Taranaki

Sean and Lynnette Delehanty are owner operators of this system 3, 73 ha farm located in South Taranaki.

80% of the farm is flat and the remaining is a grazeable gully. Milk production for 2018-19 is budgeted at 76,000 from 220 Friesian - Friesian cross cows, (1,041 kgMS/ha and 380 kgMS/cow), with operating expenses of $4.09 per kg MS, (FWE $3.00 per kg MS).

A key focus this season is maximising milk production before Christmas, so stocking rate has increased 10% compared with the previous 2 years.  Once a day milking will be commenced again early in the summer and options for cropping as a way to increase home grown feed will continue to be researched.

The size of the business means profitability has to come from efficiently implementing a simple system and close monitoring of income and costs is a critical part of this implementation.

2018/19 Numbers at a glance

Total kgMS Cows Milked Hectares (Effectives) Net Dairy Cash Income ($/kgMS) Total Farm Working Expenses ($/kgMS) Total Operating Expenses ($/kgMS) Dairy Operating Profit ($/ha)
76,000 210 73 $7.04 $3.00 $4.09 $3,078

2018/19 Forecast Budget

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

Production for 2018-19 is budgeted at 76,000 kgMS. Advance milk pirce used is $4.93 per kg MS. The deferred income is based on 75,344 kg MS @ $1.30 per kg MS and dividend income is based on 78,800 shares @ $0.25 per share. Revenue is net of DairyNZ levy using 76,000 kg MS @ 3.6 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 It may or may not be out of date based on new information from Dairy Companies.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.

489,300 6.44 2,224 6,703
Net Dairy Livestock Sales

Includes $5,000 worth of 4 day old beef/Friesian bull calves and $2,500 worth of bobbies - (bobbies make up 3% of total income, bull calves make up 6-8%). 42 cull cows/in-calf heifers at an average of $750 . Purchase 3 service bulls for $7000, budget to get $6000 when sold at end of mating so a net costs of $1,000.

38,100 0.50 173 522
Other Dairy Cash Income

Income from a rental house on the farm

8,000 0.11 36 110
Net Dairy Cash Income 535,400 7.04 2,434 7,334

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

Covers relief milker from September.

(incl. ACC)
5,000 0.07 23 68
Animal health

Pro-active and vigilant which minimises the need for vet visits. The 2017-18 calving was trouble free and no vet callouts were required. Whole herd pregnancy testing planned this year, both through milk sampling and vetting to get correlations with a view to going to milk sample only in future. Focus on observation and recording through mating, no anoestrous treatment used. No lameness or mastitis issue on this farm - 80% of farm races are concrete and furthest distance walked is about .80 km). Blanket dry cow treatment is done at drying off. Includes cost of teat spray (which is 4% of total animal health costs), do manual teat spraying. Also included are calf vaccinations, and all animal drenches - do a pour-on over whole herd in Oct. Calves drenched monthly until January with an oral drench. From February pour on is used.

11,000 0.14 50 151
Breeding and herd improvement

AB for 5 weeks, using LIC premier sires, then 3 weeks with 3 bulls in with the herd followed by 2 weeks of AB using a crossbred short gestation bull. Includes 4 herd tests per year. Heifers are mated to Jersey bulls. Costs include tail painting and MINDA.

10,500 0.14 48 144
Farm dairy

Includes detergent, rubberware replaced once a year and miscellaneous shed expenses. Follow standard cleaning procedures and recommendations for detergent use.

9,300 0.12 42 127
Electricity

Have an older 29 bale rotary dairy that has inefficient water heating. Chiller was upgraded two years ago so have improved the efficiency of electricity use.

(farm dairy, water supply)
13,000 0.17 59 178
Supplements made

Approximately 130 bales (200 kg DM) baleage made on farm @ $32 per bale for baling and wrapping, plus cultivation work for 4 ha of turnips. Do own mowing and tedding. Choose to make surplus pasture into baleage rather than lower cost silage as it means small surpluses can be harvested quickly so paddocks are not out of rotation for too long. Bales can also be handled easily by one operator using a bale feeder.

(incl. Contractors)
7,000 0.09 32 96
Supplements purchased

Budget is for $20,000 for Proliq (180,000 litres), $24,000 for PKE (100 ton), $7000 for 90 square bales of straw (18 t DM). The budgeted PKE is not contracted yet for this year and the amount purchased will be price dependent. Includes freight.

51,000 0.67 232 699
Calf rearing

Plan to rear about 50 heifer calves. Budget is for $1400 for 2 ton of calf meal, $600 for sawdust, $1500 for milk powder. Use milk powder when the cost is cheaper than the price of whole milk. Calves are fed once a day and have access to hay and meal. They are weaned at 100 kg, usually achieving this at 8 weeks.

5,300 0.07 24 73
Young and drystock grazing

Pay grazier $3000/month for 50 R2 yr heifers. Grazier is on a weight gain contract. If above target farmer pays more for grazing. If under weight farmer gets a rebate. This is expensive but does protect the investment in young stock. Grazier provides weight gain data and is in regular contact with the farmer. Heifers are off from May to May. Includes cartage.

32,000 0.42 145 438
Fertiliser

Soil test results: Olsen P = 77, Potassium = 19, Sulphur = 20. Good P & K levels on farm, so only applying ammonia sulphate this season in spring and autumn maintain S levels. Budgeted on about 14 ton urea this season. Total N applied for the year is about 120 kg N per ha (urea and Sulphate of ammonia), but does depend on the autumn - if it is too dry less N will be applied. Effluent is applied to 12 ha.

(incl. N)
18,000 0.24 82 247
Regrassing & cropping

All costs associated with cultivation, sprays and seed costs of for 4 ha of turnips and an additional 2 ha of pasture renewal. Includes 2 additional weed sprays for the turnip crop. Did this in 16-17 which helped to achieved a 16,000 kg DM per ha crop.

4,000 0.05 18 55
Weed and pest

20 litre drum of spray and dye cost for spot spraying thistles and ragwort.

1,000 0.01 5 14
Vehicles & fuel

Includes the cost of running one tractor and two bikes (4 wheelers) with some allowance for one off repairs and maintenance. Similar to previous years.

8,500 0.11 39 116
R&M

Tracks are maintained every second year (done last season). Plant and machinery R & M is about $12,000.

(land, buildings, plant, machinery)
20,500 0.27 93 281
Freight and general farm expenses

Protective clothing

2,000 0.03 9 27
Administration

Accountant fees, (farmers does own GST), phone, postage, subscription, general administration. No change from previous years.

9,000 0.12 41 123
Insurance

Put the excesses up on building to reduce premium in previous year. Includes: Milk losses, public liability, all building, all machinery, if cowshed burns down, milk cheque is covered for the season.

12,500 0.16 57 171
ACC
300 0.00 1 4
Rates
8,300 0.11 38 114
Total Farm Working Expenses 228,200 3.00 1,037 3,126
Cash Operating Surplus 307,200 4.04 1,396 4,208

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

Numbers will remain similar, just slight variation across the different classes of stock. More R 1 and R 2 heifers and a few less MA cows.

270 0.00 1 4
Labour adjustment

Unpaid labour from farm owners and family equates to 1.4 FTE.

65,000 0.86 295 890
Feed inventory adjustment

Expect to have slightly less feed on hand at the end of May 2019 as the closing feed on hand 31 May 2018 is a bit higher than usual due using less in the autumn of 2018 because of the good pasture growth.

-1,800 -0.02 -8 -25
Depreciation

Based on 2016-17 financial statements. No plan for any capital purchases.

16,000 0.21 73 219
Dairy Gross Farm Revenue 535,670 7.05 2,435 7,338
Dairy Operating Expenses 311,000 4.09 1,414 4,260
Dairy Operating Profit 224,670 2.96 1,021 3,078

More information

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