2021-2022: These farm owners will not be continuing as part of this project for the 2021-2022 season due to other commitments. We would like to thank them for their generosity in sharing their information.
Business type: Owner operator
Location: Dannevirke, Tararua
Farm size: 180ha eff milking platform, 71ha eff support block nearby
Peak cows: 490 FJX milked as two herds
Stocking rate: 2.72 cows/ha
Farm System 3: 11-20%
Production: 185,000kgMS/year 1030 kgMS/ha 380 kgMS/cow (182,150 2 year average)
Wintering system: 60% herd wintered on support block for 8 weeks
Dairy farming is facing many new challenges on the environmental front, and the key approach is to focus on continuing to do things well. These farmers are excited to be able to show that it is possible to achieve reasonable environmental KPI’s and still remain profitable while farming within environmental limits.
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Numbers at a glance
Financial KPI 2020-2021 Actuals
Physical KPI 2020-21
Net dairy cash income
|Total farm working expenses
|Total operating expenses
|Dairy operating profit
Pasture and crop harvested
|Purchased N surplus
|Six week in-calf rate
*Find out more about these KPI's and how to calculate them for your own farm here.
Strategy and financial
Maintain a focus on why we do what we do. “For our family, in a sustainable and profitable way!!”
Concentrate on doing the basics well - forget about marginal inputs, (there are no easy fixes – if it sounds too good to be true it probably is!).
Employ good staff, with a work environment that ensures a good retention rate.
Surround ourselves with good positive people.
Good financial management and cost control are key to the success and profitability of this business.
Budgets are prepared and all aspects of the business – financial and physical are frequently monitored and adapted.
Evaluation and justification of all expenditure using proven science and best practice as a yardstick make cost control easier.
Environmental KPI’s and targets are important considerations when preparing the budget, particularly Fertiliser, nitrogen use and imported feed.
Continue to repay debt to strengthen the financial position.
Farm policy and infrastructure
- The farm dairy is a 30 aside herringbone shed which is 3 km from the furthest paddock.
- 15% of the milking area is on average 30 m different in height to the dairy shed.
- Internal infrastructure is in good order, (buildings, races, fencing, water supply and effluent system), with regular maintenance and upgrades included in the budget each year.
- Production is achieved through a mainly grass/forage-based system, (as grass or grass/cereal silage or hay).
- The aim is to have high utilisation of pasture using the herd and only conserving the genuine surpluses to minimise waste. Zero topping is done if possible.
- Up to 13% of the cows intake is imported as off farm grazing and silage or hay.
- Approximately 10% of the milking area is cropped annually.
- The support blocks enable the business to be self-contained with minimal reliance on external resources. The focus is to ensure maximum returns are gained from the milking area by efficiently using the grazing and supplements supplied by the support block.
- The support block provides winter grazing for 230 MA cows for 7-8 weeks. All young stock and bulls are grazed off the milking area but do come back at critical times to help with pasture quality control. Eg to graze new pasture or clean up higher residuals behind the milkers.
- Feed policy
Cow intakes are monitored and supplements added or removed accordingly to ensure post grazing pasture residuals are maintained at the correct levels.
Supplements used will primarily be silage, baleage or hay, but may include a small amount of PKE if the amount so forage supplements on hand is less than needed.
Tend to adjust SR when required in response to abnormal seasonal events, droughts etc, or use OAD, to reduce feed demand on farm for short periods rather than putting more supplements in.
Culls sent to works early so valuable feed isn’t used during the autumn on cows that will not be in the herd next season.
60% of the herd is wintered on the support block. The balance remain on platform, mobbed based on weight/CS factors, with lighter mobs fed to get to CS 5 by calving, (usually baleage or cereal baleage). Usually easy to achieve because both herds milked OAD last 4-6 weeks of season.
Pasture monitoring is key. Weekly farm walks and feed planning are done all year.
Protecting pasture is critical, with every effort made to minimise pugging or over grazing.
- Supplements made
Approximately 1100-1300 bales, (250 kg DM/bale), of silage and hay are made on both the milking area and the support block. 70-80 % of this will be from the support blocks.
All harvesting work apart from baling is done by the farmer.
- Supplements purchased
Usually little or no supplements are purchased, although the budget does have a contingency to allow for the purchase of 30 t PKE for use in the spring in the advent of adverse conditions, particularly if supplements carried forward are below budget.
Molasses is used to aid delivery of minerals in the spring.
- Cropping and Pasture renewal
The plan is to grow 7-8 ha of winter oats, (4-5 t DM/ha yield), which is then planted in October in turnips, along with another 10 ha of Barkant turnips. Minimum tillage options are used for $$ savings. Includes seed, cultivation and regrassing costs. There is allowance in the budget for additional undersowing in the autumn if needed.
- Feed policy
- Milked in two mobs 150 young and at risk cows and 340 MA cows.
- Rely on good observation and prompt action to minimise the need for antibiotics and veterinary intervention. Have a proactive approach though good practice and preventative programmes.
- Prepared to use OAD milking prior to mating particularly with the smaller younger herd to reduce stress and improve energy balance to improve reproduction performance.
- 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, maximum mating period is 10 weeks. Replacement rate 18%. Upped herd test to 4 x year OAD to get more info. Prepared to drop herd testing in low payout years.
- Six week in-calf rate is over 80% which is above the industry target.
- Look to increase livestock income by using beef bulls once AB is finished. This provides higher value options for non-replacement calves.
- Plan to rear 90 heifer replacements, up to 10 replacement bull calves and 50-60 beef calves. The beef calves may be sold as weaners or carried through, depending on feed supplies and market prices. The calves are fed ad lib 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 ad lib high quality baleage through to weaning and beyond.
- Focus on cow condition at key times.
People, health and safety
- Two full time staff plus relief staff of 0.2 FTE are employed
- The owners are paid a market rate salary for 1.4 FTE of input.
- The farm roster is set up to ensure that staff only ever have to do one milking a day.
- All staff must use all holiday leave each year rather than have leave paid out.
- Soils and fertility
75% of the farm is Gley soils which are inherently poorly drained. The balance is soil types that are well-drained.
Fertiliser applied is based on soil test recommendations at levels that are optimum for the soil types.
Use of RPR based fertiliser helps to keep liming to minimum, so now mainly only lime the cropping paddocks.
- Nitrogen and fertiliser
Farming within environmental limits is very much a focus, in particular limiting N leaching levels. N is used strategically up to 50 units annually on both the milking platform and the support blocks.
All fertiliser is applied using GPS which results in additional savings because of more accurate placement. Doing all the spreading themselves means application can be timed to best suit weather and soil conditions for more optimal results.
43% of farm is under irrigation with 40 ha of K lines, 38 ha under traveling spray irrigator. Daily volume use from river allocation has recently been reduced 30% so this will effectively reduce the amount of irrigation that can be done. Effluent irrigation now going through the main irrigation line will help offset the reduction in irrigation water allocation.
Effluent is spread to 60 ha via mainline irrigation which has reduced fertiliser requirements on that area. Only additional P and Se will be applied.
The area under effluent irrigation is still only about 1/3 of the milking area so as cash flow allows more area will be included.
- Riparian Planting
Riparian planting is in the budget and ongoing.
- Soils and fertility
2020-21 Season Review
2020-21 Numbers at a glance
Milk Production (kgMS/ha) 1,028 1,113 Milk Production (kgMS/cow) 378 417 Net Dairy Cash Income ($/kgMS) $6.86 $7.44 Total Farm Working Expenses ($/kgMS) $3.61 $3.28 Cash Operating Surplus/Deficit ($/kgMS) $3.25 $4.16 Gross Farm Revenue ($/kgMS) $6.95 $7.55 Operating Expenses ($/kgMS) $4.11 $3.65 Operating Profit ($/ha) $2,919 $4,334
*These KPI's are based on cash book actuals to 31 May 2021 and estimated non-cash adjustments. The final financial performance based on financial statements may differ.
- The 2020-21 season will be remembered as one where pasture grown and milk price received were both well above budget.
Operating profit for the 2020-21 season, based on cashbook analysis, is estimated to be $4,334 per ha, the highest achieved for this farm in the last seven years . This is well above the DairyNZ 2020-21 estimate of $2,208 per hectare for Lower North Island owner operators and nearly 50% up on the budgeted profit of $2,919 per ha.
- The 2020 winter was mild and pasture growth was the best this farm has seen in over 20 years. The usual hot dry conditions prevailed from late January to late March, however regular rainfall from early April meant irrigation for the year was 20% less than previous years and less supplement was needed in the latter part of the season.
- Production was 200,254 kg MS which was 8.25% up on budget and 10.25% up on last season’s total of 181,622 kg MS.
- The milk price received of $6.99 per kg MS was $0.58 above budget, so with the extra milksolids produced, milk revenue received for the year was 17% up on budget.
- Farm working expenses were $11,500 less than budget and finished at $3.28 over the 200,254 kg milksolids produced. This is $1.71 per kg MS lower than the DairyNZ estimate of $4.99/kgMS for the regions owner operators.
- The savings in farm working expenses came from less purchased feed, lower animal health costs and lower AB and herd testing. Vehicle costs and repairs and maintenance costs were up largely due to additional running of vehicles and machinery for extra supplements made.
Other points of interest
- Above average winter and spring pasture growth meant no PKE, silage or nitrogen were used in the early part of the season as pasture covers and growth rates were on target and sufficient to meet feed demand until Mid-November.
- Supplement made for the season was about 700 bales, (10 bale equivalents), up on budget. 200 bales of hay were sold which helped to offset the increase in costs for supplements made.
- Irrigation started 6 weeks than usual in late December and was finished by the end of March.
- 11.5 ha of Barkant turnips planted was about 60% of budget. These were planted in 3 stages, from early November about 2-3 weeks apart. Crops were planted using precision planted which reduces seed and fertiliser usage. The turnips grew well and the measured yields in January were all 11-12 t DM/ha. The turnips provided about 2 kg DM/cow from late December until Mid-March.
- The number of cows milked during the peak was 480, milked in two herds, 150 on once-a-day and 330 twice a-a-day. 472 cows were still being milked at drying off on May 24th, with the same milking frequency continued all season.
- Pasture cover as at 1/7/2021 is 2400 kg DM/ha, (above target), and cow condition is close to 5.0 with very little variation.
- 40 extra beef calves were reared than budgeted for as beef calf prices were low. 20 of these weaner beef calves were kept and will be sold next season as weaner prices were low later in the spring plus there was plenty of feed to carry them through the summer and winter. An extra 1 tonne of meal was used as there were more calves reared. Calves were weaned at 100+ kg at 8 weeks of age.
- The six week in calf rate from the 2020-21 mating was 66%.
- Nitrogen use for the season was close to budget at 40 kg N per ha for the year. Applications were lower as no N was needed in the early spring. Some N was applied to the irrigated areas in late December and the balance of N applied was in April.
- The average bulk somatic cell count of 250,000 is 14% lower than the 2019-20 season. There were fewer clinical cases of mastitis in the spring and milking the main herd twice a day for the whole season would have also contributed to the drop.
- During the spring the cows were well fed on a predominantly pasture based diet as a result of the pasture growth rates being well above average. Better weather and levels of feeding resulted in very few animal health issues, minimal lameness and reduced clinical mastitis which has contributed to animal health costs being down 23%.
- The farm is committed to using less antibiotics and drugs as the view is taken that it is essential to limit their presence in the food chain. A very proactive approach to animal health and welfare over the past few seasons has seen the use of drugs on farm significantly reduced.
- Purchase of a half share in a purpose built animal restraint system specifically for holding cows while trimming hooves has proven a good investment. The job of checking and trimming hooves is now quick and painless on man and animal and has reduced the reliance on drugs and chemicals as a first option for treatment.
- Animal breeding and herd testing costs were down significantly, (28%). The length of AB was reduced from 4 weeks to 3 weeks as submission rates were good. A last minute labour shortage meant one herd test had to be cancelled at short notice.
- The 2020-21 season will be remembered as one where pasture grown and milk price received were both well above budget.
Click the link below to view this farm's figures from previous seasons:
2019-2020 Season Review
2019-20 Numbers at a glance
Milk Production (kgMS/ha) 1,056 1,009 Milk Production (kgMS/cow) 388 372 Net Dairy Cash Income ($/kgMS) $6.90 $7.41 Total Farm Working Expenses ($/kgMS) $3.37 $3.70 Cash Operating Surplus/Deficit ($/kgMS) $3.54 $3.71 Gross Farm Revenue ($/kgMS) $6.96 $7.32 Operating Expenses ($/kgMS) $3.90 $4.39 Operating Profit ($/ha) $3,229 $2,960
*These KPI's are based on cash book actuals to 31 May 2020 and estimated non-cash adjustments. The final financial performance based on financial statements may differ.
- Operating profit for the 19-20 season based on cashbook analysis is estimated to be $2,960 per ha. This is well above the DairyNZ 19-20 estimate of $2,042 per hectare for Lower North Island owner operators and only slightly down on the budgeted profit of $3,229 per ha.
- The prolonged dry period from late January to early May meant that production gains from the first half of the season were eroded and the farm production finished 8,378 kg MS, (4.6%), below budget.
- The milk price received of $6.84 per kg MS was $0.41 above budget, so despite the lower milksolids produced, milk revenue received for the year was slightly up on budget.
- Livestock income was up on budget as 40 more weaner beef calves were sold than had been budgeted. Buyers for four day old calves pulled out at the last moment hence the higher number of calves reared.
- Farm working expenses were $33,000 up on budget and finished at $3.70 over the 181,000 kg milksolids produced. This is still over $1.00 per kg MS lower than the DairyNZ estimate for the regions owner operators of $4.64.
- The increase in costs was largely due to higher regrassing costs and more repairs and maintenance. Extra undersowing was done to repair pastures affected by drought and the irrigation system needed unbudgeted repairs.
Other points of interest
- Relatively dry weather conditions early in the season resulted in spring pasture utilisation being the best ever for this farm. No PKE, silage or nitrogen were used in the early part of the season as pasture covers and growth rates were on target and sufficient to meet feed demand until Mid-November.
- Supplement made for the season was about 200 bales, (10 bale equivalents), up on budget. The extra was all used during the summer and autumn dry period.
- More milk was taken for calf rearing with the 40 extra beef calves reared. Only 1 tonne of meal was used, (instead of the budgeted 4 tonne), as the calves were mostly reared on good quality baleage along with the milk. Calves were weaned at 100+ kg at 8 weeks of age.
- The six week in calf rate from the 2019-20 mating was 67 % which was disappointing and well down on the previous season, (80% for 2018-19).
- Irrigation started earlier than usual with a prolonged dry spell in November. Water restrictions and equipment breakdowns caused interruptions to irrigation during January.
- Pasture growth rates for February and March were lower than average and with pasture cover dropping and crops running out the whole herd was on once a day milking by mid-March and the numbers in the milking herd were being reduced each week based on body condition score, age and calving date. This meant only 370 cows were still milking at drying off in mid-May compared with 450 the previous year when most of the herd was milked until late May. Therefore cow milking days for the later part of the season were much lower than usual.
- Nitrogen use for the season was below budget at 35 kg N per ha for the year. Applications were lower as no N was needed in the early spring and then soil and weather conditions limited applications for the rest of the season. Most of the N applied was done in April and May.
Feed situation May 2020
% still milking: 77% (370 cows, 40-50 cows to go late May depending on works space).
Dry off date: 20-24 May dependent on pasture growth.
% Milking area regrassed: 23% (40ha) - 14ha new grass, not yet in rotation, 17ha undersown and 9ha in winter oats sown 1 April (1-2 weeks later than usual).
N applied this autumn to date: 30kg N/ha as sulphate of ammonia on all permanent pasture, (77% of the farm). Applied through April once rain started.
Planned N application to end of month: no more other than new grass and winter oats.
Irrigation: 55ha (30% of the farm) is irrigated. 45ha from bore - no restrictions, 15ha from river had restrictions from early January and so could only be irrigated intermittently. Put effluent water through line where possible.
Target for 31/5/2020
Target for PSC
Body Condition Score
APC kg DM/ha
Growth rates kg DM/ha/day
40 (with N)
Supplements on hand
127t DM (254kg DM/cow)
100t DM (200kg DM/cow)
20t DM (40kg DM/cow)
Actions taken to address the feed shortage
- Farm system is set up every year to factor in a dry summer, and to milk as many of the peak cow numbers as possible through to late May. Getting maximum use of the feed from the support block is key to this.
- Had a good spring so more supplements carried through from the winter and supplements made on the farm and the support block were up. Went into summer with 3kg DM per cow per day till the end of May. No topping was done, just made sure every small surplus was able to be harvested as baleage.
- Started feeding supplements intermittently from mid-December as pasture growth rates and residuals dictated – this was no different from usual.
- Turnips fed from 10 January until mid-March. Crop yield was about average – 10t DM/ha. Had 2ha more than usual due to paddock size variation so turnips lasted longer than usual.
- 38-40 day rotation length since late January.
- Balance of herd OAD from mid-March when turnips ran out (120 had been OAD since late October).
- From Mid-March about 20 cows per week were dried off. 108 now dry. 28 lightest ones getting preferential treatment. Balance on clean up duties, on long acre and unused areas.
- 11 cows culled 4 May.
Plans to achieve target APC and BCS and PSC targets
- Closely monitor pasture growth rates to ensure they are sufficient to achieve pasture cover targets by the end of May. If not then the dry off date will be brought forward.
- Continue to feed the herd at rates that will ensure BCS targets are met. There is sufficient supplement to do this. Have enough supplements to still currently offer milkers 17-18kg DM/cow/day (3kg DM baleage and 14-15kg DM of grass).
- Maintain a sufficiently long rotation length to capitalise on current good growth rates. Currently about 47 days on 140ha of permanent pasture (60 days over 180ha).
- Cull 40-50 cows late May as space allows.
Concerns and plans for the upcoming weeks
- Weather turning very cold and wet very quickly is a concern. Particularly an extreme weather event which could happen given rainfall is well below average at present. The herd would be immediately dried off if this were to happen and supplement feeding would increase.
- Pasture cover at the support block is a bit light but growth rates are good at present and it should be up to 2600-2800kg DM per ha. On the plus side the barns are full.
- Not being able to get the last of the culls away could be a problem but again there is enough supplement to manage this in the short term if need be.
2018-2019 Season Review
2018-19 Numbers at a glance
Milk Production (kgMS/ha) 1,056 1,007 Milk Production (kgMS/cow) 388 372 Net Dairy Cash Income ($/kgMS) $7.06 $6.82 Total Farm Working Expenses ($/kgMS) $3.57 $3.53 Cash Operating Surplus/Deficit ($/kgMS) $3.49 $3.29 Gross Farm Revenue ($/kgMS) $7.09 $6.88 Operating Expenses ($/kgMS) $4.00 $4.04 Operating Profit ($/ha) $3,266 $2,867
*These KPI's are based on cash book actuals to 31 May 2019 and estimated non-cash adjustments. The final financial performance based on financial statements may differ.
- Operating profit for the 18-19 season based on cashbook analysis is estimated to be $2,867 per ha. This is 12% below budget but is still over 50% higher than the DairyNZ model data for Lower North Island owner operators.
- The prolonged dry period from late January to early May meant that production gains from the first half of the season were eroded and the farm production finished 8,699 kg MS, (4.6%), below budget.
- Net dairy cash income was $104,769 below budget due to the reduced milk solids, a lower milk price received, ($6.27 per kg MS compared with $6.50 per kg MS, as a result of no Fonterra dividend being paid in the 2018-19 season), and a slight reduction in net livestock income.
- The impact of the reduced income was mitigated to some degree by close monitoring and control on costs. When it became clear that no dividend was to be paid the budget was reworked and early strategies implemented to ensure costs stayed close to the $3.50-$3.60 per kg MS level.
- Farm working expenses were $38,577 below budget, and finished at $3.53 per kg MS which was slightly below the budget of $3.57. For comparison the DairyNZ model data for farm working expenses for lower North Island Owners for 2018-19 is $4.18 per kg MS.
- As usual, there were the usual unders and overs, but the main savings in the budget came from not applying less fertiliser. The latter was in part because the soil conditions were too wet in the early spring but also for cash flow reasons.
Other points of interest
- Purchased feed costs were $24,500 below budget, (less than half of budget). The amount of PKE used was just over 50% of what had been budgeted and no hay was purchased as supplement made during the late spring and early summer were over 350 bales more, (of baleage and hay), than the budgeted numbers.
- The savings in purchased feed costs were offset by an increase in the cost of supplements made. Costs were up $15,500 as 25% more silage and hay bales were made plus the baling contractor prices had increased.
- Favourable May growth plus extra baleage and hay on hand enabled 450 cows to be milked through until May 24th. Cow condition at drying off was just under 5.0, and pasture cover was 2,100 kg DM per ha which was just on target.
- The six week in calf rate from the 2018-19 mating was 80%, (empty rate was 7.5%).
- Nitrogen use for the season was 65 kg N per ha which was 20 kg N per ha above budget.
2017-2018 Season Review
2017-18 Numbers at a glance
Milk Production (kgMS/ha) 1,041 1,000 Milk Production (kgMS/cow) 381 377 Net Dairy Cash Income ($/kgMS) $7.10 $6.86 Total Farm Working Expenses ($/kgMS) $3.51 $3.88 Cash Operating Surplus/Deficit ($/kgMS) $3.58 $2.98 Gross Farm Revenue ($/kgMS) $7.38 $7.08 Operating Expenses ($/kgMS) $4.06 $4.46 Operating Profit ($/ha) $3,456 $2,624
* These KPI's are based on cash book actuals to the 31/5/2018 and estimated non-cash adjustments. The final financial performance based on financial statements may differ
Like a lot of the North Island, the 2017 winter and early spring were very wet for this area. Production till the end of November was 6% behind last year (a below average year). Localised thunderstorms through December meant that by the year end the season was back on track to achieve the budgeted 177,000 kg MS.
The hot humid summer weather gave rise to exceptional pasture growth and maintaining pasture quality became an issue which contributed to the final season’s milksolids of 170,000, which was similar to the 2016-17 season but 3.9% below budget.
Operating profit for the 17-18 season is estimated at $2,624. This is about $800 per ha less than budget and is due in part to the lower than expected milk production. Costs were up on budget and finished at $3.88 per kg MS although about $0.30 per kg MS was related to getting the additional 37 ha integrated with the existing farm systems and infrastructure.
2016-2017 Season Review
2016-17 Numbers at a glance
Net Dairy Cash Income ($/kgMS) $5.02 $6.34 Milk Production (kgMS/ha) 1,002 Total Farm Working Expenses ($/kgMS) $2.89 $3.49 Pasture and Crop Eaten (t DM/ha) 12.6 Cash Operating Surplus/Deficit ($/kgMS) $2.13 $2.85 Imported Supplements & Dry Cow Grazing (% of total feed eaten) 7% Gross Farm Revenue ($/kgMS) $5.01 $6.38 Six Week In-Calf Rate (*A=Actual E=Estimated) 85% A* Operating Expenses ($/kgMS) $3.16 $3.85 First Calvers on Farm End of Season
(% of first calvers at start of season)
96% Operating Profit ($/ha) $1,995 $2,624 Milk Solids per Labour Unit (kgMS/FTE) 58,730
*These KPI's are based on cash book actuals to 31 May 2017 and estimated non-cash adjustments. The final financial performance based on financial statements may differ.
The increase in payout off set the lower than budgeted milksolids for the season, so total cash income was still up on budget by $161,871.
Total farm working expenses were up by $66,411, with most of the increase being additional R & M spent on staff room, housing and races and tracks.
Like a lot of the area, the dull wet weather in late September and October was challenging and milk production to the end of December was slightly behind budget. The very wet autumn meant that later season production was also impacted hence the production for the season finishing about 6% down on budget.
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