South Waikato

This high input, highly stocked farm, depends on effective feed monitoring, efficient effluent management and improving herd fertility for success.

Farm Facts

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
$/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
%
$7.30 $4.29 $4.80 $4,955 14.9 194

12

71

*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

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

Based on milk production for the year of 135000 kg MS @ $7.04 per kgMS advance and deferred payments. Includes Fonterra dividend of $0.10 per share on 129,000 shares. Milk revenue is net of DairyNZ and bio-security levies of 6.0 cents 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 It may or may not be out of date based on new information from Dairy Companies.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.

955,500 7.08 3,033 12,740
Net Dairy Livestock Sales

70 MA cows/MT heifers @800, 240 bobby calves @ $26 less the net cost of $200 per head for 6 bulls and the purchase of 34 in calf heifers @ $1,300. Cow sales are a mix of culls and surplus in calf cow prices.

17,000 0.13 54 227
Other Dairy Cash Income

Rent for surplus housing on the property.

13,000 0.10 41 173
Net Dairy Cash Income 985,500 7.30 3,129 13,140

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

This is payment to the contract milker and covers remuneration for 1.6 FTE plus some relief milking and calves reared. This also covers the contract milkers share of shed, power, farm bike and communication costs.

(incl. ACC)
177,900 1.32 565 2,372
Animal health

Covers teat spray, mastitis treatment, dry cow, teat seal,antibiotics, vaccinations , lameness, metabolic treatments and general vet costs.

16,550 0.12 53 221
Breeding and herd improvement

Heifers mated to start calving a week earlier than mature cows. AB for 5.5 weeks. Budget covers 360 insemination's @ $14 /straw and $6.00 per insemination fee. Herd test 4 times per year one milking only. Six bulls are purchased each year to use with the heifers and with the herd after AB is finished. Mating goes for 12 weeks.

11,900 0.09 38 159
Farm dairy

Contract milker pays for farm dairy costs such as rubberware and detergent. This cost is for milking machine testing and sundry items that are the owners responsibility.

1,250 0.01 4 17
Supplements made

This is pit silage made on the milking platform. The amount varies each year depending on the spring growth. The budget is for 40 t DM pit silage.

(incl. Contractors)
4,300 0.03 14 57
Supplements purchased

The budget is for 367 t PKE at $329 per t landed and approximately 330 t DM of Maize silage, at $300 per t DM landed. Also included is $10,700 for minerals which are added to the feed. Nothing has been contracted yet so actual feed costs will be subject to price variation.

230,500 1.71 732 3,073
Calf rearing

This covers 2 t of meal and $1500 for shaving.

3,000 0.02 10 40
Young and drystock grazing

Calves leave the farm December 1st as weaners and return to the farm May 1st as in calf heifers. Due to dry summers grazing costs have gone up so prices are now $10.00 per head per week for 60 calves for 22 weeks and $14.00 per head per week for 73 heifers for 52 weeks. This includes freight and all animal health including zinc and PKE fed at no extra charge.

50,000 0.37 159 667
Fertiliser

Net of fertilser rebates. 65% of the farm is irrigated with effluent. Over the whole year the effluent area gets an additional 90 kg N per ha applied 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. 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. This costs about $6,500. 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.

(incl. N)
40,780 0.30 129 544
Regrassing & cropping

No regrassing planned for the 21-22 season.

0 0.00 0 0
Weed and pest

Weeds are not a problem.

1,400 0.01 4 19
Vehicles & fuel

Vehicle costs are low as only have to pay for the maintenance and running of 1 tractor, which was replaced in 2020-21. Feed pad and stacks are near the Dairy shed so the tractor is not running very much. The contract milker supplies and pays the running costs for farm bikes.

6,700 0.05 21 89
R&M

The dairy shed, feed pad and effluent system are only six years old and other infrastructure is in good order so R & M is relatively low.

(land, buildings, plant, machinery)
14,900 0.11 47 199
Freight and general farm expenses
800 0.01 3 11
Administration

Covers accountancy, bank charges, and general office costs. This is lower than for an owner operator as the contract milker does a lot of the day to day organising so communication costs for the farm owner are low. Do own GST returns which keeps costs down.

2,650 0.02 8 35
Insurance
5,610 0.04 18 75
ACC

No owner ACC paid.

0 0.00 0 0
Rates

As per current rates demand.

11,000 0.08 35 147
Total Farm Working Expenses 579,240 4.29 1,839 7,723
Cash Operating Surplus 406,260 3.01 1,290 5,417

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 however to fully understand the efficiency of the farm business they are an important aspect.

$TOTAL $/KgMS $/COW $/HA
Value of change in Dairy livestock

Expect to have on hand 31/5/2022, 26 more R 2 heifers, 8 more MA cows and 13 fewer R 1 heifers. The expected increase in value of livestock on hand at 2020 IRD NAMV equates to $0.25 per kgMS which when added to the net cash income of $0.13 per kgMS gives a total livestock income of $0.38 per kgMS

34,390 0.25 109 459
Labour adjustment

This covers about 2 part days per month or 0.1 FTE for the year of unpaid owner input. Owner input covers governance and administration for the business.

3,000 0.02 10 40
Feed inventory adjustment

The amount of supplement taken in to the 2022 winter is likely to be about 30 t DM more than at the start of the season.

9,000 0.07 29 120
Depreciation

This is quite high as cowshed, feed pad and effluent systems are only 6 years old. It has been based on 2019-20 Financial statements plus some allowance for additional years depreciation and an upgrade of the tractor in 2020-21. No major fixed asset purchase/sales are planned for the 2021-22 season.

75,000 0.56 238 1,000
Dairy Gross Farm Revenue 1,019,890 7.55 3,238 13,599
Dairy Operating Expenses 648,240 4.80 2,058 8,643
Dairy Operating Profit 371,650 2.75 1,180 4,955

More information

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