Business type: Owner with contract milker
Location: Near Putaruru, South Waikato
Farm size: 75ha effective milking platform, no support block
Peak cows: 315 FFX
PSC: 08/07/2021 MA cows (01/07/2021 R 2 heifers)
Stocking rate: 4.2 cows/ha
Farm System: 5 (> 31% imported feed)
Production: 135,000 kgMS/year, 1,800 kgMS/ha 429kgMS/cow (129,972 kgMS average for last 4 years)
Wintering system: The herd are all wintered on the milking area
Achieving success with a high input system requires skilled labour and an ability to evaluate and negotiate feed options. A contract milker is employed and the budget has been prepared showing the payment to the contract milker as wages paid, with all costs being the owners share only. The contract milker pays for labour, shed, power, and farm bikes.
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Numbers at a glance
Financial KPI 2021-2022 budget
Physical KPI 3-year average
|Net dairy cash income
|Total farm working expenses
|Total operating expenses
|Dairy operating profit
Pasture and crop harvested
|Purchased N surplus
kg N/ha/yr *
t CO2 equiv/ha/yr *
|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
Have a very profitable business based on a high input system that is implemented to a high standard.
Minimise waste, (in any form), from the system through application of good management of the system e.g. cows, (empty & losses), feed, minerals, pasture, effluent.
Have a system that consistently delivers excellent physical and financial KPI’s irrespective of season and pay out.
Deliver very good cost control, specifically around the use of basic, lower cost, feed inputs. Manage the budget to identify the minimum requirements to generating high production.
Analyse and benchmark the system to identify opportunities for improvement i.e. high profit will come from executing the current system well rather than chasing the ultimate system.
Continue to use surplus cash to strengthen the financial position of the business.
Farm policy and infrastructure
- The farm system is set up to optimise the amount of feed grown and harvested based on best practice pasture management, running the correct stocking rate and calving date, and economic use of imported feed to maximise days-in-milk.
- Success relies on frequent monitoring of feed budgets, pasture growth rates, cow condition and feed prices to ensure optimal use of pasture grown and efficient and profitable use of imported feed.
- The 24 aside herringbone dairy shed and effluent system are 6 years old. The shed is 0.7 km from the furthest paddock.
- The farm is rolling hill country typical of the Putaruru area, with 50% of the milking area having about a 20 m difference in height from the dairy shed.
- Facilities include a feed pad and feed storage, (for silage stacks), near the dairy shed. This minimises time and costs related to feeding out and also minimises wastage associated with storage and feeding of silage.
- Races, fencing and water supply are all in good order and regularly maintained. The policy is to undertake repairs and maintenance when milk prices are favourable. To do so ensures infrastructure and resources remain in good order.
Pasture and crop eaten has increased to 14.9 t DM/ha in the past 6 years.
The policy is to fully utilise pasture first.
Utilise all nutrients from effluent to significantly reduce purchased fertiliser.
- Feed policy
Avoid using high cost inputs and focus on low cost high energy supplements and use the farm as a protein source rather than buying in expensive supplements.
In addition, minimising wastage of purchased feed is very important so a high level of attention is placed around stack and storage management, feeding out and getting the daily input levels correct.
- Supplements purchased
About 630-650 t DM of imported supplement are used. This equates to 2100-2200 kg DM per cow. Maize silage makes up about 40-50% of the imported feed and PKE the balance. The price of PKE is closely monitored so feed can be contracted when the price is lower.
- Supplements made on the milking platform
Surplus pasture is made in to silage. The amount can vary each year but is usually around 40 t DM per year.
- Young stock
Calves leave the farm December 1st as weaners and return to the farm May 1st as in calf heifers. The grazing costs include freight and all animal health costs including zinc. PKE fed will be fed at no extra charge if required.
- The farm implemented a cross breeding policy six years ago which now means the herd is 70% cross-bred and 30% Friesian. The breed change was part of a programme to target rising not in calf rates which got as high as 19%. After five years the not in calf rate is down to 11%. The target now is on achieving a less than 10% empty rate from a 12 week mating.
- The heifers are mated to start calving a week earlier than mature cows. AB is for 5.5 weeks. Herd test 4 times per year one milking only. Six bulls are purchased each year to use with the herd after AB is finished. Mating goes for 12 weeks.
- First calvers and thinner younger cows are milked once a day from late February to protect body condition.
People, health and safety
- The farm is managed with a contract milker, plus relief milker equating to 1.6 FTE. The contract milker’s remuneration covers their share of shed, power, farm bike and communication costs as well as a calf rearing allowance.
- The farm owners unpaid input is for about 2 part days per month or 0.1 FTE for the year. Owner input includes governance and administration for the business.
- Soils and Fertility
The farm soil type is a well-drained volcanic (allophanic) soil. The Olsen P levels are 30 on non-effluent areas, (35% of the farm), and 50 on the effluent area. The pH is 6.0.
- Fertiliser and nitrogen
The effluent area gets 90 kg N per ha over the whole year and the non-effluent area gets 120 kg N per ha. Fertiliser applied is urea, PhasedN and sulphur depending on the time of year and the soil conditions.
Fertiliser applications are based on soil test results and are consistent with maintaining soil fertility at economic optimum while minimising losses.
August and September fertiliser and nitrogen for the whole farm is now applied by helicopter, as is the autumn fertiliser for the non effluent area.
Contour and soil conditions in the late winter and early spring mean that a much better coverage can be achieved with the helicopter. The contour of the non effluent area is difficult to evenly spread fertiliser using land based spreaders so using a helicopter on this land gives more efficient use of fertiliser.
65% of the farm is spray irrigated with effluent.
- Soils and Fertility
2020-21 Season Review
2020-21 Numbers at a glance
Milk Production (kgMS/ha) 1,717 1,800 Milk Production (kgMS/cow) 452 458 Net Dairy Cash Income ($/kgMS) $6.57 $7.84 Total Farm Working Expenses ($/kgMS) $4.09 $3.94 Cash Operating Surplus/Deficit ($/kgMS) $2.49 $3.90 Gross Farm Revenue ($/kgMS) $6.62 $7.90 Operating Expenses ($/kgMS) $4.78 $4.58 Operating Profit ($/ha) $3,162 $5,975
*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.
- Gains made as a result of having a good winter/early spring, more cows, and a better calving spread were partially eroded in November due to very wet weather which resulted in poorer pasture quality, (lower digestibility and DM%).
- Pasture growth through summer and autumn were reasonable despite some variable rainfall patterns and higher temperatures, so supplements fed through this period were very similar to amounts that had been budgeted.
- Compared with the 2019-20 season the total supplements fed for the season of 582.6 t DM is 5% less. With production 5% up compared with the 2019-20 season, the pasture eaten for the 2020-21 season is estimated at 15.3 t DM/ha which is 3% up on the previous year.
- The milk price was $1.31/ kg MS higher than budget. The higher milk income combined with the operating expenses being very close to budget has resulted in an estimated operating profit for the season of $5,975 which is 89% up on budget.
Other points of interest
- Payments to the contract milker were up as a result of production being about 6500 kg MS higher than budget.
- Feed costs were 5% down on budget. 45 t DM less maize silage was purchased, (in part due to lower yields from the contracted area), but 24 t DM grass silage was able to be purchased instead.
- 28 t less PKE was also purchased. PKE spot prices kept rising during the season so the decision was made to not buy as much, plus autumn growth rates were better than budgeted so not as much feed was needed.
- Feed on hand at the end of the season was 19 t DM less than at the start of the season, (valued at about $6,100), which helped fill some of the shortfall in purchased feed.
- The combination of grass silage, maize silage and PKE fed through the summer is providing a better feed mix resulting in improved milk yields and lower FEI readings. As a result, this practice will be continued next season.
- Silage made on-farm was on budget at about 40 t DM.
- The herd was dried off on May 22nd which is similar to previous years. The younger cows were put on to once-a-day milking in late February, which was about 3-4 weeks earlier than previous years. Their condition score at the end of the season was much improved on previous years so this practice will be continued next season.
- Pasture cover at the end of the season was 2310 kgDM/ha and now, at the start of calving, is on target at 2400 kgDM/ha. Cow condition at calving is on target.
- No cows were lost during calving and spring so peak cow numbers milked were up 10 on budget, (4 up on last season). Wastage for the season was low with only 3 cows lost over the whole season, some of these were as a result of fast-growing cancers.
- The not-in-calf rate for 2020-21 was 11%, (based on pregnancy test results), which is the same as the previous season.
- The six-week in-calf rate was 73%. This is up on the previous season of 70% which was very pleasing. Replacement heifer calves reared were 13 more than budget which meant that weaner grazing costs were slightly up on budget.
- N applied was up on budget with 116 kg N applied across the whole farm, (budget was for 100 kg N/ha average). Less maintenance fertiliser was applied as soil tests indicated very good levels of fertility. Fertiliser costs were close to budget as savings from lower fertiliser applications were offset by using helicopters for 2 more fertiliser applications than was in the budget.
- Vehicle costs were down 40%. There were no unexpected costs for the tractor or feed wagon and diesel usage was down as was the price of per litre.