Tutorial to Income Calculation
  • The calculator assumes that a farmer leases Direct Dairy™ hardware and the building from a bank at 7% annual interest for the period from 6 to 10 years (see full cost decomposition in this link).
  • The calculation result reflects the projected sales volume (in packages and euro) and net pre-tax earnings of your farm at full-capacity when all your raw milk is converted into premium packaged milk and sold to retailers and/or consumers.
  • Step 1. Fill your farm's data: number of cows, average daily yield, number of milking robots.
  • The farmer has two basic sales and distribution models: (a) distribution to retailers, hotels, restaurants, etc.; b) direct sales to consumers at farmer-owned points of sale (shops and/or vending machines) and fresh milk subscription with currier delivery to near-by consumers. In the first case, the milk will be sold at wholesale prices. In the second case, farmers will get a full retail price for their milk.
  • Step 2. For each of the above channels/strategies, select an appropriate price and weight numbers with the sliding scales. Please, take into account that your milk will be premium quality product with a strong promo support from DDH. Consider other factors like cow breed (milk from Jersey cows will sell at higher price than milk from Holstein cows), milk type (A2 milk will sell at higher price than A1 milk), etc.
  • Step 3. Evaluate your monthly cost of delivery to your potential points of sale (POS). This cost will depend on the distance to your major market and number of POS. Cold chain should be maintained throughout the whole route from your farm to POS.
  • Step 4. Think wisely what percentage of your packaged milk you could realistically sell directly to consumers. It will mean more costs and efforts, but the result is worth it because you'll re-distribute retailers' margin into your favor. Play with different scenarios to feel the difference.
  • Sales and distribution of your packaged milk is the key to your success. Think of all potential distribution channels, costs, price levels and potential problems that you might face. Please, note that farmers are responsible for sales and physical distribution of their branded milk while Direct Dairy Holding BV promotes your milk to local consumers to push up your sales and earnings.
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