Bay of Plenty

This low input farm business near Edgecumbe, milks on two similar-sized platforms with a support block providing the majority of winter and young stock grazing. 

Farm Facts

Business type: Owner-operator
Location: Edgecumbe, Whakatane
Farm size: 160ha effective milking platform, 52ha effective support block nearby (47 ha owned and 5 ha leased)
Peak cows: 580 FX
PSC: 15/07/2021 cows and heifers
Stocking rate:
3.6 cows/ha
Farm system:
2 (1-10% feed imported)
Wintering system: 80% of herd wintered externally or on support block for 6-8 weeks
Production: 240,000kg MS, 1,500kg MS/ha, 414kg MS/cow (3 year average production pre-2017 Edgecumbe flood is 241,000kg MS, 3 year average post flood is 211,400kg MS)

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Numbers at a glance

Financial KPI 2021-2022 budget

Physical KPI - 2020-21

Net dairy cash income

$/kgMS

Total farm working expenses
$/kgMS
Total operating expenses
$/kgMS
Dairy operating profit
$/ha

Pasture and crop harvested
t DM/ha

Purchased N surplus
kg N/ha/yr *
Methane Emissions
t CO2 equiv/ha/yr *
Six week in-calf rate
%
$7.74 $2.62 $3.17 $6,865 17.5 -1

10.8

65

*Find out more about these KPI's and how to calculate them for your own farm here.

Management decisions

Season review

2021-22 Forecast Budget

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

Milk production for the season is budgeted at 240,000 kg MS. Budgeted income is based on an advance milk price total of $5.78 per kg MS and a deferred milk price of $1.54 on 240,000 kg MS. This is net of DairyNZ and bio-security levies, (6.0 c per kgMS tota).*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 It may or may not be out of date based on new information from Dairy Companies.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.

1,746,600 7.28 3,011 10,916
Net Dairy Livestock Sales

This is based on selling 125 surplus/cull MA cows or R 2 heifers @ $600, 30 R 2 beef animals @ $1,100 and approximately 420 bobbies @ $30. The budget includes $13,200 to purchase 15 bulls. The expected sale price for the bulls is about $10,000. This is market dependent and the bulls could be leased instead.

110,000 0.46 190 688
Net Dairy Cash Income 1,856,600 7.74 3,201 11,604

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

Covers 2 full time herd managers - one for each farm. Provided with a 3 bedroom house each, and working 11 days on 3 days off, all statutory holidays off plus 4 weeks a year annual leave. An additional staff member is employed and shared between both farms to provide relief milking, tractor work and any other support needed. This has reduced the owner input and allowed for additional time off for the herd managers.

(incl. ACC)
192,000 0.80 331 1,200
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. Pregnancy testing via milk sampling is included here.

38,300 0.16 66 239
Breeding and herd improvement

Includes cost of tail paint, 5 weeks of AB and 2 herd Tests per year. There is no reproductive intervention, (anoestrus treatments or metricheck). The breeding policy now is to mate A2 cows to A2 bull semen so there is additonal cost for selective mating. Includes $7,800 for bulls leased.

32,500 0.14 56 203
Farm dairy

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

14,500 0.06 25 91
Electricity

Power is for two 20 a-side herringbone sheds.

(farm dairy, water supply)
14,700 0.06 25 92
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)
23,900 0.10 41 149
Supplements purchased

Approximately 110 t PKE @ $ 270 per t landed. Equates to about 170 kg DM per cow. Mainly for summer and autumn use.

21,200 0.09 37 133
Calf rearing

About 3 t calf meal. Plan to rear about 140 replacement heifers.

3,000 0.01 5 19
Young and drystock grazing

All yearlings are grazed on the support blocks until early May, but may return to the milking platform in the late spring early summer to help control surplus feed. Calves go to the support block at weaning. They are wintered on the milking area from May to July and go to the support block when the cows come home.

0 0.00 0 0
Winter grazing

110 in-calf heifers will go to external winter grazing from May 1st until just prior to calving in mid-July. The rest of the in-calf heifers and MA cows are wintered on the support blocks until just prior to calving.

30,200 0.13 52 189
Support block lease

6 ha of coastal land is leased.

4,500 0.02 8 28
Fertiliser

This is net of Fertiliser rebates. Includes 75-80 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.

(incl. N)
32,300 0.13 56 202
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 under performing 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.

1,800 0.01 3 11
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. Dock are becoming a significant problem on the support blocks so a weed control programme for docks has been added to the farm plan - this costs about $6,000 per year.

2,100 0.01 4 13
Vehicles & fuel

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

30,900 0.13 53 193
R&M

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 $7,000 for Plant R & M and $12,000 for tracks and races.

(land, buildings, plant, machinery)
49,600 0.21 86 310
Freight and general farm expenses

Protective clothing and health and safety costs are included here.

6,200 0.03 11 39
Administration

Do all own administration, budgets, and payroll. Use accountants for tax advice.

16,800 0.07 29 105
Insurance

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

15,600 0.06 27 98
ACC
5,400 0.02 9 34
Rates

A large portion of rates is paid to Environment BoP for flood protection. Rates now include extra rates to cover repairs and improvements to flood control in the region after the 2017 floods.

92,100 0.38 159 576
Total Farm Working Expenses 627,600 2.62 1,082 3,923
Cash Operating Surplus 1,229,000 5.12 2,119 7,681

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

Livestock numbers will incrfease slightly with 9 more R 1 heifers as the number of R 1 heifers will drop to about 140. Cows and R 2 heifers to calve with remain at about 600.

1,600 0.01 3 10
Labour adjustment

Covers owners unpaid input of 0.7 FTE. This is for some relief milking, and cover for busy periods like silage making, plus all administration and strategic planning and governance.

58,000 0.24 100 363
Feed inventory adjustment

Expect to have similar amounts of supplements on hand at the end of the season.

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 0.15 61 220
Depreciation

Based on 19-20 actuals, and adjusted to allow for additions/sales to fixed assets in 2020-21. Farm has a low cost infrastructure and minimal machinery.

39,000 0.16 67 244
Dairy Gross Farm Revenue 1,858,200 7.74 3,204 11,614
Dairy Operating Expenses 759,850 3.17 1,310 4,749
Dairy Operating Profit 1,098,350 4.58 1,894 6,865

More information

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