Budgeting, Corrie and Donna Smit (Bay of Plenty)


19 min read

Farm facts Numbers at a glance Mid-season update Management decisions 2023-24 forecast budget Previous season reviews Additional resources

This low input farm near Edgecumbe, Whakatane, has two adjoining dairy farms of similar size making up 160 effective ha milking 580 FX cows. The dairy farms are supported by 52 ha of support block which provides. The farm is low lying which makes it vulnerable to very wet weather in the winter, but less susceptible to summer dry. Pasture harvested for this farm averages 16.5 t DM/ha. This, combined with good cost control has contributed to this business having an operating profit in the top 10% for the district. 

Corrie and Donna Smit own this low-input farm business near Edgecumbe, milking on two similar-sized platforms with a support block providing the majority of winter and young stock grazing.

This low-lying farm is vulnerable in wet weather and has been adversely affected by the the heavy rain events that have swept the region in the last 12 months, (the 2022-23 production of 191,600 is the lowest since the 2017 autumn floods).

The 2023-24 budget is based on milksolids production that is about 7-8% lower than usual as the farm is much wetter than normal going into the winter which will affect pasture growth rates in the early part of the season. The farm working expenses include an extra $0.15/kg MS for additional winter grazing and pasture renovation as a consequence of the very wet 2023 autumn the farm has been through.

Farm facts

Business type: 



Edgecumbe, Whakatane

Farm size: 

160ha effective milking platform

Farm size (block nearby):

52ha effective support, (47 ha owned and 5 ha leased)

Peak cows: 

580 FX


15/07/2023 cows and heifers

Stocking rate:

3.6 cows/ha

Farm system: 

2 (1-10% feed imported)

Wintering system: 

100% of herd wintered externally

Wintering system (on support block):

6-8 weeks


203,500 kg MS budgeted, 1,374 kg MS/ha

Production (3 year average):

379 kg MS/cow (production 203,500 kg MS)

Numbers at a glance

Financial KPI 2023-24 budget
Net dairy cash
income ($/kgMS)
Total farm working 
expenses ($/kgMS)
Total operating
expenses ($/kgMS)
Dairy operating profit ($/ha)
$8.36 $4.01 $4.52 $4,875
Physical KPI 2022-23 est
Pasture and crop
harvested (t DM/ha)
Purchased N
surplus (kg N/ha/yr)
GHG (t CO2 
Six week
in-calf rate (%)
14.8 6 9.2 65

Find out more about these KPI's and how to calculate them for your own farm here.

2023-24 mid-season update January 4th 2024

Numbers at a glance

2023-24 mid-season update as of 4thJanuary 2024.

View/download PDF of updated budget

Financial KPI's Budget Updated forecast
Milk Production (kgMS/ha) 1,272 1,272
Milk Production (kgMS/cow) 351 355
Net Dairy Cash Income ($/kgMS) $8.36 $8.33
Total Farm Working Expenses ($/kgMS) $4.01 $4.99
Cash Operating Surplus/Deficit ($/kgMS) $4.35 $3.34
Gross Farm Revenue ($/kgMS) $8.36 $8.35
Operating Expenses ($/kgMS) $4.52 $5.51
Operating Profit ($/ha) $4,875 $3,616


Comments and points of interest

Key Points

•    Production is up 20% on last season and 13% up on budget
•    This advantage has come at a cost with farm working expenses (FWE) forecast to be up 25%.
•    To date it has been a normal rainfall season but peak growth rates in the spring have not been as high as usual.
•    Most of the increase in FWE is due to additional winter grazing and nitrogen purchases to mitigate the effects of poorer early winter pasture growth due to the very wet previous season.


Production to date of 140,178 kg MS which is 13% up on budget and 20% up on last season.  This is from 573 cows, which is 7 less than budget.  
It has been an average winter and early spring with regard to rainfall and soil moisture with dry cows only needing to be stood off pasture 5 times.
Pasture cover and cow body condition score at the end of May 2023 were not on target. Additional winter grazing was secured for the herd at the last minute which allowed for 100 cows to be grazed off for an extra 6 weeks. This has added another $30,000 to grazing costs, but helped to ensure cows gained adequate condition pre calving and pasture covers at calving were on target. 
An extra one and a half rounds of nitrogen was applied in June and July as leaching had been higher in the autumn with all the summer/autumn rain that the region received. Again this helped to increase pasture cover at calving to near target, but has meant fertiliser costs are up on budget.
An improved calving pattern means that cow milking days to the end of December is up on last year despite a few less cows. 121 t DM of Silage and hay was fed from the start of calving through to early October. For the first time in 30 years both herds went to once a day milking 20th September for the 2 weeks prior to mating.
The cows have maintained good residuals all season and even now are grazing done to 1500 kg DM/ha. Pastures grazed by the younger herd have just needed to be topped on a few occasions to help maintain quality.
Overall, pasture quality has been good and there is a good clover content due to warm soil temperatures, regular rainfall over recent weeks and good grazing residuals.
Silage made on the milking platform is less than last season with 80 bales of silage made off 15 ha. Last season 23 ha of baleage was made on the milking platform.
Pasture growth rates on the support block have been good and all supplement needed for the winter has been made on the support block, (228 bales). With continued good pasture growth rates, rather than making even more supplement on the support block to control pasture, 20 yearling steers were purchased late spring 2023. They will be sold in the autumn for a profit of about $400 per head. 
There have been very few animal health issues so far this year. At drying off last season all cows over 150000 SCC were treated with long acting antibiotic which definitely reduced the incidence of mastitis in the early part of the season. Somatic cell counts have been good during the early part of the season and incidences of mastitis in the early season have been lower.
Unscheduled repairs and upgrades were made to all the races in August to repair damage that resulted from the extremely wet summer and autumn. This has added $25,000 to the repairs and maintenance costs.
Rates rises and a change to the timing of payments has also significantly increased the costs of rates for the year.

Current situation

The herd is currently producing 1.52/c/d (TAD) from 573 cows, 10% up on the same per cow per day last year. Production is 8.75% up on a daily basis.
Intakes are 17 kg DM/cow day pasture only. Up until now the weather has been cooler and the cows have not been mobbing so they are continue to maintain good DM intakes. Cow condition is estimated to be about 4.3 BCS so is similar to last season. 
Pasture cover is 2100 kgDM/ha/day and with growth rates in the past week of 80 kg DM/ha/day pasture cover has been rising. With the higher paspalum content the grazing rotation is 18 days to maintain quality.
There is 7 ha closed at present which may be harvested for a light crop of silage, or returned to the round if growth rates drop suddenly.
Looking forward
Water tables are still good and recent rain over Christmas and New Year have kept the soils moist. The milking platform is a good summer farm with high water tables and pastures with higher paspalum content, but any extreme weather event can have a big impact here. 
Higher day time temperatures seem to really affect the cows regardless of how much feed is available, and with El Nino forecasts there is still concern about a prolonged dry autumn. Therefore the forecast milk solids for the season has been kept at 203,500 kg MS despite actually being 13% up on budget and 220,000 kg MS still looks achievable.
100 t of PKE has been contracted for this season which will provide 158 kg DM/cow for 570 cows.  The plan is to start feeding this when it starts getting too hot for the cows.  It allows them to eat some of their diet quickly so production doesn’t drop too much with the heat.
All the supplements made to date will be carried forward to next season so are not included in any feed budgets to the end of May.
To date 70 kg N/ha has been applied. This is up on budget. There will be at least one more application of nitrogen, (about 23kgN/ha), so the total for the year will likely be 90-95 kgN/ha which is up on budget of 80. 
At this stage feed budgets are looking good till at least February. Pregnancy testing has been delayed until March, (for social reasons as the owners are biking from Cape Reinga to Bluff!), so culling can be done after then if feed supply becomes limited.

Calving and reproduction

•    The calving rate was 62% after 3 weeks, 78% after 6 weeks was 96% after 9 weeks.  This is much improved on last season’s figures of 53%, 75% and 94% respectively.
•    Submission rate is 74% which is down on last year. This year used 2 rounds of “beacons” for heat detection which are more accurate and make identification easier. Last year’s submission rate of 81% was probably in part due to some cows being incorrectly identified as in heat.
•    132 replacement calves were reared plus 55 beef animals. The beef calves were reared on milk powder at the support block and have now gone to the beef enterprise.
Other points of interest
•    Milk income is still likely to be similar to budget as the original budget was prepared on a $6.25 /kgMS milk price. The advance is now expected to be $6.10 but the dividend payment is higher.
•    Total farm working expenses will likely be about $200000 up on budget largely due to extra winter grazing, nitrogen, R & M and rates. Depending on the final milk solids produced this is between 15% and 25% up on budget.

Management decisions

Strategy and financial

  • Vision
    To maximise growth with quality assets, careful timing, superior relationships, sustainable profitability, and a balanced lifestyle of family and fun.
    Have a clear strategic plan and awareness of the importance of good governance.
    Be industry aware so that business decisions are made based on up to date industry information.
  • Budget updates
    Do farm administration on a daily bases so cash flow and budgets are always up to date.
  • Debt
    Repayment of debt is a priority, which means the business is better able to withstand a downturn.
  • Know the current situation
    Monitor farm physical information frequently so decisions can be made quickly and are based on current farm information.
  • System
    Have a low-cost, simple system that has low environmental impact which is easily communicated and replicated.
  • Communication with staff
    Have clear objectives and communicate that to staff. Give staff responsibility and expect them to operate unsupervised.
  • Environment
    Continue to follow best practice environmental guidelines to ensure long term sustainability for the land and the business.
  • Networking
    Network frequently and always be open to new ideas.

Farm policy and infrastructure

  • Farm policy is to operate a low input system, with imported feed and winter grazing approximately 8-10% of total feed used. In low payout years the owners are prepared to reduce the amount of imported supplement.
  • The farm has two 20 a-side herringbone sheds.
  • The furthest paddock is 1.4 km from the dairy shed.
  • The farms are well subdivided, with good internal races and water supply.
  • Young stock are grazed off the milking area from weaning until May 1st.  They are wintered on the milking area until the start of calving when they are returned to the support block. The yearlings can be brought back to the milking platform during the season to help deal with any feed surpluses. This has usually been for October and November to help control residuals.
  • 100% of the herd is wintered off which helps avoid pasture damage through the winter on the low lying wet soils. In calf heifers go to eternal grazing from May till the start of calving. The mixed age cows are grazed at the support block form June 1 for about 5 weeks.  About 200 of the later calving cows are left at the support block until late July/early August.
  • The focus is on maximising grass grown and maximising the utilisation of that grass. Achieving 1,500 kg DM/ha post grazing residuals is key to the overall pasture management plan during the milking season.
  • Pasture cover is monitored regularly, (with plate meter or eye assessment), and reviewed with owners fortnightly. Supplement use is based on pasture cover and growth rate information.
  • Drying off decisions are made to ensure early winter cow condition and pasture cover targets are met.  Key targets are body condition score 5 and 2,400 kgDM/ha pasture cover at the start of calving, (July 15).


  • Milking platform
    The farm is low lying and gets very wet in the winter. Effort is made to minimise mud on the milking area. If conditions get very wet, mob sizes will be reduce and back fencing will be used. Cows are stood off on average about 7-10 days from calving until spring. Maintaining pasture quality is vital and preferably is able to be done with animals rather than machines. Yearlings may come back to the milking platform to help with pasture control. On average about 10 ha is harvested each year for silage.
  • Supplements
    Baleage, hay and PKE may be fed in the spring to maintain post grazing residuals and to reduce pasture damage if soil condition's are too wet. However most supplement is used in the late summer and autumn. The budget has allocation to purchase about 100 t of PKE, (150 kg DM/cow) and make 40-50 ha of silage/baleage and hay. PKE is fed out in troughs on the race to avoid pasture damage.
  • Pasture renovation and weed control
    Pasture renovation is a regular part of the farming plan, mainly to repair any damage done in the spring and from mobbing in the summer heat. Any paddocks that are under performing will be re-grassed as well, so the area renovated each year can vary.
    Weed control is high priority so that every bit of land is available for grass to grow.
  • Support block
    There is 53 ha of support block. This provides about 40-50 ha of silage and baleage, (about 100-125 t DM), grazing for weaners from November to May, winter grazing for 80-100% of the herd for 6 weeks and grazing for yearlings from July to May. Some supplement from the support block can be brought back to the milking platform if needed.


  • AB is done for 5 weeks. No pre-mating heats are done but extra time and effort are put into the 5 weeks of AB. Four bulls per herd are used after AB and are rotated every 3-4 days, 2 on 2 off.  4 bulls are run with the heifers for 5 weeks and then 2 are returned for use with the milking herd after AB. The length of mating is 12 weeks.
  • Since 2019 the breeding policy is to selectively mate A2 cows to A2 semen. For the 2032 season premier sires will be used as most of the bulls in premier sires are A2 now. Some Hereford semen will be used on about 100 of the lower BW cows.
  • Herd testing for 2023-24 will be 3 times for the year, (2 milkings).
  • Pregnancy testing is done via milk sampling to minimise impact on the cows.
  • The SCC for the herd is between 150,000 and 160,000 and has reduced from previous years with more attention being paid to controlling mastitis and correctly treating high somatic cell count cows.
  • Dry cow therapy is based on best practice recommendations with cows over 150,000 SCC being treated with long acting antibiotic.  The rest of the herd is teat sealed only.
  • Calves are reared on colostrum, whole milk and meal.  Effort is made to ensure all calves receive gold colostrum in the first few hours after birth. This ensures more healthy calves which are easier to rear.

People, health and safety

  • Labour consists of 2 herd managers (one for each farm) and 1 additional staff member employed to provide relief milking, tractor work and any other support needed for both farms.
  • The farm owners contribute 0.3 FTE of unpaid input. This time covers administration, strategic planning and governance as well as milking for herd testing, tail painting and staff sick leave and holidays.
  • Effort is made to ensure the the working environment is enjoyable and a good work/life balance is achieved.
  • Training opportunities with external providers such as vets or industry specialists are provided to staff to ensure skills sets stay current.
  • Remuneration recognises experience and responsibility.
  • The HazardCo system has been used to ensure manuals with processes that meet OSH industry standards are on farm and implemented.


  • Policy
    Apply best practice animal husbandry and land management to ensure excellent profitability without compromising the environment
  • Nitrogen
    Nitrogen use is about 80 units of N per hectare. Purchased N surplus for the farm is very close to zero.
  • Soil testing and fertiliser
    Soil tests are done each year on different paddocks. Olsen P levels are 34 and pH is 6.1. Fertiliser applications are based on soil tests and recommendations that are considered optimum for the soil types. The soils on the farm are 55% Paroa_ 2a.1 Loam, (a poorly drained Gley soil) and 45% Awakaponga_3a.1 (an imperfectly drained recent soil).
  • Effluent
    Effluent can be applied to 46 ha, (25% of the farm), via traveling spray irrigators.The effluent systems have been upgraded in the last 3 years and are now fully lined with stirrers installed. A new effluent pond was added in the 21-22 season so storage capacity is now 90 days.  Best practice is followed to ensure effluent is not sprayed near drains or canals.

Budget revision following milk payout drop


We have been farming for several decades, so financially, we are in a better place than many to “weather this storm”. This season has gotten off to a better start than last season so our focus is to capitalise on that good start and concentrate on converting grass to milk.
Our experience from previous downturns means that we will still be reviewing all financial and farming decisions to eliminate any waste and to optimise efficiency. The key things we will focus on are:

  • Knowing our numbers, both financial and physical, so decisions are based on facts
  • Managing our business "treasury i.e. overdraft facility, flexi debt arrangements, timing of bill payments etc, to minimise interest paid
  • Using actual/estimates for provisional tax assessments
  • Spending to make sure we are back to a no-frills budget.

What advice would you give to farmers who are either first time sharemilking or farm owners?

For those in their first year of sharemilking or farm ownership it will be really tough. You can farm your way through this by following best practice in everything you do.

  • Do your budgets and cashflow forecasts and keep them current. If you are not sure ask for help.
  • Communicate regularly with your banker.
  • Follow the spring rotation planner and keep doing feed budgets. Efficiently using feed is more important than ever.
  • Be strategic with spending. For example, do soil tests if you haven’t already, and be very strategic with fertiliser and nitrogen. Keep away from gateways, water trough areas or any “camp sites” when putting fertiliser on.
  • Make sure that any overdraft facility is just enough for your needs and not more. Interest rates for overdraft can be affected by the size of the limit.
  • If you have some of your debt and overdraft on the one account that all income is paid into, make sure you manage your money efficiently to maximise the amount of time the balance is at a lower level. For example, make sure when paying bills you do it individually, not as batches. Don’t set up payments for everything on the 20th of the month, if your rates are due on the 25th set up a bill payment for that date. Having funds in your account for 5 more days saves interest!
  • There are farmers out there that have been in the same position, so try to connect with them for moral support.

What words of positivity would you give to farmers planning for the coming months ahead?

There are many smaller things you can do to make a difference to your cashflow.

  • Cut R and M to only essentials
  • Review insurance to make sure you are not over-insured. For instance, don’t individually insure assets that are worth less than $5000, put them all under one heading. Take time to get quotes from more than one provider.
  • Do a "deep dive" into a couple of expense categories every month or so to make sure you are getting the best value. We have saved $60/month by tidying up our communication and telephone subscriptions.
  • If you are not locked into an electricity provider, get quotes from other providers.
  • If you rear beef calves don't record them on MINDA, or at the very least, make sure they are recorded as non-dairy. Non-dairy animals incur a lower industry levy than dairy when they are sold.

Do you have any tips and tricks for looking after your people on farm?

Make sure you continue to let your staff know they are valued members of your team. There are many ways to do this that don't necessarily need to cost much money.

  • An extra couple of hours off here and there
  • Team lunch or dinner
  • Supermarket vouchers

Staff are a very important part of our business. To make sure they know we value them as much as in previous years we have given pay rises to match inflation.

2023-24 Forecast budget

Budget last updated June 2023

Net Milk Sales
Milk production for the season is budgeted at 203,500 kg MS which is the 3 year average for the farm. Budgeted income is based on an advance milk price total of $6.25/kg MS and a deferred milk price of $1.40/kg MS on 191,600 kg MS. This is net of the DairyNZ, (3.6 c/kg MS total). A dividend of $.30 /share on 240,000 shares is included in the budget.*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 DairyNZs milk price forecast.
1,604,800 7.89 2,767 10,030
Net Dairy Livestock Sales
This is based on selling 120 surplus/cull MA cows or R 2 heifers @ $500, 50 weaner beef animals @ $500 and approximately 380 bobbies @ $30.
96,000 0.47 166 600
NET DAIRY CASH INCOME 1,700,800 8.36 2,932 10,630
Wages (incl. ACC)
Covers 2 full time herd managers - one for each farm. Provided with a 3 bedroom house each, each herd manager is on a 2 week roster, with 1 day off the first week and 2 days off the second week, plus all statutory holidays and 4 weeks a year annual leave. An additional full time staff member is employed and shared between both farms to provide relief milking, tractor work and any other support needed. They work 5 days on, 2 days off.
225,000 1.11 388 1,406
Animal health
This covers minerals via trough treatment, lepto vaccinations, annual blood tests, calf dehorning (with anesthetic), young stock drenches. BVD status is monitored through bulk milk sampling. Cows with low SCC are treated with teat seal at drying off and those with high SCC, (over 150,000), are treated with dry cow therapy. Pregnancy testing via milk sampling is included here.
57,000 0.28 98 356
Breeding and herd improvement
Includes cost of tail paint, 5 weeks of AB and 3 herd tests per year, (across 2 milkings). There is no reproductive intervention, (anoestrus treatments or metricheck). The breeding policy now is to use premiere sires for most of the herd with some lower BW cows, (about 100), being mated to Hereford semen. The cost includes leasing 12 bulls, (4 for the heifers and 8 for the herd). Mating 2022-23 the herd went on to once a day milking for 2 weeks prior to mating, due to wet soil conditions, poor pasture utilisation and the stress it put the cows under. The not in calf rate was 9% for the season.
42,500 0.21 73 266
Farm dairy
Follow recommended milk plant hygiene programme. Use the cheapest priced detergents. This covers two 20 a-side herringbone sheds.
19,000 0.09 33 119
Electricity (farm dairy, water supply)
Power is for two 20 a-side herringbone sheds.
19,500 0.10 34 122
Supplements made (incl. Contractors)
Between 40-50 ha of supplement is usually harvested each year. The majority is on the support blocks with the budget based on all baleage to be made. Cost covers contractors baling and wrapping plus incidentals. Budget is based on 550-600 bales, (180 kg DM), @ $50/bale.
29,000 0.14 50 181
Supplements purchased
Have contracted 100 t PKE @ $330 per t landed. Equates to about 150-160 kg DM per cow. Mainly for summer and autumn use.
34,000 0.17 59 213
Calf rearing
Plan to rear about 130 replacement heifers and 50 white face beef calves which will be sold to the beef block as weaners. Includes 7-8 t calf meal and $2000 for bedding and equipment.
10,800 0.05 19 68
Young and drystock grazing
All yearlings are grazed on the support blocks from July until early May, but may return to the milking platform in the late spring early summer to help control surplus feed. Calves go to the support block at 2 weeks old and finished being reared there. They are wintered on the milking area as yearlings from June 1 and return to the support block in July when the cows come home.
8,000 0.04 14 50
Winter grazing
The $8000 cost is for off farm grazing for 17 carry over cows. All yearlings are grazed on the support blocks from July until early May, but may return to the milking platform in the late spring early summer to help control surplus feed. Calves go to the support block at 2 weeks old and finished being reared there. They are wintered on the milking area as yearlings from June 1 and return to the support block in July when the cows come home.
62,000 0.30 107 388
Fertiliser (incl. N)
This is net of fertiliser rebates. Includes 75-80 kg N per ha for the milking area. One application of Phased N (20-30 kg N/ha) is used in the early spring to follow the herd. The non effluent area of 124 ha gets another application, (approx 25 kg N per ha), in the spring and one in the autumn. Milking area non effluent block gets 340 kg per ha spring and autumn of fertiliser mix as per Balance recommendations, (contains biophos, MoP and DAP). Support block gets spring and autumn fertiliser including N. Due to the wet autumn and lower pasture cover in early June one round of nitrogen,(30kgN/ha), is being applied to the effluent areas in June. These areas usually do not get any N applied. This should not alter the total amount of N applied for the year as it is likely less may be applied later in the season.
65,000 0.32 112 406
Regrassing & cropping
Pasture renovation is a regular part of the farming plan, mainly to repair any damage done in the spring and from mobbing in the summer heat. Any paddocks that are under performing will be regrassed as well, so the area renovated each year can vary. Undersowing is done by farm owner. Seed used is what ever is the recommended rye/white clover mix at the time. No cropping is done as soils are too wet. This cost is budgeted to be higher than usual this season as soil conditions going into the winter are much wetter than normal.
10,200 0.05 18 64
Weed and pest
Attention is given to keeping the farm weed free so as much area as possible is available for grass to grow. Covers annual weed spray to control docks, buttercup and thistles on both the milking area and the support block.
2,300 0.01 4 14
Vehicles & fuel
Have 2 tractors between the 2 farms and 2 two wheel motorbikes. No 4 wheelers used.
43,000 0.21 74 269
R&M (land, buildings, plant, machinery)
Policy is to keep up to date with R & M so that in low payout years spending can be cut to a minimum. Having herringbone sheds means very little R and M needed on milking shed and plant. Have own mower and undersower but very little other machinery. This budget includes $6,000 for plant R and M, and $12,000 for cowshed plant.
61,500 0.30 106 384
Freight and general farm expenses
Protective clothing, health and safety costs and bio security levy are included here.
6,700 0.03 12 42
Do all own administration, budgets, and payroll. Use accountants for tax advice.
10,500 0.05 18 66
Keep insurance cover to a minimum. Do not have business interruption cover.
18,000 0.09 31 113
ACC 1,500 0.01 3 9
A large portion of rates is paid to Environment BoP for flood protection. Rates now include extra rates to cover repairs and improvements to flood control in the region after the 2017 floods.
90,000 0.44 155 563
TOTAL FARM WORKING EXPENSES 815,500 4.01 1,406 5,097
CASH OPERATING SURPLUS 885,300 4.35 1,526 5,533

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.

Value of change in dairy livestock
Closing livestock numbers will be similar to opening.
-500 0.00 -1 -3
Labour adjustment
Covers owners unpaid input of 0.3 FTE. The owners no longer relief milk but do milk when staff are on holiday, for herd testing, tail painting and to cover sick leave. This labour adjustment also covers all administration, strategic planning and governance.
30,000 0.15 52 188
Feed inventory adjustment
Expect to have 20 t DM more on hand at the end of the season as less than usual was carried into the 2023 winter.
5,000 0.02 9 31
Owned support block adjustment
53 ha of owned support land valued at a market rental equivalent of $750 per ha per year.
39,750 0.20 69 248
Based on 2021-22 actuals, and adjusted to allow for additions/sales to fixed assets in 2022-23. There are no significant farm asset purchases planned for 20-23. Farm has a low cost infrastructure and minimal machinery.
40,000 0.20 69 250
DAIRY GROSS FARM REVENUE 1,700,300 8.36 2,932 10,627
DAIRY OPERATING EXPENSES 920,250 4.52 1,587 5,752
DAIRY OPERATING PROFIT 780,050 3.83 1,345 4,875

Previous season reviews

2021-22 season review

Financial KPI's* Budget Actual
Milk Production (kgMS/ha) 1,500 1,384
Milk Production (kgMS/cow) 414 395
Net Dairy Cash Income ($/kgMS) $7.74 $8.95
Total Farm Working Expenses ($/kgMS) $2.62 $4.04
Cash Operating Surplus/Deficit ($/kgMS) $5.12 $4.91
Gross Farm Revenue ($/kgMS) $7.74 $9.01
Operating Expenses ($/kgMS) $3.17 $4.50
Operating Profit ($/ha) $6,865 $6,248

*These KPI's are based on cash book actuals to 31 May 2021 and estimated non-cash adjustments. The final financial performance based on financial statements may differ.

Click here for PDF of 2021-22 budget v actuals


  • The estimated operating profit for this season is $6,250/ha which is slightly down on the budget of $6,800.
  • Pasture harvested for the season was 16.7 t DM which is the third lowest since the 2017 floods, and 9% down on 2020-21 season. This contributed to milk production being more than 7% down on budget.
  • The decrease in milksolids was offset by a 16% increase in milk price received, ($8.47/kgMS compared with the budget of $7.28/kgMS).
  • Farm working expenses were up 41%. A combination of increased prices, (fertiliser, fuel, contractors, feed), changing labour, increased animal health spending and increased discretionary R & M spending.
  • Despite considerable variation in actual spending compared with budget the cash operating surplus for the year of $4.91/kgMS was only 11% lower than budget because of the higher payout.
  • As per the farm strategic plan, significant debt retirement was again undertaken. A new effluent storage facility was also funded out of cashflow.The estimated operating profit for this season is $6,421/ha which is the second-highest recorded for the farm.

Other points of interest

  • 560 cows were milked at the peak of the season which was 20 less than budget due to a high number of late empties.
  • Pasture growth and utilisation were about average for the spring and early summer, but significantly down on the 2020-21 season.
  • Supplements made on the milking area were less than the previous season, despite having less peak cows milked. The only supplementation used was during the spring which was hay to transition springers.
  • Summer and autumn had variable rainfall and 86 t PKE was fed from January till May. This was about 10 t more than budget, but the price was $30/t higher than budgeted so total spend was up on budget.
  • Total N use for the season was 80 kgN/ha which was on budget.
  • The herd was dried off on May 10th. They are on track to be at target body condition score of 4.9 and pasture cover will 2,500 kgDM/ha by the planned start of calving.
  • The six week in calf rate is 67% which is similar to the 2020-21 mating results of 66%.
  • Somatic cell counts for the season is 153,000 which is similar to the previous season.
  • A last minute change in staff on one of the farms in July was an added challenge to the spring. More input was needed to help the new employee become familiar with the farm and standard operating procedures. They have settled in well but the process certainly tested the farms documented operational systems.
  • Better observation of stock, particularly over the calving and spring period, has resulted in lower herd wastage with 9 fewer deaths.
  • Animal health costs were 78% up on budget. A wetter spring contributed to more animal health challenges in the spring, including increased lameness. Money was invested in Vet run staff training sessions on mastitis detection and prevention, and lameness management.
  • The costs of drugs and minerals were up on budget – in part due to price rises and in part due to the increased identification of issues.
  • In the spring there were several instances of hemorrhagic fractures in first calvers - a consequence of prolonged zinc supplementation causing a copper deficiency. This resulted in the loss of these animals and required copper supplementation to correct this deficiency in the rest of this age group.
  • The improved payout and better cash flow have allowed for increased discretionary spending on tracks, (to address lameness issues from the spring), and buildings. R & M costs are up about 50% on budget as a result.
  • The upgraded effluent storage means the farm now has 90 days of effluent storage.

2019-20 Season review

Financial KPI's* Budget Actual
Milk Production (kgMS/ha) 1,344 1,423
Milk Production (kgMS/cow) 373 406
Net Dairy Cash Income ($/kgMS) $6.22 $6.89
Total Farm Working Expenses ($/kgMS) $2.38 $2.67
Cash Operating Surplus/Deficit ($/kgMS) $3.84 $4.22
Gross Farm Revenue ($/kgMS) $6.22 $7.15
Operating Expenses ($/kgMS) $2.91 $3.17
Operating Profit ($/ha) $4,452 $5,676

*These KPI's are based on cash book actuals to 31 May 2020 and estimated non-cash adjustments. The final financial performance based on financial statements may differ.

Click here for PDF of 2018-2019 budget v actuals


  • The 2019-20 season saw pasture species, quality and growth rates for the farm finally returning to similar pre 2017 flood levels.
  • Production was up 6% on budget, (12,600 kg MS), despite a drier than usual summer and early autumn.
  • The operating profit estimated for the season is $5,676 per ha which is nearly 30% up on budget. The main reason for the variance is the higher milksolids produced and a milk price received of $6.88 which was $1.11 higher than budget.
  • Farm working expenses for the season were $2.67 per kg MS was 13% up on budget and operating expenses finished at $3.17 per kg MS. Many of the cost categories were up on budget the largest variances were form higher wages, animal health, herd improvement and feed and winter grazing.
  • A good winter and spring saw the season get off to a great start. The milking platform was not impacted too much from the drier than average late summer and autumn as it is very low lying and has a relatively high water table.
  • The majority of culls went about 1 month earlier than usual from mid-March and an additional 30 t PKE was fed to the milking herd during the autumn. The herd was dried off on May 8th.
  • Nitrogen applied for the season was on budget at about 70 kg N per ha.
  • Target pasture cover of 2,500 kg DM per ha and cow body condition score of 4.9 was met by planned start of calving.

Other points of interest

  • As a result of a review of the herd genetic merit early in the season a line of 89 high BW weaners were purchased and an additional 50 R 2 heifers were purchased in the autumn.  The extra stock on hand had an impact on animal health, feed and winter grazing costs.
  • Peak cow numbers were 16 less than budget as there were more empty cows in the spring than expected as no pregnancy testing had been done the previous summer.  Pregnancy testing was done in early 2020 so this added to the animal health costs.
  • Breeding and herd testing costs were up as bulls were leased instead of purchased. More selective mating of A 2 cows to A 2 bulls was also done as part of a plan to move to a completely A 2 herd, plus the price of semen was $3-4 per straw higher than the original budget which was done in April 2019.
  • Winter grazing costs were up as more R 2 heifers were grazed off and the grazing prices were higher than budgeted.
  • Dock are becoming a significant problem on the support blocks so a weed control programme for docks has been added to the farm plan - this costs about $6,000 per year.
  • 2019-20 was not a good year for vehicles with a $12,000 repair bill for one tractor pushing vehicle costs over budget

Feed situation May 2020

Feed situation

  • Dry off date: 08/05/20
  • Culls on hand: 13
  • % Milking area regrassed: Nil. 5 ha done on support block due to effects of the drought
  • N applied this autumn to date: 30 kg N per ha over the whole farm applied with autumn fertiliser
Current situation Target for 31/5/2020 Target for PSC
Stocking Rate Equates to 3.7 445 MA Cows 55 R2 Heifers 180 R1 Heifers On milking platform Equates to 3.6 Cows/heifers to support block June 1 180 yearlings wintered on milking area Equates to 1.25 180 yearlings to support block and 200 cows home 10/7/20 at rate of  about 200 per week
Body Condition Score 4.5 4.6 4.8-4.9
APC kg DM/ha 2100 2000 2500
Growth rates kg DM/ha/day 40 30 25-30
Supplements on hand 320kg DM/cow equivalent on hand 50 bales hay 50 bales baleage + two stacks at the runoff (170t pit silage) 180 bales of baleage at runoff 296kg DM/cow equivalent 50 bales hay on home farm two stacks at the runoff (170t pit silage) + 150 bales of baleage at runoff 159kg DM/cow equivalent 50 bales hay 80t silage 120 bales of baleage

Actions taken to address the feed shortage

  • Started feeding contracted PKE a month early, then continued with baleage made on farm. Fortunately the good spring and early summer meant there was more supplement on hand than usual.
  • Culls went from mid-March to mid-April, about 4-5 weeks earlier than usual. The stock agent advised that COVID-19 could affect freezing works space and advised to do this.
  • Put on autumn fertiliser, (which includes Sulphate of ammonia at 25-30kg N/ha), as soon as possible after more regular rainfall started. Applied once a week behind the cows.
  • Spread nitrogen on support block, don’t usually do this.
  • Dried cows off 8/5/2020.

Plans to achieve target APC and BCS and PSC targets

  • Cull remaining 13 cows – hopefully in next couple of weeks.
  • Segregate mobs for preferential feeding of lighter cows to improve their BCS.
  • Continue to feed baleage to maintain a slow rotation and still feed cows well enough that BCS targets are met.
  • At current stocking rates, the present growth rates of 40kg DM/ha/day plus 9t DM of baleage will allow for the planned feeding levels and still achieve the target pasture cover at end of May.
  • Continue to monitor pasture growth rates to ensure they are on target.

Concerns and plans for the upcoming weeks

  • Pasture covers on the support blocks are lower than target. Having enough feed for the winter is still a concern. We have enough supplement, but if it is wet we will damage the support block pastures. We will stand cows off and on, but it still pugs the pasture.
  • Have advertised to see if there are any grazing blocks available locally.
  • Have spoken to a couple of kiwifruit conversion blocks to see if they need non planted paddocks grazed, just keeping our ear to the ground for options.
  • If growth rates on the milking area are below budget more supplement could be fed if needed so pasture cover doesn’t go below 2000kg DM per ha.

2018-19 season review

Financial KPI's* Budget Actual
Milk Production (kgMS/ha) 1,344 1,352
Milk Production (kgMS/cow) 373 382
Net Dairy Cash Income ($/kgMS) $6.76 $6.73
Total Farm Working Expenses ($/kgMS) $2.52 $2.51
Cash Operating Surplus/Deficit ($/kgMS) $4.25 $4.22
Gross Farm Revenue ($/kgMS) $6.99 $6.58
Operating Expenses ($/kgMS) $3.09 $3.12
Operating Profit ($/ha) $5,247 $4,677

*These KPI's are based on cash book actuals to 31 May 2019 and estimated non-cash adjustments. The final financial performance based on financial statements may differ.

Click here for PDF of 2018-2019 budget v actuals


  • Financially and physically this season has been a lot more like the average for the farm prior to the floods of autumn 2017.
  • Milksolids per ha of 1,352 is 100 kg per ha higher than the previous 2 flood affected seasons.
  • The seasons operating profit based on the cashbook analysis of $4,677 per ha, is $11% below budget, but still well above the DairyNZ estimated average for the region for 2018-19 of $1,287 and the previous 2 years average for the farm of $3,500 per ha.
  • Operating expenses for the year were slightly up on budget, ($3.12 per kg MS compared with the budget of $3.09).  Farm working expenses were very close to budget, ($2.51 per kg MS actual compared with the budget of $2.52). The feed inventory adjustment and depreciation were up for the season, but this was offset by less owner labour than budgeted.
  • While production for the season was close to budget, (up 0.6 %), gross farm revenue was down due to both the milk price received, ($6.35 per kg MS), and total livestock revenue - cash and non-cash, ($0.25 per kg MS), being below budget.

Other points of interest

  • 2018 was another wet spring with cows being stood off for 11 days compared with the usual 2 or 3. Production to the end of December was 13% up on the previous season with no imported supplement fed at this point.
  • Pasture & crop harvested for the season was 17.0 t DM per ha, up 8% on the previous season and more in line with the levels pre 2017 floods, (3 year average pre 2016-17 was 18.5 t DM per ha).
  • The dry summer and autumn meant that 84 t PKE was fed, this being 28 t less than budget but at a higher price per t so total imported feed costs were only slightly below budget.
  • Good late spring/early summer pasture growth rates resulted in 15 more ha, (up 25% on budget), of supplement being harvested, with higher yields compared with previous years.
  • Supplement on hand at the end of the season was down 43.1 t DM as more was fed out in the late autumn to increase pasture cover due to lower than budgeted pasture growth rates.
  • Nitrogen use for the season was 73 kg N per ha which was slightly below the budgeted 80 kg N per ha.  Less N was used in the autumn in part due to the weather and soil conditions not being suitable for N applications.
  • This season R & M costs were below budget for a change, probably in part due to higher R & M spending over the previous two seasons as a consequence of remedying the impact of the 2017 autumn flooding.

2017-18 season review

Financial KPI's* Budget Actual
Milk Production (kgMS/ha) 1,406 1,250
Milk Production (kgMS/cow) 391 347
Net Dairy Cash Income ($/kgMS) $6.20 $6.89
Total Farm Working Expenses ($/kgMS) $2.45 $2.64
Cash Operating Surplus/Deficit ($/kgMS) $3.75 $4.25
Gross Farm Revenue ($/kgMS) $5.73 $6.18
Operating Expenses ($/kgMS) $2.97 $3.23
Operating Profit ($/ha) $3,873 $3,686

These KPI's are based on cash book actuals to the 31/5/2018 and estimated non-cash adjustments. The final financial performance based on financial statements may differ.


  • The very wet spring, on top of the floods in autumn 2017 had a big impact on early season production which was 8-9% behind budget by mid-December. Despite good summer/autumn rainfall this loss was never regained, largely due to the very hot conditions affecting the cows, and also resulting in a proliferation of poorer quality summer grasses.
  • Much of the variation from budget for the 17-18 season relates to the poor spring weather or the carry over effects of the 2017 autumn floods.
  • The budgeted milk price was $0.69 lower than the actual received of $6.52 which meant that despite production being 115 below budget total income was only $17,000 below budget.
  • Total farm working expenses for the season were $22,000 below budget, although with the much lower milksolids produced, FWE per kg MS of $2.64 was $0.19 above budget. The main reason for total costs being below budget was a significant relief on rates due to the autumn 2017 flooding.
  • Operating profit for the year is estimated to be $3,686 per ha which is very similar to the budget forecast, and the flood affected 2016-17 season. This is well down on the farms best financial performances in 13-14 and 14-15, so the impact of the severe weather events of the last 18 months has been significant.

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Last updated: Aug 2023
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