Budgeting, Lower Northland (Don and Kirsten Watson)


13 min read

Farm facts Numbers at a glance Management decisions 2023-24 forecast budget Additional resources

Don and Kirsten Watson farm one hour north west of Auckland on the South Kaipara Head peninsula. The 112 ha effective milking platform is supported by a 150 ha leased block. They aim to maximise profit by improving pasture grown and using a split calving system to better utilise the increased feed grown. They anticipate a 7.5% increase in production this season, focusing on better autumn cow feeding and improved quality of silage. All non-replacement calves are reared and sold as dairy beef or herd bulls which contributes to livestock income of over $1,500/ha. Their management vision is centered on rapid equity growth to achieve financial independence and personal fulfillment. Sound financial management ensures cash flow is managed efficiently and financial decisions are made proactively.

Don and Kirsten Watson are in their 7th season of farm ownership on this farm on the southern peninsula of the Kaipara harbour, about one hour North West of Auckland.

Their focus is to continue to maximise profit by increasing pasture grown and harvested through an ongoing pasture renewal programme, good management of existing Kikuyu and using a split calving system to better match pasture supply and demand.

Production is budgeted to be up 7.5% on last season as there is more focus on feeding the autumn cows better and making earlier and better quality silage.
To maximise the use of the extensive lease block the majority of all non-replacement calves are reared and sold as dairy beef or herd bulls. This contributes to a stock income for the farm over $1,500/ha, ($1.25/kg MS).

Don and Kirsten Watson.

Farm Facts

Business type: 



South Kaipara Head, Helensville, North West Auckland

Farm size: 

112 ha effective milking platform

Farm size (for dry stock and dairy beef):

supported by 150 ha lease block

Peak cows: 

290 JX split calving


28/7/2022 spring, 15/3/2023 Autumn, (heifers 7 days earlier)

Stocking rate: 

2.6 cows/ha

Farm system: 

4 (20-30% feed imported)


140,000 kg MS/year budgeted, 1,250kg MS/ha, 483 kg MS/cow

Production (last 2 years):

122,300 kg MS average

Numbers at a glance

Financial KPI 2023-2024 budget
Net dairy cash
income ($/kgMS)
Total farm working 
expenses ($/kgMS)
Total operating
expenses ($/kgMS)
Dairy operating profit ($/ha)
$10.42 $5.65 $6.97 $4,321
Physical KPI 2022-23 est
Pasture and crop
harvested (DM/ha)
Purchased N
surplus (kg N/ha/yr)
Six week
in-calf rate (%)
12 127 10.3 NA

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

Management decisions

Strategy and financial

  • Vision
    Rapid equity growth in agribusiness, to achieve financial independence, and personal fulfilment.
    Undertake farm development through continued improvement of farm infrastructure and pasture grown. Operate a farm system that drives efficient feed utilisation to ensure a profitable farm business.
  • Values
    Value dedicated work ethic, professional integrity, and high standards.
  • Budgeting
    Regularly review budgets and finances to ensure cash flow is managed efficiently and financial decisions can be made proactively.
  • Planning
    Have a business and farm plan for the short and long term which outlines goals, measures and actions. Review and update this plan at least annually. This covers targets for financial goals, use of resources, improving capability, high quality livestock performance and personal goals. 
  • Debt
    Have a plan for staged debt reduction. This has been delayed due to higher than expected required capital expenditure for effluent irrigation installation and farm development.
  • Risk
    Implement strategies to limit exposure to risk from the factors that are outside of the business’s control such as interest rates, milk price and weather. E.g. actively managing fixing interest rates, utilise fixed milk price options if required, forward plan feed requirements so prices can be fixed at favourable rates
  • Networking
    Take the opportunity to network with top farmers and industry experts to learn more.
  • Environment 
    Develop and monitor the farm system so that all environmental KPI’s continue to improve and industry best practice is achieved.

Farm policy and infrastructure

  • The farm operates a production system 4, with imported feed a mix of maize silage, kibbled maize, baleage and silage provided from the adjacent support block and  PKE30 molasses imported from feed merchants.
  • The area is subject to significant climatic variations and it is typically summer dry and winter wet. Having good buffers of feed on hand is an important part of the annual farm plan.
  • Focus is on feeding the herd well and using high metabolisable energy, (ME), feeds to get better use of the current lower ME, Kikuyu dominant pasture. This should also contribute to achieving close to an average of 300 day lactation's for the herd.
  • Feed budgeting is used ensure livestock are fed well while optimising pasture utilisation, maintaining pasture quality, (particularly in Kikuyu dominant pastures), and ensuring efficient use of supplements.
  • Have a continual pasture renewal policy to improve pasture species and reduce the reliance on imported feed. The farm has already dropped from a production system 5, (< 30 % imported feed), to a system 4, (21-30% imported feed) in the past 6 years due to improved pasture species and better management of Kikuyu.
  • The farm is consented for 320 cows but aims to peak milk 290 though a 32 bail rotary shed. The cows are run as one herd, which simplifies management and reduces pasture damage in wet conditions.
  • A feed pad adjoins the dairy shed. This can hold 300 cows but it is a tight squeeze.  It is more comfortable with about 270-280.
  • Supplements are fed all year on the feed pad, usually prior to the morning milking. Supplementary feeding levels can be as high as 12kgDM/cow/day in April and May and as low as 0.5-1.0 kgDM/cow/day in the late spring.
  • The herd is split calving with 130-135 cows calving in the autumn and 170-175 calving in the spring.
  • The farm has good infrastructure with 48 paddocks, races in good order and good water supply to all paddocks. There are 2 water troughs in each paddock as the paddocks tend to be long and narrow. All drains are fenced.
  • Significant work has been done in the last 6 years to improve the drainage on the marine clay flats. The benefit of this was seen in the aftermath of cyclone Gabriel. The water drained away quickly and the paddocks stood up well to the wet weather.
  • It is 1.5 km from the farm dairy shed to the furthest paddock and the farm is of a flat to easy contour.
  • The support block backs on to forestry and is impacted by incursions of wild deer. About 30 ha of the area is deer fenced and further work is under way to exclude deer from the better pasture.
  • All cows and in-calf heifers are wintered off the milking area on the support block across the road. Young stock are grazed off farm from weaning, although they can sometimes be moved to the support block prior to weaning if pasture cover is low on the milking area.
  • The majority of non-replacement calves born are reared for sale as dairy beef or herd bulls.The aim is to have 100% of calves born to be reared on farm or sold for rearing.
  • Empty cows are fattened on the support block and sold in late spring when cull prices are higher.
  • Drying off decisions are made based on cow condition, feed budgets and calving dates, to ensure pre-calving target CS of 5.0 for MA cows and 5.5 for 2 year old heifers are met.


  • Pasture
    To manage the kikuyu dominant pasture, the kikuyu, (about 90 ha), is mulched in the autumn and undersown with a tetraploid hybrid ryegrass.
    The spring rotation planner is used but is adapted to take into account the very wet soils.
    Pasture monitoring and feed budgeting is carried out about every 10 days through August and September, and then weekly from October through to December.
    Once the kikuyu growing season commences the feed management is based on days since last grazed rather than pasture cover as it is very hard to get an accurate measurement of dry matter cover with kikuyu.
    Higher grazing residuals of 1650-1720 kgDM/ha are tolerated for the milking herd through the winter and early spring to avoid pasture damage on the marine clay soils.
    Annuals and the tetraploid hybrid ryegrasses are grazed like normal ryegrass pastures, at the 2 1/2 leaf stage, so plant growth stage largely determines the rotation length.
    New pasture is grazed to 1500-1600 kg DM/ha, (soil conditions permitting).
    Topping is carried out in late spring and early summer if required, to maintain pasture quality. Dry stock can be brought home from the support block to help maintain pasture quality as well.
    The new permanent pastures, (a fescue, red clover and chicory mix), perform well over the summer on a 40-50 day rotation.
    Ten percent of the Kikuyu dominant pastures, (3 paddocks), are mulched each week from January. This practice has resulted in an increase of over 15% in pasture grown in the last 5 years.
    The pasture harvested for 2022-23 is estimated at 12 t DM/ha. The range is 14-15 t DM/ha on the new pastures with the Fescue/Clover/Chicory mix and 10-11.5 t DM/ha on the Kikuyu dominant pastures. The newer pastures are out performing the Kikuyu ones by over 30%.
  • Feed policy
    Supplements are fed once a day on the fed pad to milking cows all year round.  Afternoon supplementation may also be given if weather conditions are particularly bad.
    Supplements fed to milking cows are maize silage, good quality silage and baleage and PKE30 molasses blend. Baleage is fed to dry stock, plus PKE may be used for the young stock over the summer if necessary.
    The predominant Kikuyu pasture base affects the metabolisable energy, (ME), of pasture particularly over mating in late spring and in the autumn. Experience has shown that cows will lose weight at these time on pasture only so supplementation is carried out all year round to ensure that the intake of ME is adequate.
  • Cropping
    The ongoing pasture renewal programme to replace Kikuyu with a rescue, Chicory and white and red Clover mix has about 8-9% of the farm being cropped each year. The ideal process is still a work in progress and the weather and soil conditions each spring have an impact on exactly what is done.
    The cropping programme involves spraying out the Kikuyu in the spring and planting with a chicory and clover mix for summer feed. This is then under sown with annual Ryegrass in the autumn and re-sown Turnips the following spring for the summer, before being planted in permanent pasture. This rotation seems to result in good permanent pasture that persists.  
    Each year about 16-18% of the milking area, (up to about 20 ha), is sown in summer crops.
  • Supplements made
    Supplements are only made on the milking platform if there is surplus pasture. The area harvested depends on just how much cropping is able to be done, and usually about 8 t DM of baleage and 40 t DM of pit silage is made on the milking area.
    On the support block about 8 t DM of higher ME baleage is made for the young stock, plus about 30 t DM of haylage is made for use over the winter.
  • Maize grown
    Maize is grown on the support block each year. For 2023-24 the plan is to plant 16 ha for maize silage using a mix of early and later maturing varieties so harvesting can start late summer. Total yield should be about 350 t DM. This season another 5 ha of grain maize will be grown to produce about 60 t DM of kibbled maize for the farm.  This higher ME feed can be used to help keep weight on the cows in the autumn when the Kikuyu is most dominant.


  • There has been a focus on driving genetic gain for the last 5 years as the herd brought on to the farm was made up of the lower BW cows from the larger sharemilking herd plus the top 100 in calf heifers out of the line of 240. Currently the herd BW is 241/48 and PW is 279/69, with 99% recorded ancestry. This puts the herd in the top 5% for genetic merit in NZ.
  • Herd testing is carried out 4 times a year one milking per test. This information is used to assist mating and culling decisions.
  • Mating is 9 weeks for the autumn herd and 10-11 weeks for the spring herd.
    AB is used for 3 weeks for both herds. The highest genetic merit cows and all the yearlings are mated to AB. For the 2023 season sexed semen will be used again to reduce the number of cows needed to generate enough replacements. 
    The lower genetic merit cows are naturally mated with Angus composite cross bulls, (Angus/Simmental/Gelbvie).
    After AB is finished 2 teams of 2 bulls are run with the herd and 2 bulls are run with the heifers.
  • Beef bulls are bred from own herd using embryo transfers, (transfers done every second year), for a cost of about $1,500 per live bull. The Angus composite cross is used as it is easier calving than many beef breeds, but still provides calves that have good growth rates.
    The Angus composite embryos that yielded calves in the past had birth weights of about 35kg and had reached 550 kg liveweight by the age of 14 months when they were used as herd bulls with the heifers.
  • The replacement rate is 26%, with 45 spring and 35 autumn replacements reared.
  • The animal health focus is on good observation, prevention and early treatment if required.
    Cu and Se are administered through the water during calving and mating using a dosatron system. Liver and blood sample analysis shows that this is sufficient to maintain acceptable levels.
  • Best practice is followed to ensure good udder health and good quality milk is produced. The goal is to maintain a SCC of under 100000.
  • An additional 170-190 calves are reared for sale as dairy beef or herd bulls.
  • Young stock are weighed regularly to check that industry recommended weights are being achieved. If for any reason heifers are under the recommended weights at mating they will be carried over and mated the following season e.g. spring born heifers carried over and mated with the autumn born heifers.
  • In-calf heifers are run with the milking herd for 1 month prior to calving which makes it very easy for them to integrate into the herd post calving.

People, health and safety

  • One full time permanent staff member is employed.
  • The farm meets industry best practice for health, safety and employment protocols. Registers and documents for OSH and onsite inductions are maintained and regularly updated.
  • Being split calving and milking all year round can mean it is a struggle at times to take time away from the farm.
    Once the autumn herd is dried off at the beginning of January, the spring herd is milked once a day. This allows for afternoons off as well as a 7-10 day summer holiday.
    The farm is on the Kaipara harbour and also has easy access through forestry to the west coast beach on the peninsular so there are plenty of fun activities such as fishing, swimming and bike riding nearby.


  • Farm environment plan
    The FEP was completed in 2016/17 as part of the winter milk application. While now out of date it is still useful for helping to prioritise planning to ensure continued progress is made towards achieving the best environmental outcomes for the farm and business.
  • Effluent
    A 3 pond discharge effluent system is consented through to 2025. A concrete pond, 25m by 5m off the end of the feed pad acts as a solids trap. Ponds and solids trap are cleaned twice a year and slurry tankers are used to spread the effluent on pasture or crop areas.
    Infrastructure for irrigation of effluent to 28 ha has just been installed and is now fully operational.
    The short to medium term plan includes replacing the discharge effluent system with a new storage pond and installing rainwater diversions on the yards and feed pad.
  • Riparian planting
    The farm has about 8 ha of QEII bush, hill and sidling and some swamp. A riparian planting plan has been developed as part of the Integrated Kaipara Management group and it is hoped that planting based on this plan can commence autumn 2023.
    Plans are also in place to increase the number of shade trees on the farm.
  • Environmental KPI’s
    Purchased N surplus for 2021-22 was 127 kgN/ha/year and GHG was 10.3 t CO2 equiv/ha/year for the milking area.
  • Nitrogen
    N use for the 2022-23 season was about 75kgN/ha on the milking area. This is 50% down on the previous season and the aim is to reduce the reliance on N even further as pastures improve.
    Nitrogen is applied at about 25 kg N/ha per application over 5 applications from early May through to late October/November on Kikuyu dominant pastures, but rates on new pastures and effluent areas are significantly lower. 
  • Soil Management
    There is a strong focus on careful grazing in wet weather and not causing pasture damage. This also has a positive outcome on reducing soil damage and reducing sediment loss into the Kaipara Harbour which is a major issue affecting water quality in the catchment.
    Using resilient pastures would reduce the frequency of cultivation. However, this is an area the industry needs to address.
  • Soils and testing
    The farm soil type is 15% sandy loam and 85% marine clay. The flats are stop banked and protected by 3 floodgates.
    The soil test results on the sandy loam are Olsen P of 32, pH of 5.9 and potassium of 6. Olsen P is 50, pH is 6.3 and potassium is 14-18 on the marine clay and does not vary much. Requirements for nutrients on this area are low so only nitrogen and lime are applied. Maintenance levels of phosphate and potassium, (45 kg P/ha and 45 kg K/ha) are applied to the sandy loam in 3 applications.
    Fertiliser applied does depend on what is cheapest at the time. Last autumn potassium was applied with DAP as that was the cheapest option. In the spring and early summer a 15% potassium sustaiN mix has been used.
    The sandy loam soils now get effluent irrigated on them so the lower K should improve and less imported potassium will need to be applied.

Budget revision following milk payout drop

August 15th, 2023

We are just over two weeks in to calving with the spring herd and finishing mating with the autumn herd, so things are very busy on farm at present. We haven’t had time to look at our budget in great detail. That said, we have updated the Fonterra milk price and have lost over $100,000 income out of the budget. Our focus is to:

Concentrate on what we can control, such as feed allocation, to ensure spring production is optimised
Reduce spending on lime and R & M, which we are able to do because there has been a high level of expenditure in these areas in the past couple of years
Discuss any on-farm management changes properly with staff and explain why we are having to make changes.

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

Communicate with your banker and maintain a good relationship.

Limit all unnecessary expenses.

Do your best to ride it out, things will improve.

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

"Stick to your knitting", and focus on getting the basics right.

If you have a good equity level and haven’t yet invested, now is a good time to look at your future options, as there could be some good opportunities out there.

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

Maintain a positive workplace despite the bleaker outlook. It doesn’t really affect staff financially, so don’t make your problems theirs.

Strategies for managing a dry summer

October 27th, 2023

How has the season been so far?

  • Production is down 5% on last season and significantly more on budget. The 2023-24 budget had been for a 7.5% increase on last season so overall we are about 12.5% behind budget.
  • The ground has stayed saturated over the past 2-3 months and there has been a lot of cloud cover so pasture growth has been well below average.
  • With the very wet autumn and winter, the stocking rate on the milking area has been reduced. The autumn calving herd numbers are currently 8% lower than last year and budget having been culled down in mid-July.
  • The cow numbers for the spring calving herd are still on budget but 14 cows with high somatic cell counts or that have been identified as definite culls have been kept separate and milked for calves. These cows will be culled as soon as the calves are weaned, so herd numbers will be lower much earlier in the season.
  • Winter and spring pasture management has been different this year compared with the last 5 years due to the very wet soil conditions.
    Cows have been stood off more this winter that in the last 5 years combined.
  • Supplementary feeding through this period has been almost to excess to keep pasture residuals high and avoid pugging.  
  • With higher residuals going in to the spring, the “balance date” was 15th of September. This is earlier than usual, given the lower growth rates, as pasture cover stayed above 200 kg DM/ha.
  • The daily amount of supplements being fed has been reduced a lot since then with the cows now just getting 1.5 kg DM/cow/day of a maize/PKE mix.
  • Nitrogen use has been earlier than usual as pastures were showing signs of nitrogen deficit due to the increased leaching from the high rainfall. To date about 90 kg N/ha have been used so the total for the season is likely to up about 30 kg N/ha. On the lighter soils and the hills sulphur and nitrogen have been applied.
  • To date on the milking platform, 21 t DM of baleage (70 bales at 300 kg DM) have been made, with another 7-8 t DM (25 bales) to be made soon. On the support block there have already been 190 bales of baleage harvested. This adds up to about 80 t DM harvested, the budget was for about 73 t DM of baleage and silage so supplements going into the summer are 10% up on budget.
  • On the milking platform there are 16.5 ha going into summer crops. Planting will be staggered and the crop will be a mix of Barkant turnips and Goliath rape on the drier soils. There are already 2 paddocks up plus 1 paddock of New York turnips, (a later maturing variety), the latter, to provide high energy feed for the autumn calvers. The balance of the summer crops will be 10 of chicory and clover mix or chicory, clover and sorghum.  The latter will be planted in paddocks nearest the harbour where ducks and geese can be a problem – the sorghum, being tall, inhibits grazing by waterfowl.
  • On both the sandy loam and the marine clay soils the crop establishment has been to spray, drill, ground hog and harrow to aerate the soil, then roll or mulch if there is too much trash present. The aim is to avoid power harrowing and promote good soil structure in the marine clay in particular
  • On the support block 12 ha of maize has already been planted and the maize is up. A further 9 ha will be planted but the soils are still a bit wet.
  • The very wet summer and autumn caused flooding on the support block which has meant the 40 ha have effectively been out of rotation for about 8 months.
  • More dry stock were sold in the autumn than normal so that the winter stocking rate was lower than usual. 
  • The 40 ha has now been planted with a mix of red and white clover, sorghum and chicory. This area will be used for the calves over the summer. 

What are cash flow forecasts looking like? How will a drought impact this?

  • The cash flow is not wonderful however the Fonterra dividend and capital dividend plus the winter milk income and the sale of some Fonterra shares has made a big difference.
  • We operate an all in one loan account and because debt repayment has been a focus in the past, cash flow will not be a problem.  
  • The main difference is that there may not be much, if any, debt reduction this financial year.
  • We have been able to defer cropping costs for 6 months which has helped cash flow in the short term.
  • If there is a severe summer drought production and milk income will be reduced further and feed costs and possible regrassing costs could go up. 

Has the NIWA El Nino forecast changed how you are approaching this summer?

  • With the NIWA forecast for a drier summer, we are trialing cropping a paddock, (5 ha),  with forage peas in one of the paddocks sown in annuals. Under good conditions it can yield up to 13 t DM and will be planted mid-November and harvested, (bales or ensiled), in January. The area would then be planted in oats in the autumn. This would also be used for the autumn calving herd.
  • We have had a lot of rain already since January. With El Nino we could get a normal dry summer, but are also expecting the possibility of a dry autumn, so are planning for a larger than normal feed deficit from March-May
  • If need be we can allocate the winter planned conserved forage to milkers in autumn and substitute with PKE for the spring calving herd in winter.

What strategies do you have this season for when a drought comes early, late, or is prolonged?

De-stocking early because of the wet autumn and winter means that we will be going into the summer with a lower stocking rate so should be able to take a higher pasture cover into the summer. 

Comes early

  • Crops have gone in early so will be able to be harvested earlier, which should help delay the effects of an early drought.
  • There is the potential to cull a few more autumn calving cows, and cull some spring calvers earlier than usual once empties are identified.

Comes late

  • A later drought affects the autumn calving herd more and it is important to ensure there is enough feed on hand that will provide sufficient protein for them after calving. The forage pea crop is part of this plan.

Is prolonged

  • The budget already includes a contingency for extra PKE in the event of a dry summer so this will be used in the event of a prolonged drought.
  • Other than that, management will focus on de-stocking as necessary through culling or drying of cows, and ensuring careful allocation of existing feed resources to priority stock.
  • It is essential that next season is not compromised so the autumn calving herd and young stock will be a priority.
  • Pasture management will be focused on ensuring over grazing is avoided as much as possible on all the good new pasture.
  • Adequate supplementation with higher ME feed when grazing the poorer quality Kikuyu through the summer dry will also be critical.
  • Timely regrassing when the drought breaks should help ensure pasture going into the next season is back to full production quickly.

2023-24 Forecast Budget

Budget last updated June 2023

Net Milk Sales
Milk revenue is based on 140,000 kg MS for the 2023-24 season at a milk price of $8.42/kg MS including advance, deferred on 130,600 kg MS and the winter milk premium. The Fonterra dividend is based on $0.57/share on an average of 135,000 shares. *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.
1,267,200 9.05 4,370 11,314
Net Dairy Livestock Sales
Includes 61 cull MA cows and R 2 heifers @ $812/head, 10 autumn 2022 born steers and heifers @ $875, 38 spring 2022 born steers and heifers @ $770/head, 56 2023 autumn born steers, bulls and beef heifers @ $600/head, 80 beef R 1 2023 spring born steers and beef heifers @ $600/head, 4 Angus composite heifers, (ex embryo transfer programme), 2022 born @ $1,800, and 3 MA bulls @ $1,800/head. Net stock income is net of industry levies, yard fees and commissions.
173,900 1.24 600 1,553
Other Dairy Cash Income
Rent for surplus farm house
18,200 0.13 63 163
NET DAIRY CASH INCOME 1,459,300 10.42 5,032 13,029
Wages(incl. ACC)
This covers one full time permanent employee and includes allowance for housing as employee has own house.
69,000 0.49 238 616
Animal health
The animal health focus is on good observation, prevention and early treatment if required. Cu and Se are administered through the water during calving and mating using a dosatron system. Liver and blood sample analysis shows that this is sufficient to maintain acceptable levels. Best practice is followed to ensure good udder health and good quality milk is produced. The goal is to maintain a SCC of under 100000.
40,450 0.29 139 361
Breeding and herd improvement
Mating is 9 weeks for the autumn herd and 10-11 weeks for the spring herd. AB is used for 3 weeks for both herds. The highest genetic merit cows and all the yearlings are mated to AB. For the 2023 season sexed semen will be to reduce the number of cows needed to be mated to generate enough replacements. The lower genetic merit cows are naturally mated with Angus composite cross bulls, (Angus/Simmental/Gelbvie). After AB is finished 2 teams of 2 bulls are run with the herd and 2 bulls are run with the heifers. No Angus composite cross bull embryo transfer will be done this year as there are sufficient bulls on hand. It will be carried out again in the 2024-25 season matings. Herd testing is carried out 4 times a year one milking per test.
28,600 0.20 99 255
Farm dairy
This covers consumables such as detergents, rubberware, filter socks etc.
4,600 0.03 16 41
Electricity(farm dairy, water supply)
The shed is a 32 bail rotary and is operational 365 days per year as the farm is split calving.
20,760 0.15 72 185
Supplements made(incl. Contractors)
This covers supplements made on both the milking area and the support block and the growing and harvesting of maize on the support block. The maize to be grown this year on the support block is estimated to cost $0.25/kg DM including regrassing into permanent pasture. About 16 ha will be planted using a mix of earlier and later maturing varieties to stagger harvesting and to provide some feed earlier in late summer autumn. This should yield 350 t DM of maize silage. Another 5 ha will be planted in a grain variety, and should yield about 60 t DM of grain which will be kibbled. Supplements made are budgeted at 270 bales, (270 kg bales), of baleage at $55/bale and 40 t DM of pasture silage @ $0.20/kgDM.
126,400 0.90 436 1,129
Supplements purchased
The budget is for about 281 t of PKE/30% molasses blend for the year for an average price $438/t DM landed, (inlcudes $50/t freight). 85 t has been purcased for June and July @ $455/t landed, 168 t has been contracted for $407/t landed. Another 56 t at $400/t landed has been added to the budget for contingency in case of a very dry summer. The majority of this will be used for milking cows, though a small amount may be used at the support block for young stock. This product has been chosen to provide a higher energy feed to counter the low ME of the kikuyu in cows diet, particularly in the autumn.
117,850 0.84 406 1,052
Calf rearing
The majority of calves are reared to weaning, including about 80 replacement heifers and 170-190 dairy bulls, beef heifers and steers. This cost includes about 2.0 t calf milk replacer and 9-10 t DM of calf meal, (pellets and kibbled maize). This cost also includes about $2,200 for vet costs and $5,000 for equipment and bedding.
42,700 0.30 147 381
Support block lease
A 150 ha support block is leased across the road from the milking platform. This is made up of about 30 ha that is deer fenced and is in good pasture. This is where the maize is grown. The balance is hilly, poorer pasture and is often invaded by wild deer from the neighbouring forestry block. 40 ha of flat pasture was under water for 3 weeks after cyclone Gabriel. It has been too wet since to regrass so this area is currently under performing.
20,940 0.15 72 187
Fertiliser(incl. N)
Fertiliser applied is as per recommendations based on soil tests. Applications of P and K applied to the sandy loan soils, on the milking area, (15% of the farm area), are reduced this year as this area is now all under effluent irrigation. The marine clay soils have high inherent nutrient levels that do not vary much each year. They have low nutrient requirements so only lime and nitrogen are applied to these soils, (85% of the farm area). Nitrogen applied to the milking area for the year will be about 85-90 kg N/ha. Sources of N are SustaiN and DAP depending on what is cheapest at the time. Cartage is included in this cost. Application is done using own spreader. The budget includes allocation for about 22 t Lime. Also in the budget is allocation for $5,000 for organic fish/seaweed/humates. This is applied to pasture that has newer species of red clover, fescue and chicory, and is tailored to promote clover growth. N use on these areas will be halved to about 40-50 kg N/ha. The budget does allow for more nitrogen to be applied to silage paddocks to boost yields.
72,900 0.52 251 651
Regrassing & cropping
Includes $18,000 for sowing 12 ha of chicory and clover and 8 ha of turnips. The chicory area is sown in annual rye grass for winter feed and resown in turnips the following spring and then sown in permanent pasture in the autumn, (fescue, chicory and white and red clover mix). This means in any one year there are 18-20 ha of the milking area planted in summer crop. The kikuyu dominant pasture, (about 90 ha), is mulched in the autumn and undersown with a tetraploid hybrid ryegrass. Allocation of about $10,000 is for regrassing flood damaged areas of the support block in the spring, (if the soil is dry enough).
28,000 0.20 97 250
Weed and pest
Includes chemicals for general farm weed and pest control, (rats and mice around maize silage), and equipment and supplies for deterrent of birds and deer.
2,200 0.02 8 20
Vehicles & fuel
Fuel budget is about $33,000. This is quite high as supplements are fed out year round. The farm is over 20 km from the nearest service centre which also adds to to fuel costs. The extensive support block also adds to the vehicle running costs.
66,200 0.47 228 591
R&M(land, buildings, plant, machinery)
R and M expenditure has been high for the last 6 years so the plan for this season is to only do minor works like fencing repairs that do not cost too much and can be done in house and with second hand or existing materials on farm. Includes about $18,000 for plant and machinery maintenance, $17,000 for drainage and $5,000 for track repairs.
87,900 0.63 303 785
Freight and general farm expenses
Includes bio-security levy of $2,800, protective clothing and general freight costs.
10,800 0.08 37 96
Do own GST and payroll. Includes accountancy, communication costs, subscriptions and staff costs, (tea/coffee/biscuits etc).
22,450 0.16 77 200
Farm insurance to cover buildings, plant, vehicles, business interruption and lost milk and liability
17,700 0.13 61 158
ACC 4,210 0.03 15 38
As per latest rates notices. Covers the support block as well.
6,700 0.05 23 60
TOTAL FARM WORKING EXPENSES 790,360 5.65 2,725 7,057
CASH OPERATING SURPLUS 668,940 4.78 2,307 5,973

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
Expect to have similar numbers of stock on hand at the end of the season.
0 0.00 0 0
Labour adjustment
The unpaid labour input by the business owners is 1.5 FTE.
120,000 0.86 414 1,071
Feed inventory adjustment
Expect to have no significant change in supplements on hand at the end of the season. Aim to take 230 t DM of maize and 55 t DM of silage into the winter next season again.
0 0.00 0 0
As per the 2021-22 financial statements plus allowance for 2 more years depreciation and some asset purchases and sales.
65,000 0.46 224 580
DAIRY GROSS FARM REVENUE 1,459,300 10.42 5,032 13,029
DAIRY OPERATING EXPENSES 975,360 6.97 3,363 8,709
DAIRY OPERATING PROFIT 483,940 3.46 1,669 4,321

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Last updated: Aug 2023
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