All young stock are grazed off. The 2018-19 budget is based on 104,500 kg MS (1,222 kg MS per ha and 380 kg MS per cow), with operating expenses of $2.46 and FWE of $1.67 per kg MS.
2018-19 Numbers at a glance
|Total kgMS||Cows Milked||Hectares (Effective)||Net Dairy Cash Income ($/kgMS)||Total Farm Working Expenses ($/kgMS)||Total Operating Expenses ($/kgMS)||Dairy Operating Profit ($/ha)|
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 17-12-2018
Cash flow for the season to date is very close to budget.
Production to date, (17-12-2018), is 2% up on last season as a result of better growth rates and better utilisation. Imported feed usage is 40% less than budget, and supplements made to date, (while on budget), are nearly three times more than the same time last season.
A less than ideal calving rate after 6 and 9 weeks impacted early seasons production.
Production on a daily basis is on a par with last year which is just slightly below budget.
Soil moisture levels are well above this time last year, growth rates are still 50% higher than last year and are above current daily demand so pasture cover is increasing. Current pasture cover is on target at 2200-2300 kg DM/ha and is of good quality. Cow condition score is 4.3, again up on last year, (by 5%).
Supplements available for the summer/autumn are 410 kg DM per cow, which is more than double last season.
Given the current situation, the farm is well on track to still produce 104,500 kg MS. Farm working expenses are as budgeted and at this stage there is unlikely to be any changes over the next 6 months. An operating profit per ha in excess of $2,000 per ha is still on target, despite a weakening in milk price.
Plans to manage risks
The main risks to the business at present are the softening milk price. Costs are well under control and on track for the $1.67 per kg MS that was budgeted.
A further drop in payout will impact the projected savings plan to the end of the season, which will affect borrowings for the extra cows and the move to the larger job.
As always continual monitoring of the budget will be done and focus will be ensuring all inputs are used as efficiently as possible.
Feed and Pasture
- Have just taken the biggest cut of silage for this farm in the past 3 seasons. 60 t DM has been harvested so far and another 10-12 t DM to be cut soon. This amount was budgeted for, but was not expected to be largely all done by the end of December. This time last year had 22 t silage on hand.
- Rainfall to date is 837 mm which is 70 mm more than last year. The big difference is the distribution. June and August were above last year but September and October were below (September was 63 mm compared with 203mm in 2017). Another interesting comparison is that December 2017 the rainfall was 12 mm for the entire month – this December to date, 100 mm has already fallen.
- Supplements purchased is down. The budget was for 50 t PKE to be fed for the season, now it is likely to be 28-30 t, including 10 t that was on hand at the beginning of the season.
- As planned, 3ha of maize was planted,(about a week earlier than last year), and is growing well. Expected yield is 65-75 t DM. With 40 t DM needing to be left on hand at the end of the season, 25-35 t DM will be available for use in the summer and autumn.
- Currently still have 15 t Maize silage on hand from last season, so with 25 t DM Maize to come for this autumn, and 74 t DM silage for summer/autumn use, there is 410 kg DM/cow available for 275 cows for the summer.
- Pasture cover, (PC), is 2,289 kg DM/ha including 6 ha of silage still to cut. For the same time last year PC was about 2,000 kg DM/ha.
- Have used about the same amount of N to date as last season (101 kg N/ha), but this year have been following the cows every grazing with a lower application.
- The average growth rates this spring/early summer have been about 10% up on last season, but more importantly they have been more consistent. (The low but frequent N application has likely contributed to this but weather conditions have been kinder too).
- The average growth rate for the last 3 weeks has been 95 kg DM/ha per day whereas this time last year rates were dropping and averaged only 60 kg DM/ha per day for the same 3 week period.
- This time last year cover was dropping quickly, but currently it is increasing. Daily demand is about 55 kg DM/ha per day and growth rates are between 80-100 kg DM/ha/day.
- This will be used to extend the rotation and/or increase the amount of silage made. The herd is being pushed a little now to ensure the right post grazing residuals are achieved so that pasture quality is maintained for this next round heading into summer.
Calving and reproduction
- Mid-point from PSC was 14 days.
- Calving rate after 3 weeks was 64%, 6weeks was 79% and 9 weeks, 95%. The calving rate for the last 6 weeks was below target resulting in lost days in milk which affected early season milk production.
- A slower 3-6 week calving rate meant that by the end of September production was 22% behind the previous year. October was a record month for the farm and all that deficit was wiped.
- Hereford bulls were used after AB last season and the ones used seemed to have a longer gestation length. Many of the cows in calf to Hereford went well beyond their due dates. This contributed to the slower 3-6 week calving rate.
- Used Angus bulls this year, (partly for bio-security reasons, but also hopefully will have shorter gestation length).
- 3 week Submission rate is 86% (4% up on last year). This is with no intervention or treatment. Conception rate to first mating is above the national average so 3 week in-calf rate is on track.
Other points of interest
- Milk income is on budget
- Current position for milk production is up 4% for the month of December to date, and on a daily basis now milk production is tracking last season.
- Moving to a bigger job next season so minimal culling will be done. This was in the budget.
- Have spent $2,900 more on bulls than budget.
- To 30th November FWE as per cashbook was $706 up on last season, so costs are on track. There are some unders and overs. Nitrogen costs to date were up on budget but this is timing related. Now pay for N as it is used, via “My Farm Balance account” instead of a lump sum settling up at the end of the season.
- Calf income is up as the Hereford calves were sold for more than was budgeted -not enough to make up for the losses due to lost days in milk though.
- Cow condition score is 4.3 compared with 4.1 at the same time last year.
- Last year went to once a day milking December 27th. With the current feed position this will be delayed this season.
- The plan had been to be debt free after 3 years, this has been achieved after 2 and a bit years, so have been able to fast track the move to a bigger job.
- The budget is constantly being reviewed, particularly as the payout keeps changing, and risk assessments are updated regularly.
- The focus is now on meeting savings targets in preparation for the purchase of larger herd and move to the bigger job at the end of the season.
Bio-security & Environment
- All boundaries are fenced off, but have bought more temporary fencing to ensure that the recommended 1.5 m buffer is achieved on all boundaries.
- Scrubbing stations at the Dairy Shed.
- As part of bio security plan this year changed bull provider.
- Try to limit the number of visitors to the farm and monitor their movements.
- Request that trucks be cleaned before coming onto the property.
- Next year will consider not using bulls at all as this is a big source of risk for a dairy farm. Now a trained AB technician so will likely use all AB, (and more short gestation length bulls).
- Planned start of calving is July 22 for mixed age cows and July 19 for R2 heifers. This is slightly later than the rest of the district.
- A focus on good reproduction performance with a 6 week in calf rate of 78% means that over 70% of the herd is expected to be calved within 3 weeks from planned start of calving.
- Monitoring pasture cover regularly and feed budgeting are important. Pasture cover assessments are done weekly at critical times, particularly, calving till pasture growth exceeds demand. Through late spring to early summer, when growth can change rapidly additional monitoring of a few paddocks is done mid-week so that changes can be picked up and adjustments made to the grazing plan. At other times, and in particular, through the winter, pasture cover assessments are fortnightly.
- The spring rotation planner is followed until daily pasture growth exceeds demand.
- Supplementary feed use is based on feed budgets, pre grazing covers and post grazing residuals. The aim to produce 80% of liveweight per cow. The herd average liveweight, (as weighed), is 431 kg per cow.
- Pit silage and some baleage are made on the milking platform from identified surplus as per the feed budgets and pasture covers. Typically this is about 75 t DM. Baleage is made from the later surpluses that occur which tend to be smaller.
- 3 ha of Maize for silage is planted on the milking platform each year.
- For the 2018-19 season the plan is to use 50 t PKE, fed in troughs set up on an old concrete yard near the farm dairy. The cost is shared equally with the farm owner. August is typically when the price is low so try to secure the contract for the PKE at this stage and aim for 6-12 months ahead.
- Use 140 kg/ha of N at lower application rates of about 14 kg/ha of N post grazing every round when soil and weather conditions are suitable. The previous 2 seasons, 120 kg/ha of N was used and applied at heavier rates after every second grazing which left some gaps in grazing levels through spring.
- 1.3 FTE of unpaid labour for the farm is provided by the business owners. The sharemilkers are contractually obligated to have an additional labour unit on farm between mid-July and early December.
- Take extra effort and attention to detail at key times to optimise outcomes. For example, during calving, collect newly calved cows and their calves twice a day and milk cows immediately to reduce mastitis. SCC average for the last 2 years is 124,000 and incidence of mastitis for the season has dropped from 12 cows to 8 cows.
- Weaners go to grazing from December 1. Yearlings are at grazing from June 1st to May 1st. The in-calf heifers stay away from May 1 to June 1 at winter grazing rates.
- Young stock liveweights are monitored and actions taken if need be to ensure that target liveweights are achieved. Calves are weaned at 80 kg and go to grazing at 100 kg. The aim is to have R2 heifers at mature liveweights by May 31 when they join the herd before calving.
- Drying off and timing of culling decisions are made based on feed budgets and cow condition to ensure that cows reach their target condition score of 5, (heifers and R 3’s 5.5), by the end of May and pasture cover 2,500 by July 1.
- Have budgeted this year to upgrade our current trailer to allow transport of 1t+ fertiliser bags instead of paying for haulage, or making many small loads. Will also save transport costs for taking the tractor to the service centre.
Key success factors
- Have documented and measurable goals. For example "be debt free within 3 seasons of starting 50-50 sharemilking" and "purchase first dairy farm by 2022/23 season".
- A strong focus on debt repayment. Will be debt free in July after just over 2 years of 50:50 sharemilking, so for 2018-19 the focus will shift to accumulating cash.
- Do all own GST returns and cash flow budgeting, which means there is a budget forecast to report against. Have always had a policy of saving a set amount each month so actual cash position each month is always monitored against budget.
- Having good control of all aspects of financial management has meant we been able to cancel OD facility as it has never been used and forecasts show it is not needed. This saves on bank fees.
- Review previous season’s performance when planning for the coming season.
- Use benchmarking to help identify areas for improvement.
- Understand the cost structure of the business and where you can make savings without impacting performance. Identify the highest cost categories and examine in more detail to ensure efficiencies are maintained. Always get quotes before committing to expenditure and note it is not always the cheapest that is the best option!
- Always know our financial position so we can quickly evaluate new opportunities.