Farm Facts
Business type: Owner-operator
Location: Culverden, North Canterbury
Farm size: 141ha effective milking platform, 195ha effective owned dry land support block near Rangiora
Land: 100% pivot irrigation, part of Amuri irrigation scheme
Peak cows: 540 friesian cross
PSC: 3/08/2021
Stocking rate: 3.8 cows/ha
Farm system: 4 (20-30% feed imported)
Production: 264,460kg MS/year, 1876kg MS/ha, 490kg MS/cow (4 year average)
Attention to detail and keeping things simple are key to the success of this business. Frequently monitoring and updating the budget and the farm plan are critical so there are no surprises and any actions can be taken early.
The approach to budgeting is to be conservative with estimates for production and generous with expenses so in the event of a milk price challenge or severe weather event there is wriggle room. The breakeven milk price for this farm is $5.10 per kg MS on 255,000 kg MS. At this price, there is no need to make compromises. Status quo farm working expenses are in the range of $3.90 - $4.10 per kg MS.
Scroll down to get into the latest budget!
Numbers at a glance |
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Financial KPI 2021-2022 budget |
Physical KPI 2-year average |
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| Net dairy cash income $/kgMS |
Total farm working expenses $/kgMS |
Total operating expenses $/kgMS |
Dairy operating profit $/ha |
Pasture and crop harvested |
Purchased N surplus kg N/ha/yr* |
Methane emissions t CO2 equiv /ha/yr* |
Six week in-calf rate % |
| $8.43 | $4.40 | $4.31 | $5,719 | 17.7 | 137 |
12.2 |
68 |
*Find out more about these KPI's and how to calculate them for your own farm here.
Management decisions
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Strategy and financial
- Know the business well
Always have the farm information up to date so that time spent with rural professionals (like accountants), can be spent looking forward and planning. The key is to be proactive and in a position to make informed decisions quickly. - Review budget regularly
Review and update budget every month when cash manager is updated. We try and work on a no-surprises type of budget, and then if there is a surprise, it will be that we do better than budgeted, particularly with the costs. - Budget updates
Keeping the budget up to date is important from a tax calculation point of view, as tax payments can be more closely aligned to the year’s actual performance rather than the previous year which fits better with cash flow. This is particularly important as the stage of business development for this business means tax liabilities have a significant impact on cash flow. - Debt
Repayment of debt has always been a priority, which makes life a lot easier when downturns occur. - Detail
Attention to detail, both on farm and financially is very important. - System
The farm has a simple system that is easy to implement. - Communication
Networking and talking with peers and like-minded farmers as well as rural professionals is key to successfully progressing the business. Be open minded and always look for ways to improve. Mentor others. - Environment
Be mindful of our environmental responsibilities and always try to do better.
- Know the business well
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Farm policy and infrastructure
- The dairy shed is a 40-a-side herringbone shed.
- It is 0.7km from the farm dairy shed to the furthest paddock.
- The farm is well subdivided, with good internal laneways and water supply that exceed minimum standards. Planned start of calving is 1 August.
- All 584 cows are wintered on the support block, so no external grazing is required. The cows are wintered on fodder beet, kale, silage and hay.
- Pasture management and feed budgeting are given priority. Farm cover is measured and feed budgets updated weekly for 9 months of the year.
- The policy for grazing is 'pasture first' and post grazing residuals are monitored closely. Supplement is only added if they are dropping below 1500 kg DM/ha.
- Improving efficiency of supplement use is ongoing with the aim to minimise wastage from harvest through to storage and feeding out.
- A 195 effective hectare dry land block 1 hour from the Dairy Farm was purchased in October 2020. This provides grazing for all young stock, wintering for the herd and about 50% of the imported feed for the milking area.
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Feed
- Support block
On the support block, 25ha is planted in fodder beet for winter feed. This area is then planted in oats for cereal silage. This will be harvested in bales in late spring/early summer. After harvest, the area is re-sown with permanent pasture. 20 ha of new ground on the support block is sown with forage rape in the spring for summer feed. About 510 t DM of baleage, (pasture and cereal), will be made in the late spring and early summer. 210 T DM of this will be transferred to the miking platform and, depending on relative prices, about 200 t DM will either be sold, (and funds used to buy PKE for the dairy herd), or it will also go to the milking platform. The remainder will stay on the support block for use there. - Milking platform
3-4ha of fodder beet are sown in November on the milking platform. This is to provide a bulk of autumn feed for the milking herd, for milking and weight gain. It also means the herd can be transitioned to eating fodder beet well in advance of going to the support block. When they leave the milking area they are already eating 5kg DM of fodder beet, so it only takes about 10-14 days to get them to 9-10kg DM (70% of total intake). The success of this does depend on getting good yields, (30 t DM per ha), which makes the cost per kg DM lower than other feed options. 13-14 ha on the support block and 2-3 ha on the milking area are re-grassed each year after cropping.
Supplements made on the milking platform vary depending on pasture growth rates. About 40-60 t DM of baleage is made on average. - Supplements
Supplements used are pasture and cereal baleage, hay and PKE. The amount of imported supplements fed depends on pasture growth with feed budgets based on 410 t DM, (750 kg DM/cow). Pasture silage and PKE are fed on the milking platform and the cereal silage and hay is for winter cow feed on the support block. - Policy
Farm policy is to always have a reserve of 100 t DM of supplement (silage/hay) on hand, over and above the annual requirements for supplement. This is insurance for severe weather events like heavy snowfall, or for when irrigation restrictions are enforced.
- Support block
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Herd
- The herd has been sire proving scheme, (SPS), for over 30 years so herd testing and semen costs are discounted. AB is for 6 weeks with SPS bulls, followed by 1 week short gestation Hereford semen, (as a marker,) then 3 weeks AB using short gestation Kiwi cross semen
- Heifers are mated with own bulls which reduces the risk of exposing the farm to outside animal health risks.
- Young stock liveweights are monitored, and industry recommended liveweight targets have always been exceeded.
- Achieving recommended cow condition and pasture cover targets for the farm at key times are critical, and decisions for culling and drying off are based on feed budgets, cow condition scores and calving dates. Protrack was installed late 2017-18 so that better information is available to assist with this decision making.
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People, health and safety
- Three full time staff and some part time and relief staff are employed. This enables the farm owners to reduce their time involved with the day to day running of the farm.
One of the full time staff is shared between the milking platform and the support block in Rangiora. - The farm owners now live off-farm and their input is 0.4 FTE. Their is largely in governance and administration roles only, plus overseeing any R & M on the support block near Rangiora.
- Good communication with staff is vital to the success of the business and to ensure low staff turn over.
- Key staff have been with the farm for fourteen years which is reflected in the above average level of remuneration paid to staff.
- Manuals with processes that meet OSH industry standards are on farm and implemented.
- Three full time staff and some part time and relief staff are employed. This enables the farm owners to reduce their time involved with the day to day running of the farm.
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Environment
- Best practice
A proactive approach is taken to identifying and implementing environmental best practices that are applicable for this farm. An example of this is the farm currently being part of a study for the Amuri Irrigation Scheme, looking at the impact of wintering. - Irrigation
The farm irrigation system has soil moisture sensors which drives the irrigating decisions. The focus is on efficient water use. Soil moisture is monitored frequently and irrigation is based on this. Effort is made to ensure irrigators are well maintained and operating to optimum efficiency. - Nitrogen
Nitrogen use is below 190 units of N per hectare. The plan for 2021-22 season is to review timing, application rates and sources of N so that the farm continues to stay within the 190 kg per ha cap for synthetic N that is part of the latest National Policy Statement for Freshwater Management. - Farm environment plan
The farm belongs to the Amuri Irrigation Scheme. One of the requirements is to have a Farm environment plan, which is audited every 2 years. This gives focus to what needs to take priority and helps when developing the budget each year. - Runoff
Buffer strips are used on all cropped areas to minimise runoff. Crops and pasture are direct drilled where possible and fertiliser applied with the seed. - Wintering practices
Some sites on the support block have been identified as being more vulnerable to wintering practices. These areas will not be cropped and any re-grassing will be grass to grass. This does limit the subsequent pasture yields compared with a cropping regime, but environmental best practice is deemed to be a priority in this instance. - Soil testing
Since 2012 the policy has been to soil test every paddock. The farm now has a good library of data on the fertility of each paddock, and fertiliser applications are tailored to be paddock specific. - Effluent
Effluent is spread via pivot irrigators and can be applied to over 90% of the milking effective milking area. The farm has 26 days of pond storage.
- Best practice
Season review
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Mid season update: 3 March 2022
Eight months into the season this farm has provided an update on how they are tracking, what, if any major challenges to their budgets they are facing and plans for managing any variances for the rest of the season.
Season to date
Production to January 31st is 93,248 kg MS which is 4,980 kg MS, (2.5%), down on last season. It is still ahead of budget as the budgeted milksolids was 4.25% lower than the 20220-21 actuals.
Peak cows milked was 540 and as at December 1st 535 cows were milking. This is similar to budget and slightly less than previous years.
Pasture production has been below average for much of the first half of the season resulting in milk production being behind last season every month except September and November. Spring pasture growth started to accelerate in September as expected, but cold, wet weather late September/early October resulted in a deficit of pasture, so more supplement was fed than planned through this month.
This season, for the first time ever, by October 20th the reserve of supplements on hand from the start of the season was down to only 10 t DM, (across both the milking platform and the support block). Last season there was still 195 t DM on hand by mid-October.
Supplements fed so far this season, to all classes of stock, (and includes wintering), equates to about 1,100 kg DM per cow, including 10 t PKE from inventory and 153 t PKE purchased. This is up on last season’s total for the same period of 715 kg DM and 25t PKE.
Further wet weather in December impacted the ability to harvest supplement on time so pasture quality was affected which has also contributed to lower milk production season to date.
This was followed by the wettest February in memory. Production for February was 1% down on last season as result of not only the wet but also unseasonably cold weather.
The new dryland support block is near Loburn, has benefited from the wet summer but did suffer significant damage to fences from flooding events in May and July. This has added about $30,000 to R & M costs.
No supplements have been harvested on the milking platform this season but all the farms budgeted baleage and silage requirements have been met from the support block plus 100 t DM has been sold which will offset some of the harvesting costs. Sixty percent of the supplement harvested has been transported to the milking platform.
Looking forward
Daily milk production as at March 3rd is 1% behind last season on a daily basis. The herd is currently producing 1.7 kg MS/cow/day from 529 cows, milked twice a day. Numbers currently milking are 2% down on last year. Cow condition is lighter than usual, a reflection of the difficult season.
The herd is being offered 18 kg DM/cow/day, made up of pasture, baleage and PKE. The quantity of supplements fed has been increasing in the last week as the grazing rotation is increased from 25 days out to 35 days, and is probably about 2-3 kg DM/cow/day of baleage and 1-2 kg DM of PKE leaving with about 13-15 kg DM of pasture making up the balance of feed intakes.
Pasture growth rates for February were 60 kg DM/ha/day average but were highly variable, ranging between 40 and 90. Pasture cover is 2500kg DM/ha so at current growth rates and levels of supplementation pasture cover is increasing slightly.
The current levels of supplements on hand on the milking platform are 350 t DM of baleage, 60 t DM, (3.5 ha) of fodder beet plus 54 t DM PKE still in the budget. About two thirds of this is available for use to the end of May 2022, with the balance available for next season. This equates to about 590 kgDM/cow and should more than adequately meet the requirements of the feed budget to take the farm from now till the end of May. The feed budget is based on 350-400 kg DM/cow for the autumn.
Pasture and crop growth on the new support block has been good over the summer. There were 20 ha of brassica for summer use which will be finished grazing and ready for re-grassing in mid to late March. 25 ha of fodder beet was planted for the 2022 wintering. There is currently 220 t DM of baleage on hand on the support block, with 137 t available for use through the autumn and winter. This leaves the surplus of 97 t DM to be kept as a contingency against severe weather events such as heavy snow.
The current feed budget based on average growth rates supports the plan to continue to milk the majority of the herd through to the end of May.
Milk revenue for the season is now forecast to be 16% up on budget, largely a result of increases milk price, with the current forecast milk price of $7.20 for April paid in May being $0.80 $/kgMS higher than the budget. Stock revenue is still on budget.
Farm working expenses are forecast to be up about $1.00 per kg MS. About a third of this is additional repairs and maintenance, much of this is discretionary as there is extra cash flow. Another third is increases in fertiliser spending, (much of which is due to price increases for nitrogen. Feed costs, (including winter grazing freight, cropping and pasture renovation) are likely to be up about $0.11 per kg MS.
The revised budget is still showing a forecast operating profit of $5,500 - $6,000 per ha on 260,000 kg MS, as increased costs are still likely to be less than the increase in milk income.
Plans to manage risks
With the wetter and colder February this year, the chance of a cooler autumn may be higher. This could slow autumn growth and affect the amount of supplements needed in the latter stages of the season.
Feed budgets are revised frequently and will be used to manage the next three months, to ensure pasture cover, cow condition and feed on hand targets are met for the end of the season and for the planned start of calving.
With the forecast milk price approaching $10.00 per kg MS it is important this year to not be mesmerised by the very high payout. Care must be taken not to chase production to the detriment of next season.
The budget is a “living” document and is constantly under review, as is the short and long range feed budgets for the farm. Decisions will be made taking into account the impact on animals, staff and the environment as well as the short and long term economic effects.
Feed and Pasture
- 140 t DM more supplement has been transported to the milking platform so freight will be up.
- Planted 25 ha of fodder beet in October on the support block for winter feed in 2022. Yields are on track to exceed 25 t DM/ha and look better than the milking platform.
- 20 ha of brassica was planted for summer feed on the support block. This was a mix of 2/3 rape and 1/3 raphno. Yields were 8.2 t DM/ha and 9.4 t DM/ha respectively. The high yields have made it a challenge to get this crop fed off in time to regrass by March 20th.
- 3.5 ha of Fodder beet on the milking area for autumn use is as per budget. Grazing of this will start on April 25th to transition cows before going to the support block crops.
- All cropping has been done using full cultivation as fodder beet yields best under that regime, plus all cropping on the support block is part of a complete pasture renovations process which is best suited to cultivation.
- The budget included allocation for 210 t DM PKE. At this stage that is all that will be used.
- N use to 31-1-2022 is 125 kgN/ha on the milking platform, starting late August and finishing in late November. To keep N use under 190 kg N/ha, summer applications have been cut out, although with the cold wet February, pasture cover and growth rates indicated that N was needed so the autumn application was brought forward. Less will be applied in April and May as a result.
Calving and reproduction
- Calving rate after 3 weeks is 68%, 6 weeks is 91% and 9 weeks is 99%. The 3 week calving rate is down on last season, (71%).
- Three week submission rate, (SR), is 91%, which is up on last season, (89%).
- The 6 week in calf rate is 69% which is similar to last year, (70%).
- The empty rate this season is 17%. For comparison, Lincoln dairy unit was 21%. Higher empty rates seem common in Canterbury this year.
- 169 heifer replacements, 13 beef calves were reared. This is up on the budget of 152 replacements, however calf rearing costs are similar to budget.
- Had to purchase 2 replacement bulls this year to due to animal health issues in 2 of the bulls on hand.
- 40 carryovers from last season are on the support block. There were 10% empties in this mob of cows.
Other points of interest
- The herd peaked at 2.2 kgMS/cow/day which is higher than last season, (1.89). The peak this season was late October which was about 2 weeks later than the previous year.
- $0.10/kgMS has been spent on the lanes and races on the dairy farm, including reforming and capping the races to ensure they will stay in good order for some time to come.
- More P, K and S is also being applied to the support block as the cash is available and the extra fertility is needed.
- More phosphate than budgeted is being applied to the dairy farm this autumn to ensure phosphate levels remain at the high end of recommendations.
- If the autumn goes well and the support block has sufficient feed, there might be the potential to carry some culls over until the cull price looks better.
- Irrigation days for December and February were very low.
- Both the dairy farm and the support block have plenty of shade trees so minimal planting is needed in future.
