Small Dairy Business Plan for On-Farm Mini-Processing Facility

Project Overview

Project Type: Farmer/Rancher
Funds awarded in 2002: $9,980.00
Projected End Date: 12/31/2005
Region: Southern
State: Arkansas
Principal Investigator:


  • Animal Products: dairy


  • Farm Business Management: whole farm planning, marketing management, feasibility study, agricultural finance, market study
  • Production Systems: agroecosystems, holistic management, integrated crop and livestock systems
  • Sustainable Communities: new business opportunities, employment opportunities, sustainability measures

    Proposal summary:

    The percentage of the retail dollar that dairy farmers receive for fluid milk has fallen from 54 percent in 1975 to 34 percent in 2000. This has made it more difficult for small dairy farmers and as they fail, larger dairies supply a larger percentage of the nation’s milk. This large supply from huge dairies (some of these milk 24 hours a day) causes prices to fall even further. To capture a larger share of the retail dollar this producer intends to market milk and value added products on his farm. He will contract with a consulting service to gather data on consumption of dairy products in his region. They will determine the potential market, for various dairy products, conduct surveys of consumer and store demand, develop scenarios of demand for different mixes of products and prepare a marketing plan of which methods and products are most appropriate for the producer and a market analysis showing customer profile, competition, risks, sales strategies and distribution channels. Lastly they will determine availability and costs of equipment. This information, although developed for one dairy, will be made available to other dairy farmers in field days and in publications.

    Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.