Bay of Plenty

This owner operated farm business of 160 effective hectares is near Edgecumbe. 

Milking 570-580 Friesian cows, on two similar sized milking platforms, the dairy operation is supported by 52ha which provides the majority of winter and young stock grazing. Planned start of calving is July 15.

Production is expected to be 215,000 kg milksolids - 370 kgMS/cow and 1,340 kgMS/ha. Pasture eaten is about 18 tDM per ha (3 year average excluding 16-17 flood affected season). Imported supplements (PKE) of about 0.6t DM per ha (3% total feed eaten) are used strategically through the spring and autumn. 80% of the herd are wintered off the milking area, and return just prior to calving.

2018/19 Numbers at a glance

Total kgMS Cows Milked Hectares (Effective) Net Dairy Cash Income ($/kgMS) Total Farm Working Expenses ($/kgMS) Total Operating Expenses ($/kgMS) Dairy Operating Profit ($/ha)
215,000 576 160 $6.76 $2.52 $3.09 $5,247

2018/19 Forecast Budget

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

Milk production for the season is budgeted at 215,000 kg MS. Budgeted income is based on an advance milk price of $5.32 per kg MS and deferred milk price of $1.10 per kg MS. Fonterra dividend is expected to be $0.25 per kg MS on 200,000 shares. This is net of DairyNZ levy based on 182,000 @ 3.6c per kgMS.*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 It may or may not be out of date based on new information from Dairy Companies.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.

1,406,200 6.54 2,441 8,789
Net Dairy Livestock Sales

Includes purchase and sale of 12 herd bulls. Also includes purchase of 30 extra in calf heifers ($46,500), as had a heavy cull late 17-18 season. Approximately 300 bobbies are sold, and 120 surplus/cull MA cows or R 2 heifers.

33,700 0.16 59 211
Other Dairy Cash Income

Rental for surplus farm cottage.

14,420 0.07 25 90
Net Dairy Cash Income 1,454,320 6.76 2,525 9,090

Expenses $TOTAL $/KgMS $/COW $/HA

Covers 2 full time herd managers - one for each farm. Provided with 3 bedroom house each, and working 12 days on 2 days off, all statutory holidays off plus 4 weeks a year annual leave. milker time. Owners provide relief milking cover.

(incl. ACC)
108,000 0.50 188 675
Animal health

This covers minerals via trough treatment, lepto vaccinations, annual blood tests, calf dehorning (with anesthetic), young stock drenches. BVD status is monitored through bulk milk sampling. Cows with low SCC are treated with teat seal at drying off and those with high SCC are treated with dry cow therapy.

24,000 0.11 42 150
Breeding and herd improvement

Includes cost of tail paint, 5 weeks of AB, lease of 3 bulls for the heifers and 2 herd Tests per year. There is no reproductive intervention (anoestrus treatments or metricheck).

20,500 0.10 36 128
Farm dairy

Follow recommended milk plant hygiene programme. Use the cheapest priced detergents. This covers two 20 a-side herringbone sheds.

9,500 0.04 16 59

Power is for two 20 a-side herringbone sheds.

(farm dairy, water supply)
18,500 0.09 32 116
Supplements made

Between 40-50 ha of silage is made each year. The majority is on the support blocks with 2/3 of the silage made being in a stack and 1/3 made as baleage. Cost covers contractors for all turning, stacking or baling.

(incl. Contractors)
19,000 0.09 33 119
Supplements purchased

Approximately 95 t PKE @ $ 215 per t landed. Equates to about 150 kg DM per cow.

24,000 0.11 42 150
Calf rearing

About 3 t calf meal.

2,000 0.01 3 13
Young and drystock grazing

Half the yearlings are grazed externally from June until early October when they are returned to the support block. This covers about 14 weeks grazing for about 50 animals @ $7.00 per head.

4,900 0.02 9 31
Winter grazing

Majority of cows are wintered on the support blocks, however, in an effort to reduce pressure on the support blocks this year, 100 in calf heifers will be grazed off externally for 9 weeks at a cost of $26 per head, plus $12 per head for freight.

24,600 0.11 43 154
Support block lease

6 ha of coastal land is leased.

5,000 0.02 9 31

Includes 80 kg N per ha for the milking area. One application of Phased N (20-30 kg N/ha) is used in the early spring to follow the herd.The non effluent area of 124 ha gets another application (approx 25 kg N per ha) in the spring and one in the autumn. Milking area non effluent block gets 340 kg per ha spring and autumn of fertiliser mix as per Balance recommendations (contains biophos, MoP and DAP). Support block gets spring and Autumn fertiliser including N. Lime was applied last autumn to the whole farm.

(incl. N)
67,000 0.31 116 419
Regrassing & cropping

Pasture renovation is a regular part of the farming plan, mainly to repair any damage done in the spring and from mobbing in the summer heat. Any paddocks that are underperforming will be regrassed as well, so the area renovated each year can vary. Undersowing is done by farm owner. Seed used is what ever is the recommended rye/white clover mix at the time. No cropping is done as soils are too wet.

10,500 0.05 18 66
Weed and pest

Attention is given to keeping the farm weed free so as much area as possible is available for grass to grow. Covers annual weed spray to control buttercup and thistles.

1,800 0.01 3 11
Vehicles & fuel

Have 2 tractors between the 2 farms and 2 wheel motorbikes. No 4 wheelers used.

28,000 0.13 49 175

Policy is to keep up to date with R & M so that in low payout years spending can be cut to a minimum. Having herringbone sheds means very little R & M needed on milking shed and plant. Have own mower and undersower but very little other machinery. This budget includes $6,000 for Plant R & M.

(land, buildings, plant, machinery)
61,000 0.28 106 381
Freight and general farm expenses

Includes $10,800 for freight which relates to capital stock purchases. Protective clothing and health and safety costs are included here.

13,000 0.06 23 81

Do all own administration, budgets, and payroll. Use accountants for tax advice. Includes about $6,000 of legal and consulting costs relating to succession planning.

15,000 0.07 26 94

Keep insurance cover to a minimum. Do not have business interruption cover.

8,000 0.04 14 50
6,700 0.03 12 42

A large portion of rates is paid to Environment BoP for flood protection.

70,000 0.33 122 438
Total Farm Working Expenses 541,000 2.52 939 3,381
Cash Operating Surplus 913,320 4.25 1,586 5,708

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.

Value of change in Dairy livestock

Culled heavily late in the 17-18 sason so opening numbers of MA and in calf heifers are 30 less than needed at start of calving. Increase in value of livestock offsets the purchase in June of 30 in calf heifers for $46,500.

49,500 0.23 86 309
Labour adjustment

Covers owners unpaid input of 0.8 FTE. This is for all relief milking, and cover for busy periods like silage making, plus all administration and strategic planning and governance.

58,000 0.27 101 363
Feed inventory adjustment

Plan to have no change in feed on hand, however this does depend on how the season unfolds.

0 0.00 0 0
Owned support block adjustment

47 ha of owned support land valued at a market rental equivalent of $750 per ha per year.

35,250 0.16 61 220

Based on 16-17 actuals, and increased to allow for additions to fixed assets in 20107-18. Farm has a low cost infrastructure and minimal machinery.

30,000 0.14 52 188
Dairy Gross Farm Revenue 1,503,820 6.99 2,611 9,399
Dairy Operating Expenses 664,250 3.09 1,153 4,152
Dairy Operating Profit 839,570 3.90 1,458 5,247

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