Lower North Island

Daniel and Rochelle Cammock are Fonterra Suppliers on a 50% irrigated Hawkes Bay/Wairarapa farm.

They milk 490 cows on 190 ha, milked as two herds of 280 and 200 cows. The business has 58 ha of support land nearby. 

The majority of imported feed is in the form of baleage, cereal silage, hay and winter grazing, although this season about 110 kg DM per cow of PKE has been added to the budget for use in the spring as supplements on hand are less than needed.

The predominantly crossbred herd is stocked at 2.6 cows per ha. Calving starts July 27.

2018-19 Numbers at a glance

Total Milksolids Cows Milked Hectares (Effective) Net Dairy Cash Income ($/kg MS) Total Farm working Expenses ($/kg MS) Total Operating Expenses ($/kgMS) Dairy Operating Profit per ha ($/ha)
190,000 490 190 $7.06 $3.63 $4.05 $3,041

2018-19 Forecast Budget

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

Budgeted milk revenue is based 190,000 kg MS @ $6.36 per kg MS for advance and deferred payments. Dividend is based on 185,000 shares@ $0.37 per share. This is net of DairyNZ levy (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 It may or may not be out of date based on new information from Dairy Companies.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.

1,235,160 6.50 2,521 6,501
Net Dairy Livestock Sales

Approx 85 Cull MA cows @ $600 per head, 200 bobbies @ $30 per head, 90 beef calves @ $130 per head, 80 Wagyou weaner calves on contract @$510 per head, 10 bulls sold @1,100 per head, less, 8 bulls purchased for $1,700 per head.

106,900 0.56 218 563
Net Dairy Cash Income 1,342,060 7.06 2,739 7,063

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

2 full time staff plus relief of 0.6 FTE, plus owners salary (1.0 FTE ). All P.A.Y.E. Make all staff take holidays to avoid paying out any outstanding holidays. Operate a roster so staff only ever have to do one milking a day.

(incl. ACC)
195,000 1.03 398 1,026
Animal health

Try to act quickly on any ill cows, selective dry cow therapy (only 250 SCC or higher). Identify lame cows early and put on OAD treat ASAP, lepto vac own stock, use mineral based mix and Mag Cl right until January. Try to minimise need for antibiotics through good observation and prompt action.

15,200 0.08 31 80
Breeding and herd improvement

Milk low CS cows OAD, metricheck all TAD cows and treat where necessary. No synchronising or CIDRS. Mating is 3-4 weeks AB then 6-7 weeks natural mating with own bulls. Replacement rate 18%. Upped herd test to 4 x year OAD to get more info. Prepared to drop herd testing in low payout years.

21,800 0.11 44 115
Farm dairy

One person milking most of the time, work roster so staff only in dairy OAD all season. Train staff to identify issues and maintain frequent monitoring. Have efficient procedures with some automation. Automatic plant cleaning system with controlled measured detergent use has saved money. Always looking for areas to improve.

9,600 0.05 20 51
Electricity

Have efficient procedures with some automation. Review power company deals regularly to ensure getting best prices. Use heat recovery from chiller to keep power costs down. Primary chiller only comes on when milk lift pump is in use. Makes use of off peak/night rate power rates.

(farm dairy, water supply)
18,700 0.10 38 98
Supplements made

Contractor only for baling - everything else done by farmer - Covers 1100-1300 bales (250 kg DM/bale) silage/hay.

(incl. Contractors)
35,100 0.18 72 185
Supplements purchased

$2000 for molasses used to aid delivery of minerals etd in spring. Balance is contingency for up to 300 bales of hay (200 kg dm). This will will be bought from a neighbouring property. This year the budget includes 60 t PKE @ $270 landed, for the spring to make up for the lack of supplement carried forward from 2017-18.

35,000 0.18 71 184
Calf rearing

100 heifer replacement, 7 replacement bull calves and 80 Wagyu calves to weaning. Includes 4 t calf meal - adlib whole milk week one, put outside after 7-10 days fed OAD with combination stored/fresh whole milk( colostrum/whole milk chilled entire calving to 7 deg C). Fed adlib high quality balage into weaning and onwards.

3,000 0.02 6 16
Young and drystock grazing

Young stock grazed on support blocks.

0 0.00 0 0
Winter grazing

230 cows are wintered for 8 weeks on the support blocks.

0 0.00 0 0
Support block lease

26 ha support leased - in conjunction with 37 ha (32 effective), owned support block provides grazing for young stock from weaning until due to calve. Also winter 230 cows, and make supplements 600 bales (250 kg DM/bale).

34,300 0.18 70 181
Fertiliser

Conduct soil testing on the 8 different blocks/areas around the farm every year. Use the RPR based fertiliser which also helps to keep liming to minimum, mainly only liming cropping paddocks. Have high Resin P levels so intend to mine that for a while. Application rates vary on the different blocks as to what the soil levels require. Effluent will be spread to 60 ha via mainline irrigation this season reducing fert on that area which will only require additional P and Se. N strategically used, but consider environmental conditions ie soil temp, soil moisture, general weather etc before application. 46 kg N per ha over the whole year applied over whole farm (Dairy and support). All fert applied using GPS results in additional savings because of more accurate placement. Spread our own fertiliser with GPS management placement - no real money saved here but get timing better.

(incl. N)
76,500 0.40 156 403
Irrigation

40 ha K lines, 38 ha traveling spray irrigator. Daily volume use from river allocation has been reduced 30% so this will effectively reduce the amount of irrigation that can be done. 10 ha more of mainline effluent irrigation is planned so this will help off set the reduction in water uptake allowed.

22,300 0.12 46 117
Regrassing & cropping

Plan to grow 14.5 ha this year of winter oats (4-5 t DM/ha yield) which is then planted in October in a forage Barley/ryegrass mix. This is made into silage in January (14t DM/ha average crop yield). The grass component keeps growing (2t DM/ha yield), then direct drilled in March/April with permanent pasture. Minimum tillage options are used for $$ savings. Also grow 12 ha Barkant turnips. Includes seed, cultivation and regrassing costs.

36,000 0.19 73 189
Weed and pest

Mainly weed control herbicides. This is up on previous years as there will be a more concerted effort control weeds in new pasture, plus using a more robust spray programme including boom spraying.

6,000 0.03 12 32
Vehicles & fuel

Includes $15,000 fuel and oil. 2 wheelers used where possible, team focused on being efficient , no unnecessary tripping around, tractors operated in an efficient manner, gear cleaned once a week any defects reported ASAP. Fuel usage covers cartage of feed between Dairy farm and runoff as well as all harvesting costs apart from baling.

34,600 0.18 71 182
R&M

Repair most things themselves (welding, general repairs etc). Have a maintenance schedule for gear to be adhered to weekly, cleaning/greasing/washing etc. Team expected to maintain gear to a high standard.

(land, buildings, plant, machinery)
65,500 0.34 134 345
Freight and general farm expenses

Protective clothing, dog food, and freight. Includes $10,000 for contingencies.

19,800 0.10 40 104
Administration

Includes bank charges, accountancy. Run our own cashbook, monitor costs closely. Do own GST returns and P.A.Y.E wages etc,. Do not use outside consultants (except accountant). Use reference material from DairyNZ (already paying for it ;-))

9,500 0.05 19 50
Insurance

Review regularly, raise excesses, cover for livestock losses, loss of milk -this includes income protection insurance. Changed companies recently to save $2-3000

13,500 0.07 28 71
ACC
7,500 0.04 15 39
Rates
30,000 0.16 61 158
Total Farm Working Expenses 688,900 3.63 1,406 3,626
Cash Operating Surplus 653,160 3.44 1,333 3,438

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

Plan to have a slight increase in R 1 heifers of (4 )and R 1 bulls (1). Based on 2018 IRD National Average Market Values.

5,000 0.03 10 26
Labour adjustment

The business pays the Owners salary so remuneration is included in the cash farm working expenses.

0 0.00 0 0
Feed inventory adjustment

Expect to have 50 t DM more on hand at the end of the season as the inventory on hand going into the 18-19 season was lower than needed due to less supplement being made in the spring of 2017. This offsets the PKE added to the budget.

15,000 0.08 31 79
Owned support block adjustment

32 effective ha of hilly land @ $550 per ha estimated market rental.

20,300 0.11 41 107
Depreciation

Based on 2016-17 financial statements plus allowance for addition of assets/development.

75,000 0.39 153 395
Dairy Gross Farm Revenue 1,347,060 7.09 2,749 7,090
Dairy Operating Expenses 769,200 4.05 1,570 4,048
Dairy Operating Profit 577,860 3.04 1,179 3,041

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