of mine is interested in buying\investing in a dairy farm for 10 million rands?

Question

What are the factors he should take into account before deciding to buy the farm?

Answer 1

First off, the price of milk (in the store).  and what the future price of milk is likely to be.  What are the government requirement on selling milk, or milk products to the public.  What are the infrastructure requirements to support a dairy farm - cows, milking machines, milking barn, the feed for the cows, etc.  

How profitable is this operation??  Who is going to run this for for your friend??  Is he going to run it himself??  

Does your friend know the work a dairy farm is??  I grew up on a farm in Nebraska.  Neighbors of ours ran a dairy farm - several hundred cows.  They were up by 4:30 in the morning to begin milking & they were not finished till 10:00 at night.  Very busy operation, with few (if any days off).  The cows must be milked twice a day - morning & night.  

I think it was very stressful.  Our neighbor had a heart attack (and died) early 40's.  Unless your friend know's what he's getting himself in for, I would advise against it.  There may be money to be made here, but it is d**n hard work.

Answer 2

Watch out for the goats.