Business type: 50:50 sharemilker
Location: Kaihere, Western edge of Hauraki Plains
Farm size: 96ha effective milking platform
Peak cows: 300 F
Stocking rate: 3.13
Production: 130,000kg MS budgeted, (433 kgMS/cow, 1354 kgMS/ha)
Farm System: 2 (1-10% feed imported)
Soil type: 1/3 Peat, 1/3 silt loam and 1/3 clay
Wintering system: Cows wintered on the dairy area
This season the farm policy is changing to a farm production system 2, (1-10% imported feed), where the imported feed is maize silage from the farms support block. The aim is to be more insular with supplementary feed and not be reliant on palm kernel based feeds. The high price and the public perception that it is an undesirable product have influenced the decision to make this change.
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Numbers at a glance
Financial KPI 2021-2022 budget
Physical KPI Estimated for 2021-2022
|Net dairy cash income
|Total farm working expenses
|Total operating expenses
|Dairy operating profit
Pasture and crop harvested
|N applied to milking platform
|Total feed eaten per ha
|Six week in-calf rate
Strategy and financial
- Focus on having lower operating costs and above average production for the type and size of farm.
- Attention to detail to minimise wastage with supplementary feeding and in all other aspects of the business.
- Do all our own financial management, budgets, and GST. Update budgets every 2 month, (at GST time), with actual costs so that we always know our financial position.
- Budgets always include a reasonable allocation for drawings, debt servicing and repayment, capital transactions, and tax liability. Any surplus after that is added to savings.
- Share ideas and information via discussion group and peer interaction, and look for opportunities to grow the business.
Farm policy and infrastructure
- The farm is well maintained with good internal infrastructure.
- Planned start of calving is 10th July. The Dairy Shed is a 33 aside herringbone
- The uncovered feed pad can feed up to 300 cows at once.
- The herd is split in to 2 equal sized mobs of 150 cows
- Maize silage is fed all year round. This is made up of 150-180 t DM from the support block, (the price is set at 50% share of the market rate per kg DM), and 180-200 t DM grown on the milking platform, (sharemilkers pay 50% of the costs).
- Regular feed budgeting is carried out along with use of the spring rotation planner. Re-assess pasture cover every 10 days, (using plate meter) and update feed budget with this data.
- Late spring/early summer constantly monitor post grazing residuals to ensure action is taken early, (dropping out paddocks for silage), to maintain pasture quality and optimise pasture utilisation.
- Total labour on the farm is 2.3 FTE plus some casual labour.
- The dairy farm is supported by nearby land that provides grazing for young stock and the maize silage. Grazing costs are at market rates that are rebated to recompense the sharemilker for doing all the stock work.
- Feed budgets, cow condition and calving dates are used to manage late summer/autumn culling and drying off decisions. Cows will be at condition score 5 and R 2 and R 3 heifers at condition score 5.5 by the end of May.
- Young stock go to the support block soon after weaning and stay there until they return as in-calf heifers mid to late May.
- Pasture management
Focus on the balance between pasture utilisation, avoiding pasture damage and maintaining good cow intakes and performance. This is achieved with frequent pasture cover and growth rate assessments (particularly at times of rapid growth rate change) and using on off grazing in wet conditions.
The spring rotation planner is followed to ensure pasture covers are managed effectively during the early part of the season, and pasture damage is minimised though on-off grazing or reducing the short term grazing pressure.
- Supplements imported
About 580 kg DM per cow is imported as maize silage (33%) and will be feed for most of the season. Levels of supplementation depend on post grazing residuals and are adjusted to ensure cow intakes don't fluctuate too widely.
Supplements are fed on a feed pad adjacent to the dairy shed.
- Supplements made on the milking platform
Surplus pasture is harvested as silage. About 50 t DM is expected to be made.
8 - 10 ha of maize is grown on the milking area each year. The sharemilker pays 50% of all costs related to growing and harvesting.
A further 6 ha is grown on the support block and brought back to the milking area. The cost to the sharemilker is $330/t DM.
10 ha of chicory will be grown to shift more feed into the summer. This should reduce the amount of silage needing to be made in the spring and it is a better quality feed than silage for use by milking cows.
- Pasture management
- Maintaining a closed herd for bio-security reasons helps to shape the breeding and herd improvement decisions.
- A small breeding herd of Hereford cows is maintained to breed bulls to be used with the heifers and with the herd once AB is finished.
- Mating is for 10 1/2 weeks with 5 1/2 weeks of AB followed by 5 weeks with bulls. Bulls are rotated every 2-3 days.
- The replacement rate is 23%, (about 70 heifer calves).
People, health and safety
- The farm employs one full time 2 IC staff member as well as some casual relief milkers.
- The business owners unpaid input equates to 1.3 FTE and includes all strategy, operational planning and administration work.
- Effort is made to ensure that an enjoyable working environment exists.
- Rosters are planned to ensure both staff and the business owners take time off regularly.
- Best practice
Care is taken to ensure livestock and pasture management and the use of feed and fertiliser follow recommended environmental best practice for the soil types.
Nitrogen fertiliser is strategically applied as urea during times of active pasture growth in spring and autumn. N is applied in the form of urea at application rates of about 25 kg N/ha. The number of applications per year is usually 4 so total N applied to the milking area is usually about 100 kg N/ha.
- Farm environment plan
The farm has completed a farm environment plan within the last 2 years and this is used to shape the farm owners on farm decisions.
Effluent block is 70% of the milking area.
The effluent system is new and has storage for 90-120 days. Irrigation on to pasture is only carried out when weather and soil conditions are perfect.
- Riparian planting
Riparian planting is on-going. In addition all paddocks have well established shade trees.
- Best practice
2020-21 Season Review
2020-21 Numbers at a glance
Milk Production (kgMS/ha) 1,354 1,212 Milk Production (kgMS/cow) 394 334 Net Dairy Cash Income ($/kgMS) $3.23 $4.31 Total Farm Working Expenses ($/kgMS) $1.99 $2.73 Cash Operating Surplus/Deficit ($/kgMS) $1.24 $1.58 Gross Farm Revenue ($/kgMS) $3.73 $3.87 Operating Expenses ($/kgMS) $2.77 $3.33 Operating Profit ($/ha) $1,294 $651
*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 was the first year of sharemilking on a new farm with a larger herd size and employing full time staff. The season has been a difficult one with unplanned staff changes and low pasture growth from late December to early May having a big impact.
- Price increases and the limited availability of supplementary feed led to a review of the farm production system for the 2021-22 season. Going forward the farm policy is to be self-sufficient for feed to eliminate the reliance of imported feed, particularly PKE, as the use of this feed is viewed negatively by the general public.
- Production for the season was 10% down on budget, however the milk price was 10% up so the net milk sales for the season was very close to budget.
- Net stock sales were more than triple the budget due to a combination of having more culls and delaying the purchase of additional R 2 heifers. The higher cull numbers are a result of a higher empty rate and a decision to reduce stocking rate as part of the changing farm system.
- Total farm working expenses were up 23% largely due to higher wages, purchased feed and vehicle costs.
- Operating profit for the season is $651 per ha which is half of that budgeted. Operating expenses of $3.33/kgMS are 20% higher than budgeted and well above the $2.65 budgeted for the coming season.
- A lot has been learned from this season and changes have been implemented for the 2021-22 season to improve outcomes and achieve budgeted targets.
Other points of interest
- More maize was grown on support block, 10 ha rather than the usual 6 ha to provide more supplement for the 2021-22 season to replace PKE based purchased feed. Yields were 20 t DM per ha so 200 t DM was brought back to the milking platform compared with the 120 t DM that had been budgeted.
- The 8 ha of maize grown on the dairy Platform yielded 232 t DM which equates to 29 t DM per ha. This is well up on expected yields.
- 400 t DM Maize was on hand 31/5/2021 to use for 2021-22. This is 180 t DM more than had been budgeted so the resulting feed inventory adjustment has offset the increase in feed costs.
- Pasture ME was lower than average through October and November so even though cows appeared fully fed they did not perform and reproductive performance for the season has been below expectation. The empty rate was 18%. This impacted revenue as culls were sold as empty rather than higher value in calf animals.
- Cow numbers milked early in the season were as higher than budget as the owner had been unable to sell surplus cows so they remained on farm till November. This meant 28 t more imported PKE/Blend was fed than had been budgeted.
- Target pasture covers from late December through to early May were seldom achieved, with very little rainfall and hot windy conditions contributing to low pasture growth through the summer and autumn.
- All supplements that were on hand at the start of the season, (230 t DM), plus most of the small amount of silage made in the spring was fed out by mid-March.
- The herd was dried off late March/early April. From mid-April about 30 t DM of the new seasons maize silage was fed to build cover and cow condition.
- Pasture cover of 2200 at the end of May 2021 was 350 kgDM/ha higher than the previous season, so the farm is in a better position than last season.
- Nitrogen use for the season was below the 100 kgN/ha budgeted as only 3 applications were made. The dry autumn meant less N was applied.
- Some animal health costs were up for the season. With the move to a new farm and soil types, the mineral requirements for stock was not fully considered so mineral use was up on budget.
- Coccidiosis in the calves added an extra $2,000 to calf rearing costs.
- Wages costs were up as staff left early in the spring at short notice so contract staff were employed till new staff were employed. Extra relief staff were also employed over summer to reduce workload for all and ensure plenty of time off could be taken.
- Vehicle costs were triple the budget as the engine blew up on the payloader which cost $15,000 to repair. Vehicles were also under estimated costs as this was the first year on a larger farm with more vehicles and more tractor work for cropping and feeding out so budget was very much a guess.