Northland

Dave and Heather Gray have been farming in the Far North for 14 years and have been part of the budget case studies programme since 2015. The addition of a 100 ha effective support block 15 km from the milking platform adds to the existing focus of ensuring efficient use of all resources in an environmentally sustainable way.

Farm Facts

Business type: Owner-operator
Location: Awanui, Northland
Farm size: 231ha effective milking platform, 34ha eff support block nearby, plus 100 eff ha owned support block 15 km away
Peak cows: 690 JFX
PSC: 20/06/2021 MA cows, 10/06/2021 R2 heifers
Stocking rate:
2.99 cows/ha
Farm System: 4 (21-30% feed imported)
Production: 282,300 kg MS/year, 1220 kg MS/ha, 424 kg MS/cow, 3 year average, (292,000kg MS budgeted)
Soil type: 2/3 clay and 1/3 sandy peat
Wintering system: 80-85% of the herd is wintered on-farm, on pasture only

The last 3 seasons in the Far North have been very challenging. Pasture grown in this period is over 2 t DM/ha lower than the three seasons prior to 2017-18.

The farm plan implemented for this business takes into account that Northland typically has highly variable growth rates and more extreme weather events than many other parts of the country.

The goal is to achieve above-average profit levels with good animal welfare and environmental outcomes, by maximising output pre-Christmas, having high pasture utilisation, and efficiently using imported supplements to fill feed deficits.

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Numbers at a glance

Financial KPI 2021-2022 budget

Physical KPI 3-year average

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% (2020-21)
$7.84 $4.59 $5.09 $3,490 11.0 140

8.0

72

*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

Click here for PDF version

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

Milk revenue for 21-22 is based advance and deferred payments on 292,000 kg MS @ $7.35 per kg MS. A Fonterra dividend of $0.08 is included in the budget. This is net of DairyNZ and Biosecurity levy (3.6 and 2.4 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 It may or may not be out of date based on new information from Dairy Companies.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.

2,153,100 7.37 3,120 9,321
Net Dairy Livestock Sales

This includes $72,000 for MA and R 2 Heifer culls, (120 @ $600 per head), $12,000 for sale of Calves (480 @$25 per head) and $30,000 sale of bulls, (20 @ $1500 per head). Have been conservative on stock prices although higher average prices for cull cows have been used as now having access to the support block they can be held and sold at higher weights and better prices.

114,000 0.39 165 494
Other Dairy Cash Income

Surplus farm houses that are rented out.

20,800 0.07 30 90
Net Dairy Cash Income 2,287,900 7.84 3,316 9,904

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

5 full time staff members, and relief labour equal to nearly 1 FTE are employed for the dairy farm, plus a farm manager for the 100 ha support block. There is $20,000 of pay rises from 2020-21 to the 2021-22 season included in the wages paid to recognise the experience and capability of the staff as well as the responsibility that they have. The farm dairy is a 40 aside (17 rows), so milker times are longer than are ideal, plus there is also the neighbouring support block that needs to be managed.

(incl. ACC)
425,000 1.46 616 1,840
Animal health

The farm has a closed herd policy to minimise animal health risks. Budget includes blanket dry cow therapy for the herd. SCC was approximately 148,000 for 2020-21 which is down on the previous season. This is still higher than desirable and there is some concern about the rate of mastitis infection mid season. Further review of mastitis control is under way with the farms' vets. Cows have lepto vaccine, standard zinc treatment. Young stock are drenched - no adult cattle drenching. No antibiotic milk is fed to calves. No bloat for the last few years. Primarily use MgCl for cows for magnesium supplementation. No BVD test on calves, just retained the milk test for BVD. Though the frm is a closed herd there has been some incursion of BVD in previous years via cross boundary contact. The entire farm boundaries will be double fenced by the end of the 2021-22 season to further protect the farm from this.

46,800 0.16 68 203
Breeding and herd improvement

Replacement rate for the herd is targeted at 22%. GeneMark is utilised to identify all replacements. 6 weeks of AI using LIC premier sires and 11 week total mating period. Jersey and Kiwicross semen is used. The costs include AB on heifers. Jersey bulls from the tail end cows are reared and used as herd bulls. Non cyclers will be put on once a day milking. First calving cows are milked twice a day for three weeks then once a day until they cycle. They are kept in a separate mob and preferentially treated. This policy has been followed for several years now. Results are pleasing with only 4% empty rate in the first calvers from 2020 compared with 9% empty rate for the whole herd.No CIDRs are used. 4 herd tests per year. Thorough pregnancy testing is undertaken and cows are grouped into mobs relating to calving date.

55,200 0.19 80 239
Farm dairy

This doesn't change much from year to year.

10,000 0.03 14 43
Electricity (farm dairy, water supply)
30,000 0.10 43 130
Supplements made

Planting 16-18% of the milking area in chicory or turnips has helped to manage pasture surpluses, but the budget does include a small amount for silage in case there is surplus pasture.

(incl. Contractors)
10,000 0.03 14 43
Supplements purchased

Budgeted on 722 tonnes of PKE and 292 t PKE/SBH/DDG mix, (or similar), @ an average price of $400 per t delivered. This is to be fed to cows and also calves primarily in the summer/autumn period when pasture growth drops below required levels. This is stored in appropriate on-farm fed storage silos and is fed through an in shed feeding system. Includes the cost of blowing the feed into the on farm hopper which is costly but ultimately reduces time and wastage. This is the average amount fed over the past 6 years but can vary widely depending on summer pasture growth so is very much an estimate. It equates to about 1 t DM per cow.

289,200 0.99 419 1,252
Calf rearing

Plan to rear 160 heifers and 30 bull calves. They are reared on colostrum, whey powder, meal and pasture and are weaned at 75 kg.

49,300 0.17 71 213
Winter grazing

120 late calving cows will be wintered on the 34 ha (28 eff ha) support block leased that is adjacent to the milking area.

0 0.00 0 0
Support block lease

Lease is for 34 ha (28.5 eff ha) adjacent to the milking area which is used for all R 1 heifer grazing and wintering 120 late calving cows.

18,400 0.06 27 80
Fertiliser

DAP Potash sulphur and Se applied as per Nutrient budget recommendations. Have allowed $60,000 for nitrogen, would like to keep N applied to 120-150 kg N per ha across both the dairy farm and the support block. This will depend on the weather and grass growth. N applied is usually as SustaiN. This budget includes $10,000 for lime. Costs are net of Fertiliser rebates..

(incl. N)
105,800 0.36 153 458
Regrassing & cropping

For the 21-22 season the plan is to plant 30-35 ha of chicory plus about 7 ha of turnips, (16-18% of the milking area). This helps manage kikuyu and spring pasture surpluses. The cost for cropping is budgeted at $20,000. The balance of this cost covers regrassing of the crop paddocks with tetraploid ryegrass plus the seed as well as oversowing costs for 50 ha of mulched kikuyu. Black beetle damage was severe autumn 21 and is anticipated to be bad again 2022 so extra undersowing has been budgeted for.

75,500 0.26 109 327
Weed and pest

Includes control of wild cats, possums, stoats etc on the support block.

4,000 0.01 6 17
Vehicles & fuel

The farm has 4 tractors - well maintained but not new. Includes about $16,000 for fuel.

49,500 0.17 72 214
R&M

Plan to continue with improvements to infrastructure while cash flow is good. Includes $22,000 for plant and machinery, $10,000 for tracks, $5,000 for drains and about $20,000 for staff accommodation improvements.

(land, buildings, plant, machinery)
89,200 0.31 129 386
Freight and general farm expenses

Includes $1,200 for protective clothing and $10,000 for freight. Freight is up on previous years as there is now transport of animals to and from the new support block.

12,000 0.04 17 52
Administration

Do own GST and Payroll. This cost includes about $5,000 for consultancy as the owners are reducing their input into farm and business management. The unpaid labour adjustment has been reduced to reflect this.

9,600 0.03 14 42
Insurance

Based on 21-22 invoice.

4,300 0.01 6 19
ACC
9,000 0.03 13 39
Rates

As per rates notice.

48,000 0.16 70 208
Total Farm Working Expenses 1,340,800 4.59 1,943 5,804
Cash Operating Surplus 947,100 3.24 1,373 4,100

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.

Non-cash adjustments $TOTAL $/KgMS $/COW $/HA
Value of change in Dairy livestock

This is based on 14 less R 2 heifers, and 14 more MA cows using 2020 NAMV.

4,200 0.01 6 18
Labour adjustment

Owner has reduced time involved in the farm. No longer hands on, time on the farm is fortnightly staff meetings, business administration, GST and payroll. Equates to about .13 FTE.

10,000 0.03 14 43
Feed inventory adjustment

Do not intend to carry any supplements forward. Don't usually have any feed on hand at the end of each season.

0 0.00 0 0
Depreciation

Based on 2019-20 financial statements, and allowing for two additional years depreciation plus asset additions, including purchase of 100 eff ha support block.

85,000 0.29 123 368
Dairy Gross Farm Revenue 2,292,100 7.85 3,322 9,923
Dairy Operating Expenses 1,435,800 4.92 2,081 6,216
Dairy Operating Profit 856,300 2.93 1,241 3,707

More information

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