Bay of Plenty

This low input, owner operator farm near Opotiki, in its second full season of once-a-day milking, has 285 Jersey cross cows on 120 ha. Topography of the farm is moderate to steep with only 25% of the farm area able to be harvested for hay or silage.

Weaners are grazed on areas of the farm that are unable to be accessed by in-milk dairy cows, equating to approximately 6 ha (5.0 % of the 120 ha). The herd is milked through a centrally located, 40 aside herringbone shed with 80% of paddocks less than 20 minutes’ walk to the dairy. The farm has an adjacent 40 ha support block of steep hill country.

The 2018-19 season mean calving date is expected to be about 5 days earlier than previous years. The challenge will be to maintain high pasture utilisation with a lower stocking rate, (285 cows compared with 305), through the spring period so that the herd peaks well on OAD milking in order to achieve production targets of 85,000 kg MS (708 kg MS/ha and 298 kg MS/cow).

Operating expenses are budgeted to be $3.93 per kg MS (FWE $2.61).

2018/19 Numbers at a glance

Total kgMS Cows milked Hectares (effective) Net Dairy Cash Income
($/kg MS)
Total Farm Working Expenses
($/kg MS)
Total Operating Expenses ($/kgMS) Dairy Operating profit
($/ha)
85,000 285 120 $7.23 $2.60 $3.92 $2,164

2018/19 Forecast Budget

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$TOTAL $/KgMS $/COW $/HA
Net Milk Sales

Milk revenue is based on 85,000 kgMS @ $5.00 per kgMS advance, 79,000 kg MS @ $1.20 per kg MS deferred and 99,000 shares @ $0.40 per share dividends. Milk revenue is net of DairyNZ levy of 3.6 c per kg MS. This milk income is the farmers best estimate of their likely net milk sales. It may or may not be out of date based on new information from Dairy Companies. It does not necessarily reflect DairyNZ's milk price forecast.

556,340 6.55 1,952 4,636
Net Dairy Livestock Sales

Allows for sale of 60 MA cows @ $600 per head, 175 bobbies @ $20 per head, 40 bobbies @ $40 per head and 3 R 3 year old bulls @ $2,000 per head.

47,100 0.55 165 393
Other Dairy Cash Income

Rent from surplus farm housing.

11,000 0.13 39 92
Net Dairy Cash Income 614,440 7.23 2,156 5,120

$TOTAL $/KgMS $/COW $/HA
Wages

Casual labour from post calving to reduce hours worked on farm. Equates to approximately 0.2 FTE.

(incl. ACC)
12,500 0.15 44 104
Animal health

Keep these costs low by using preventative treatments and ensuring stock health is maintained. No dry cow therapy is used, just observation, treating with milking cow antibiotics and regular teat spraying during the dry period. SCC 2017-18 season was 231,000 compared with 257,000 for 2015-16.

9,500 0.11 33 79
Breeding and herd improvement

No anoestrous treatments used, do 3 weeks of AB, 6 weeks with 6 bulls. Empty rate of 8% for 17-18 season with a planned start of mating 4 days earlier than the previous year. Includes 4 herd tests per year and 3 Bulls leased @ $300 per head.

13,400 0.16 47 112
Farm dairy

40 aside herringbone in centre of farm. Cows are milked once a day for the whole season. Cup removers make milking a one person job most of the year.

5,500 0.06 19 46
Electricity

Re-negotiated the price last season and got a reduction of $2000.

(farm dairy, water supply)
13,500 0.16 47 113
Supplements made

Make most of their own silage in conjunction with neighbours help, so usually no contractor costs, only the cost to cover the stack. Neighvours all assist each other at harvest time - saves costs. Have included an allowance of $3,000 for contractors for silage as a contingency in case of gear failure. Also includes $2,000 for contractor to bale hay ($20 per bale for 100 bales).

(incl. Contractors)
6,000 0.07 21 50
Supplements purchased

Have allowed for 60t PKE in spring @ $310 per ton landed, and 10 t PKE @ $310 per ton landed for winter 2018 (as supplement for thinner cows in lieu of hay/silage as quantities made in 17-18 were down). This is less than half the amount of imported feed compared with 2 years ago.

21,700 0.26 76 181
Calf rearing

The plan is to rear 55 heifer calves this season. Calf rearing cost is for 1.5 t calf meal.

2,000 0.02 7 17
Fertiliser

Maintenance fertiliser applied only - 15% potassic super with 3 kg/ha of durasul at 600 kg/ha per year in two split dressings. Low N use on this farm, (40 kg N per ha). All fertiliser is flown on due to the steep contour of the property. This is the cost of fertiliser for both the milking area and the support block (160 ha total).

(incl. N)
48,000 0.56 168 400
Regrassing & cropping

Have moved away from cultivation so have a nil cultivation policy. This cost covers 5 ha of undersowing @ $300 per ha for undesowing and seed ($150 per ha each). Another $1,000 for seed is budgeted for and will be flown on to the hills if conditions are suitable at the time of flying on fertiliser on to the support block .

2,500 0.03 9 21
Weed and pest

This includes $3,000 for helicopter spraying of gorse and blackberry on the support block. This happens every second year. Weeds on the dairy area are sprayed with knapsacks.

10,000 0.12 35 83
Vehicles & fuel

Owners do most of their own tractor work. Very little is contracted out. Includes about $7,000 for fuel, the rest is repairs and maintenance on on the vehicles.

14,000 0.16 49 117
R&M

No major R & M planned. The budgeted amount is about average for the farm over the past 5 years

(land, buildings, plant, machinery)
27,000 0.32 95 225
Freight and general farm expenses

Includes protective clothing and freight for stock sold. Plus costs for 4 working dogs of about $2,000.

6,000 0.07 21 50
Administration

Farmers do their own GST and budgets. Includes accountancy, communication and general office costs.

7,000 0.08 25 58
Insurance
5,500 0.06 19 46
ACC
4,600 0.05 16 38
Rates
12,000 0.14 42 100
Total Farm Working Expenses 220,700 2.60 774 1,839
Cash Operating Surplus 393,740 4.63 1,382 3,281

Non-cash adjustments have been included below the cash analysis to enable fairer comparisons to be made between farms. These adjustments are not part of a cash budget but are important to fully understand the efficiency of the farm business.

$TOTAL $/KgMS $/COW $/HA
Value of change in Dairy livestock

Based on 5 less R 1 heifers, 15 more R 2 heifers, 25more MA cows and 2 less bulls on hand at the end of the season @ the IRD 2018 National Average Market Values.

-22,000 -0.26 -77 -183
Labour adjustment

Unpaid labour adjustment is based on 1 FTE unpaid management and .4 FTE unpaid family labour. Being once-a-day for the full season has reduced the unpaid labour by 0.6 FTE.

70,000 0.82 246 583
Feed inventory adjustment

Plan to have 24 t DM more feed on hand at the end of the season as have gone into the 2018 winter with less feed than usual as less supplement was made in the 2017-18 season. This is valued at $100 per t ($0.12 per kg DM), being the approximate cost to make the supplement (direct costs and fuel).

2,900 0.03 10 24
Owned support block adjustment

The 40 ha adjacent to the milking area that is used for support area is very steep (nearly vertical in some places). The owned support block adjustment is based on $250/ha.

10,000 0.12 35 83
Depreciation

Based on 2016-17 financial statements and allowing for asset purchases and sales for 17-18 and 18-19 .

35,000 0.41 123 292
Dairy Gross Farm Revenue 592,440 6.97 2,079 4,937
Dairy Operating Expenses 332,800 3.92 1,168 2,773
Dairy Operating Profit 259,640 3.05 911 2,164

More Information

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