West Waikato

This system 2, 50:50 sharemilking business, farms 275 crossbred cows on 85.5 effective hectares of low lying peat near Te Awamutu.

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)
104,500 275 85.5 $3.97 $1.67 $2.35 $2,329

2018/19 Forecast Budget

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

This is net of DairyNZ levy (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 It may or may not be out of date based on new information from Dairy Companies.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.

380,100 3.64 1,382 4,446
Net Dairy Livestock Sales
34,500 0.33 125 404
Net Dairy Cash Income 414,600 3.97 1,508 4,849

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

Contractually obligated to have a second staff member through spring - mid July to start of December. Take holidays when once a day or dry to reduce relief labour costs.

(incl. ACC)
16,900 0.16 61 198
Animal health

Covers mineral, both in water and injected, (Cu, Se, B 12, Zn). The herd is drenched with Mg through the spring. All vaccinations for young stock plus vaccinations for the whole herd for BVD and Johnes are included. R 2 Heifers are teat seased and cows with SCC over 120,000 are treated with dry cow therapy (autumn 2018 this was 62 cows). Matitis incidence is low (8 cases 2017-18) in part due to the policy of collecting newly calved cows two times are day and milking immediately. Fertility intervention is based on scanning the herd pre mating for reproductive health.

24,150 0.23 88 282
Breeding and herd improvement

AB for 5 weeks. Using forward pack this year so semen costs are up $3 per straw compared with previous years. Use 3 Angus bulls with the herd for 5 weeks after AB. The heifers at grazing are run with 3 Angus or Jersey bulls. No anoestrous treatment is planned this year. Analysed response to CIDR use in previous years and will opt for once a day milking and preferential feeding if required.

8,970 0.09 33 105
Farm dairy

Shed is 25 a side herringbone.

4,830 0.05 18 56
Electricity

Negotiate power contract. The shed has just been fitted with a larger plate cooler which will increase power usage a bit. Milking is 11 rows a peak.

(farm dairy, water supply)
10,900 0.10 40 127
Supplements made

About 75 t DM of silage/baleage is made each year on the milking platform. The first 2 cuts are made as pit silage and the last cut is baleage as it is usually smaller quantities. The costs cover contractors for everything apart from mowing. Care is taken with covers and wrapping and where possible it will be reused.

(incl. Contractors)
8,000 0.08 29 94
Supplements purchased

50t PKE @ $235 per t landed, 50% share.

6,000 0.06 22 70
Calf rearing

$440 for bedding and about $1,960 for 2.3 t meal.

2,400 0.02 9 28
Young and drystock grazing

The grazing costs as per sharemilking contract are; 59 % share of grazing for 55 weaners for 22 weeks @ $8.5 and 64% share of grazing for 55 Yearlings for 52 weeks @ $12.5, plus 100% share of an additional 10 weaners and 10 yearlings.

37,100 0.36 135 434
Winter grazing

50% share of 55 In calf heifers from May 1st to June 1st.

2,230 0.02 8 26
Fertiliser

Covers the 50% share of the cost of 140 kg N per ha plus spreading costs for the farm fertiliser. Purchase of a new trailer will allow transport of 1 t+ fertiliser bags instead of paying for haulage so cartage on nitrogen is nil.

(incl. N)
9,270 0.09 34 108
Regrassing & cropping

About 5-6 ha per year are undersown. The sharemilker share is about $800, based on $140 per ha for drilling the seed.This cost also includes about $7,000 for share of 3 ha of maize grown on farm.

7,800 0.07 28 91
Weed and pest
420 0.00 2 5
Vehicles & fuel

Run 2 stroke 2 wheelers unless towing machinery. This is net of fuel rebates of $1,898. Vehicles are of a basic nature so most of the maintenace can be done in house.

9,810 0.09 36 115
R&M

Majority of machinery was purcashed new at the commencement of sharemilking so is less than 3 years old.

(land, buildings, plant, machinery)
1,570 0.02 6 18
Freight and general farm expenses

Includes protective clothing, recycling costs and freight.

3,000 0.03 11 35
Administration

Covers accountancy, consultants, bank charges, subscriptions, communication, postage and stationery. All GST and PAYE are done in house which saves money.

7,800 0.07 28 91
Insurance

As well as reasonable cover for possessions, the property is on a busy road so have opted for higher than normal public liability cover. Also have cover for 20 cows, (against fire, electrocution or lightning strike). This cost also includes income protection insurance.

4,370 0.04 16 51
ACC
4,140 0.04 15 48
Rates

Farm is on town water. This is the costs of water rates.

4,800 0.05 17 56
Total Farm Working Expenses 174,460 1.67 634 2,040
Cash Operating Surplus 240,140 2.30 873 2,809

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.

Non-cash adjustments $TOTAL $/KgMS $/COW $/HA
Value of change in Dairy livestock

This is the last season of contract on this farm, therefore want to maintain numbers to move to larger job. Expect to have about 20 more cows on hand at the end of the 2018-19 season. This off sets the lower livestock revenue from selling fewer culls.

30,000 0.29 109 351
Labour adjustment

For 1.3 FTE of unpaid labour.

56,000 0.54 204 655
Feed inventory adjustment

Feed on hand is expected to remain the same at the end of the season compared with the beginning.

0 0.00 0 0
Depreciation

Based on 16-17 financial statements plus allowing for additional years depreciation and purchase of a new trailer.

15,000 0.14 55 175
Dairy Gross Farm Revenue 444,600 4.25 1,617 5,200
Dairy Operating Expenses 245,460 2.35 893 2,871
Dairy Operating Profit 199,140 1.91 724 2,329

More information

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