Southland

This 1020 cow, 50-50 sharemilking business is located near Winton, Southland.  Milksolids for 2018-19 is budgeted to be 510,000 kg MS from 290 ha (1,759 kg MS per ha and 500 kg MS per cow).  The farm is supported by 199 ha near by, which includes 50 ha of precision planted swedes and 18 ha of whole crop barley.

A focus on efficient feed usage, good cost control and maximising livestock profit allows this high input sharemilking business to be consistently in the region's top 25% for operating profit. Budgeted Operating profit for the 2018-19 season is close to $2,000 per ha.

2018/19 Numbers at a glance

Total KgMS Cows Milked Hectares (effective)

Net Dairy Cash Income
($/kgMS)

Total Farm Working Expenses
($/
KgMS)

Total Operating Expenses ($/kgMS) Dairy Operating Profit
($/ha)
510,000 1020 290 $3.24 $1.78 $2.07 $2,059

2018/19 Forecast Budget

Click here for PDF version

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

Based on the Fonterra milk income calculator. Equates to $2.75 per kg MS advance/deferred milk price for 510,000 kgMS. Milk revenue is net of DairyNZ levy of 3.6 c per kgMS, (50% share).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 It may or may not be out of date based on new information from dairy companies.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.

1,393,320 2.73 1,366 4,805
Net Dairy Livestock Sales

Net Livestock revenue equates to about $0.40 per kgMS. Made up of 20 R 2 heifers @ $700 per head, 240 MA cows @ $700 per head, 500 bobbies @ $40 per head, 80 bull calves @ $100 per head plus 18 R 3 bulls sold for 1,300, less 18 R 2 bulls purchased for $1,600.

204,600 0.40 201 706
Other Dairy Cash Income

Made up of sundry income of $3,650 and $50,000 grazing revenue. The swede crop for the 18-19 winter is exceptional and there is surplus to requirements so some external grazing will be taken in.

53,650 0.11 53 185
Net Dairy Cash Income 1,651,570 3.24 1,619 5,695

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

Have one 2 IC, one herd manager and two farm staff plus a calf rearer during the spring. Each has their own area of responsibility but are trained to be able to cover for each other. Above average remunerations recognise the the additional skill levels and responsibilities of the staff in being able to do this. There is a team approach to managing staff work load.

(incl. ACC)
250,000 0.49 245 862
Animal health

Costs cover; minerals, vaccinations, drenches for calves, and vet call outs. Mastitis control includes Blanket dry cow of the whole herd plus teat seal for the heifers. Average SCC is below 90,000. Two pregnancy tests are done each year – an early one to get dates and empties, and one late scan to pick up any omissions. Laminitis and lameness can be a problem, treatment includes rest, once a day milking and if needed a block for the affected foot.

64,100 0.13 63 221
Breeding and herd improvement

Six weeks of AB followed by three weeks with bulls - run 4 teams of 7-8 bulls with one team resting, one with the lame cows and one with each of the milking herds (cost of bulls is netted off stock sales). Buy 18 2 year old bulls each year, take them through two mating seasons and sell them as 3 year olds. Herd test twice a year (standard testing – pm/am milkings). Cost includes MINDA and ear tags. Empty rate for 17-18 was 10.5%.

39,500 0.08 39 136
Farm dairy

Have 60 bail rotary – rubber ware is changed once a year. Standard detergent and cleaning regimes used. An automatic washing system is installed so have electronic measuring of detergents which reduces wastage.

10,130 0.02 10 35
Electricity

The shed is operating 7-8 hours per day, (including wash up time), which increases costs. Do have heat recovery systems for hot water cylinder from both vats which helps. Two hot washes per day are used.

(farm dairy, water supply)
31,450 0.06 31 108
Supplements made

This includes 100% share of costs related to making supplements and cropping. Do own mowing and tedding. Make about 220 t DM silage/baleage on milking area plus 270 t DM silage/baleage on nearby 27 ha support block and 150 t DM of whole crop barley silage/baleage on additional 18 ha (8.3 t DM/ha yield). 50 ha of precision planted swedes will be grown (the precision planting has given yields of 14-15 t DM/ha, and the direct costs for all cultivation, planting and weed control work are included apart from vehicle running costs and depreciation. Some outside contracting is budgeted for, although much of the work is done by the sharemilker. This feed is all for wintering, an additional 400t DM of baleage is made on the new support block for wintering for cow/calves/heifers.  

(incl. Contractors)
215,000 0.42 211 741
Supplements purchased

Approximately 540 t DM of imported feed (486 kgDM per cow) - 40 t DM Molasses and 166 t DM Barley, 166 t DM of DDG and 166 t DM of PKE which will be fed as a three way mix.

95,000 0.19 93 328
Calf rearing

Calf meal and straw. Use a high proportion of meal to milk as usually have relatively low quantities of discarded milk. About 275 calves will be reared.

27,400 0.05 27 94
Young and drystock grazing

Young stock now grazed on 180 ha adjacent support block. In lieu of grazing fees to the owner the agreement is that the sharemilker pays for all supplements made on the support block, 50% N, all fertiliser application,and all contracting costs related to weed & pest and R &M for hedges and drains and provides the labour to run the support block.

0 0.00 0 0
Winter grazing

There are no external winter grazing costs for 2018-19 season as all cows will now be wintered on the new support block, (purchased late 2016).

0 0.00 0 0
Fertiliser

Apply own fertiliser. Fertiliser mix has N (sulphate of ammonia) added - this is applied behind cows every round during the season (25 day round) at 25 kg N per ha, (about 8 applications, equates ot about 200 kg N per ha). The Fertiliser costs covers all N applied to the support block as well.

(incl. N)
41,500 0.08 41 143
Regrassing & cropping

Cultivation and sowing costs for re-grassing the 68 ha of crop areas.

7,300 0.01 7 25
Weed and pest

This is for the control of thistles, pasture weeds, and dock, plus some gorse spot spraying. Again this is for all land farmed including the support block.

5,000 0.01 5 17
Vehicles & fuel

Fuel and R & M for 3 Tractors, 5 bikes (4 two wheelers and 1 quad), Suzuki jeep, calf rearer ute and a general farm ute. The farm policy is to check vehicle oil daily, carry out regular services and twice a year give vehicles a thorough clean. This is quite high as most of the cropping and silage harvesting is done by the sharemilker.

60,500 0.12 59 209
R&M

Plant R & M, hedges, drains and tracks - scraping the lane edges.

(land, buildings, plant, machinery)
33,030 0.06 32 114
Freight and general farm expenses

Protective clothing is $2000, balance is trucking costs.

11,030 0.02 11 38
Administration

Covers accountancy, computer, farm consultant, phone and general office costs. Farmer does own GST, PAYE, budgeting.

9,300 0.02 9 32
Insurance

Review this annually. Have recently increased some excesses to keep premiums down.

6,400 0.01 6 22
ACC

Included in wages paid as owners share can't be split out.

0 0.00 0 0
Total Farm Working Expenses 906,640 1.78 889 3,126
Cash Operating Surplus 744,930 1.46 730 2,569

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.

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

Expect to end the 18-19 season with the same number of animals as at the start so there is no change in the value of livestock numbers.

0 0.00 0 0
Labour adjustment

This is to reflect the input of unpaid labour by the business owner equivalent to 1 FTE (full time equivalent).

90,000 0.18 88 310
Feed inventory adjustment

The feed on hand at the end of the season is expected to be up slightly compared with the start by about 14 t DM. The sharemilker share of this is $2,100 (50% of 14 t DM @ $300 per t ).

2,100 0.00 2 7
Depreciation

Based on 16-17 financial statements. Sharemilker owns a lot of the plant and machinery necessary to do a lot of the cultivation and harvesting work.

60,000 0.12 59 207
Dairy Gross Farm Revenue 1,651,570 3.24 1,619 5,695
Dairy Operating Expenses 1,054,540 2.07 1,034 3,636
Dairy Operating Profit 597,030 1.17 585 2,059

More information

Click the links below to view this farm's actual budget figures.

To develop your own farm budget using DairyNZ budget templates click here

For more benchmarking information visit DairyBase