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 $2,000 per ha.
2018/19 Numbers at a glance
|Total KgMS||Cows Milked||Hectares (effective)||
Net Dairy Cash Income
Total Farm Working Expenses
|Total Operating Expenses ($/kgMS)||Dairy Operating Profit
2018-19 half-yearly update: December 2018
Six months into the season this farm has provided an update on how they are tracking, what, if any major challenges to their budgets they are facing and plans for managing any variances for the rest of the season.
Season to date 18-12-2018
Production to 17th December is 245,383 milksolids, 600 kg MS behind the same time last season. Last season included 3,000 kg of last season’s milk produced in June. There was no June milk this year.
Imported feed used is similar to previous years but more supplement has been harvested to date.
Currently, daily production is on budget. Pasture cover is good and holding and pasture growth rates are 80-90 kg DM/ha per day. Quality is an issue so more topping is being done and some young stock have been brought home to tidy up some areas.
While soil moisture levels are better than last year there has been a lack of rain recently and reasonable rainfall is needed soon. This time last year it was quite dry, grain was being fed at a higher level and silage supplementation was about to be started. Grain is being fed now at 2 kg DM per cow per day which is low for this time of year.
Production total for the season should still be on target for 1,759 per ha from 16 less cows. The original budget was based on a milk price, (advance and deferred), of $5.50 which is still quite conservative so income should still be on budget for the season.
Farm operating expenses should still come in close to budget of $2.07 per kg MS when increases in feed on hand are taken into account.
Plans to manage risks
The softening milk price and the current lack of moisture are the main concerns for the business at present.
Using a conservative milk price has helped protect a little from the drop in forecast milk price.
With the current levels of supplement on hand, (and still to be made), the impact of a dry spell on the budget should not be an issue. There is a lot more silage than usual going into summer that is surplus to wintering requirements. The majority of this has already been paid for. The plan is to work with the budgeted amount of imported feed so costs should not change.
Feed and Pasture
- Supplements made is 2250 bales of baleage and 100 t DM of silage. There is another 300 t DM of silage to come, 150 t DM whole crop barley to be made (60 t DM of this will be sold). This is well up on budget but the increased cost will be offset by an adjustment for more feed on hand and the end of the season as a lot of this extra feed will be carried forward for use next winter.
- 18 ha of precision planted Swedes and 29 ha of kale are in the ground and growing well, as per budget.
- As budgeted, 540 t of mixed PKE, corn gluten and barley pellets have been contracted, so that cost is now fixed. Total cost for that imported feed will be about $1,600 up on budget as the PKE was contracted at $20 per t higher than budgeted.
- To date have 360 kg DM per cow (out of a total of 490 budgeted, have been fed so that is on target.
- N use is as per budget.
Calving and reproduction
- PSC to mid-point was 14 days which is a little slower than last year (11 days).
- Calving rate after 3 weeks was 69%, 6 weeks was 90% and 9 weeks was 100% from a 10 week mating period.
- Submission rate (SR) after 3 weeks was 86%, which is similar to last year, (85%).
- NRR is currently sitting at 72-73% which is better than 2017.
- The number of non-cycling cows was a little higher than last year. There were some issues with difficult calving’s with the 2 year old heifers as a bull with higher calving difficulty was used and that has affected the number of anoestrus cows in this age group.
- This season used AB Jersey bulls on the higher BW heifers and ran Jersey bulls with the lower BW heifers.
Other points of interest
- 1020 cows were wintered. Peak numbers milked was 1004 cows.
- Grazing is up on budget as 50% of R 2 heifers are at external grazing so more winter feed can be harvested on the support block. This will save wintering costs for 19/20 (and bring in some revenue in the form of taking in grazing).
- Fertiliser is mostly forward purchased so rising prices have not impacted yet.
Bio-security & Environment
- Have buffer fences with neighbours.
- Have increased bio-security processes with incoming stock.
- Insist that all carriers clean vehicles before carting stock.
- Maximise pasture quality and utilisation by monitoring pasture cover and use of supplement inputs through regular farm walks and assessment
- Use feed budgeting/spring rotation planner to ensure targets for feed cover and cow intakes are met
- Ensure targets for cow condition are met at critical times by doing BCS throughout the season
- Dry off based on pasture cover and cow condition
- Minimise pasture damage and utilise supplementary feed with the use of a feed pad that can handle all the cows at once
- Have a team approach to managing staff work load. Give staff areas of responsibility, but also ensure they can cover for each other. Provide training and support for this to happen
- Have a split herd policy to allow preferential treatment of late calving, thin or sick cows. This enables them to get back in calf better without relying on other interventions
- With the support block now at 199 ha, the farm is self-contained for all young stock and winter grazing
- In lieu of grazing costs on the support block the sharemilker pays for all feed harvested and cropping costs, 50% of nitrogen and all fertiliser spreading as well as all annual maintenance such as drain cleaning, hedge trimming and weed and pest as relate to the support block
Key success factors
- Prepare own budgets, review and update regularly so always aware of financial position and can take advantage of opportunities as they arise
- Long term goals/vision
- Have a focus on completing tasks
- Always looking for opportunities to grow business
- Keep up to date with prices of inputs
- Have good management team – banker/accountant, consultant and utilise their expertise
- Do the basics well, from rearing young stock, managing staff and cows to making silage, growing crops and managing pasture