The growing pet market offers a range of opportunities for farmers
If there was ever a good time to start a business catering to the needs of pets, it’s now, because there have never been so many owners.
For example, the number of dogs in the UK has soared by more than three million since March 2020, when Covid-19 measures came into effect.
These dogs need to be fed, walked, cared for, or somewhere to stay when their owners are away.
“It’s an industry with lots of different options, from making food to converting a farm shed into a dog grooming parlor or dog boarding, or dedicating land to a petting area. exercise for dogs, and there are all kinds of ideas around that,” says Michael Mack, independent rural consultant.
See also: So you want to get paid to have dogs on your land?
With little regional variation in the number of pets, most farms are well positioned to exploit this sector, so what are the considerations?
Do I need a building permit?
It depends on the type of business, but in most cases some form of consent will be required.
For example, creating an exercise yard in a field used for agriculture requires a consent to change of use, and if you want to use a shed for non-agricultural purposes, a building permit is required.
“If the planned activity is materially different from farming, the effects of those activities need to be assessed to determine if they are acceptable for that location,” Mack says.
Determine whether the development fits within the local authority’s long-term planning strategy, as set out in the local plan.
Access can be a sticking point and residents may have concerns about traffic, lighting and noise.
“In December, it gets dark at 4 p.m. So if you have a business that operates outdoors, it will need strong lighting, and that could be a problem if the field has neighbours,” says Mack.
There may be restrictions as it may be considered light pollution in a rural area without street lighting.
Environmental impact could also be a concern if a dog exercise area is considered – fields chosen for this type of activity are usually not very productive and for this reason usually have good biodiversity credentials .
Although there are multiple obstacles, Mack insists that none are insurmountable.
“Think about how you can eliminate or fix all these problems before you get to the planning stage,” he advises.
“In some cases, it’s just a matter of communicating with your neighbors before requesting a change of use, putting them in the picture and reassuring them.”
Agricultural diversifications are generally welcomed by local authorities, but applicants must still present a good file.
Are other authorizations/licences/training/qualifications necessary?
If you plan to make pet food, the Food Standards Agency requires it to be safe, produced under sanitary conditions and free from harmful substances.
The main legislation concerning the composition of pet food is the Feed (Composition, Marketing and Use) Regulations 2015.
The business must also be registered with the local trading standards office.
In the case of a dog exercise ground, a waste management strategy should be part of the business plan.
Different authorities have their own views on how dog waste should be handled, so research what is needed to satisfy your own authority.
Training and skill requirements are often overlooked by farmers in their diversification planning, says Mack, so make sure this need is properly assessed.
Thorough industry or product research is essential. “With pet food, you’ll have to figure out what your point of difference might be from other brands, because consumers rarely switch brands,” he says.
Most pet businesses need to be accessible to as many customers as possible. Farms on the outskirts of town can set up pet businesses very simply because the clientele is there, but it will be much more difficult to attract clients in remote locations.
As grant support for diversifications has diminished, it is advisable to work with a consultant to produce a business plan and understand the costs and how you will finance it.
If, for example, the project is to open a dog grooming salon in a barn, the building may simply need to be fitted out without structural modifications in order to keep costs down.
If the plan is to run it as a separate business and a loan is needed, some banks will not accept the application if the new business is not part of the farming business.
Are there any legal considerations to keep in mind?
Legislation requires pet food manufacturers not to mislead buyers or make medicinal claims.
If an ingredient is derived from an animal, Animal and Plant Health Agency approval is required, even if those ingredients are deemed fit for human consumption, as they are considered an animal by-product.
There’s also the safety and security of the dogs to consider if they’re on site – talk to an insurer.
Tax and accounting considerations
If the diversification involves growing crops for pet food or bedding, for income tax purposes this is considered “livestock farming” and would therefore be considered farming; this means that profits from these diversifications can be included in farm profits and may be eligible for averaging, advises tax expert Zoe Chandler, of accountant Old Mill.
“As profits will be those of an agricultural trade, so will losses, meaning that lateral loss relief is available to reduce taxable income from other sources,” she says.
“It also means that these profits can be added to other agricultural business profits when considering the loss relief restrictions of amateur farming.”
What about insurance?
Ask your insurance company for advice on what cover you need. Trade associations may offer advice and discounts, but at a minimum product liability insurance is necessary if you are selling a product. Liability is also necessary if the business involves people entering the property.
Case Study: Growing Hay for Pet Food
Ian and Helen Burrows, Selby, North Yorkshire
Growing and packaging Timothy hay as high quality food for small pets has allowed Ian and Helen Burrows to run a profitable business on their 105ha family farm.
Mr Burrows was a first-time farmer when they took over the holding at Newhay Grange near Selby, North Yorkshire, from Helen’s father.
The land base was not large enough to generate income from growing staple crops – growing specialty feeds for racehorses offered a higher return.
As this market became well-stocked, with more growers moving in, Mr. Burrows continued his research and found a niche to grow pet food under the Newhay Feeds brand. .
“I couldn’t find anyone producing quality Canadian Timothy hay in the UK. There were very few in Europe in general,” he says.
Mr. Burrows has worked with the Universities of Newcastle and York on the development of methods to preserve the nutrients and palatability of hay and on product development.
Hay must be dried within 48 hours of cutting, requiring a dryer and a specialized process to remove dust and spores.
The volume that can be dried has been the limiting factor in growth, but the business generates annual sales of 1.5 million 1kg bags and leases additional land to support the cultivation of 202ha of Timothy.
The three most important qualities are that the product is dry, fresh and green.
All hay produced at Newhay is laboratory tested at Sciantec in Cawood, Yorkshire.
The products, sold through independent stores, large retailers, supermarkets and direct sales, are suitable for domestic rabbits, guinea pigs and other small pets.
For this, accreditation as a feed manufacturer is necessary, says Burrows.
“Universal Feed Assurance Scheme (Ufas) and Feed Materials Assurance Scheme (Femmas) accreditation can take six months or more and it is costly to administer the required processes,” he says.
The scale of the initial investment was significant – the couple started farming from scratch and had no machinery. When the business started in 2006, they spent £500,000 on tractors, mowers, tedders, a rake and a baler.
An additional £150,000 was needed for the dryer and over £300,000 for the packing machine.
A fully enclosed, vermin-proof storage had to be built for 3,000 bales of hay and the baling machine.
The biggest challenge at the start was the lack of research to draw on.
“If you’re growing grass for dairy cows, there’s a wealth of information out there, but Timothy as pet food isn’t a standard cash crop,” says Burrows, who employs advice from specialized agronomists for cultivation.
He attended events and fairs to gain knowledge, used the internet for his research, and worked with universities and several companies.
The pet food market is much smaller than the horse market. “It’s not about volume but about producing the best quality product to capture the highest margin,” says Burrows.
“The reality is that anyone can produce cheap hay, but these products cost money to develop and the market is very specialized, and I don’t think that market is growing.”