Budgeting, Medium Input System (South Waikato)

A focus on debt repayment in the past nine years has given our business the resilience needed now to cope with this downturn in payout. The latest drop translates into $105,000 being lost from expected income.
We have revised our budgets, and cashflow forecast, using a $5.20/kg MS advance, ($6.75 /kg MS final payout). This has shown that:

• We needed to revise our provisional tax payment schedule, as our first installment, (already paid), should cover the entire seasons liability, which significantly helps the bottom line
• Our cost structure is relatively streamlined, R & M will be cut to absolute essentials, but at this stage there is very little else we will reduce
• We have some reserves, which could be used if need be.

Don't bury your head in the sand! Revise your budgets as soon as there is any change in payout. Just understanding the impact on your bottom line will help you feel in control. You will be able to make better decisions once that is done.

Maintain good communication with your banker and accountant.

Costs at this time of year are largely essential, so don't make any rushed decisions on cutting spending. Focus spending on areas that make money.

Concentrate on getting the basics right; Follow the spring rotation planner and keep doing your feed budgets.

Good communication is key so staff understand what impact the lower payout is having on the farm plan and what the new plan looks like.

• Mission
  To create long term stability and financial security through dairy farming. Aim to maximise profit through simple, sustainable systems.
  Strive to create win/win situations for all involved in the farm business – for ourselves and farm staff.
• Vision
  Have a well-managed farm that can be managed a contract milker with support from the business owners at key times.
• Values
  Family is number one priority.
  Profit is king.
  Sustainability – systems must be environmentally and personally sustainable.
  A very high standard of animal welfare must be maintained.
• Financial management
  Keep a detailed cashflow, updated weekly, to ensure well informed decisions can be made quickly.
  Continue to prioritise debt repayment which helps mitigate business risk. The level of debt at the end of the 2023-24 season should be about half of what it was in 2018.
  Keep up to date with current research and technology, evaluate and implement appropriate systems early.

• The farm is managed based on a production system 3 with imported feed, (PKE), at about 12-14% of total feed eaten.
• All young stock are off farm from weaning.
• All cows are wintered on farm.
• The farm is of rolling contour with 60% of the farm about 40 m elevation difference from the farm dairy. It is 850 m to the furthest paddock. There a 34, 2 ha paddocks, each with 2 water troughs.
• Milking is twice a day from calving till January 25^th, then once a day until drying off about May 20^th.
• The farm dairy is 20 a-side herringbone, (built 2009), so about 11 rows are milked at peak.
• The dairy yards can hold up to 280 cows so there is plenty of space for 220 cows over winter if cows need to be stood off.

• Fertiliser
  pH is 6.2, Olsen P is 50+ (volcanic soils).
  Fertiliser applied includes 130kg N/ha/year over 6 applications of 23kgN/ha each, from May to January. Depending on the time of year it is in the form of Ammo 30, (urea and Sulphate ammonia mix), in the early spring, SustaiNK mix, (23 kg N/ha and 25 kg K/ha), or urea.  The autumn fertiliser applied is a mix of N, P and Mg.
• Effluent management and use
  The farm has stirred storage tanks that can hold thirty days of effluent.
  Effluent can be sprayed on to 17 ha, (about 25% of the farm). Contour limits how much of the farm can be used for effluent.
• Riparian planting
  6 ha of the farm has been fenced off and have been planted.
  Some steeper areas of the farm have been identified to be retired in future.
  
• Waterways
  The majority of waterways are fenced with just a few minor drains left to do.

• Pasture management
  The key to a simple profitable system is to maximise pasture utilisation. Pasture cover and growth rates are monitored throughout the year, with the spring rotation planner used through calving and into the early spring.
• Supplements purchased
  About 140 t PKE (126 T DM), is fed all season from 2-4 kg DM/cow/day depending on time of the year, grazing residuals and weather.
• Cropping
  Usually, 3-4 ha of maize, (130-140 days maturity), is grown each year on the effluent block. This helps shift surplus feed from the spring to the autumn and removes excess fertility from that area.
  Traditional cultivation is used.
  The yields are about 60 t DM, which is fed as maize silage mainly in the autumn. About 20-30t DM is carried through for use in the spring or late summer if needed.
  For the 2023-24 season it is unlikely any maize will be grown as three times as much supplement is on hand at the start of the season than is usually taken into the winter. The wet summer and autumn of 2023 meant none of the 2023 maize crop was fed out and a lot more baleage is also still on hand.
• Supplements made
  Approximately 40 t DM of baleage, (220 bales), is made, using contractors for all the work.

• Breeding and herd testing policy
  AB is for 3 1/2 weeks using A2 semen. The majority of the herd is mated to dairy breeds although a few lower BW cows or likely culls are mated to beef semen.
  2 bulls are run with the herd for another 6 weeks to give a 9 1/2 week mating period. 2 bulls are leased to be used over the R 2 heifers.
  There are no intervention treatments used over mating. 
  Herdtesting is 4 times a year - usually twice with 2 milkings and then 2 tests over 1 milking, (after January when the herd is on once a day).
  All replacement calves are DNA tested.
• Animal health
  Mineral supplementation is via drenching from calving till late November (Mg and a probiotic), Se via drench November and January, plus a Se injection in the winter.
  Heifers are given copper, (Cu), when they return to the farm. No other Cu supplementation is given as the milkers get PKE all year and this is high in CU.
  Drenching with zinc for facial eczema starts in late January.
  The herd SCC averages 129,000 for the 2021-22 season. High SCC cows are treated with longer acting dry cow at drying off. The rest of the herd is also blanket treated with short acting dry cow antibiotic.
• Young stock policy
  Replacement rate is about 20% with 43 calves reared in the 2023 spring.
  Calves are reared on milk and meal and go to external grazing late November. About 8 beef animals are reared each year and go to the owners off farm property in the Bay of Plenty
  R 2 heifers return to the milking platform May 1^st.

• The farm is set up to be able to be managed by one full time person.
• The 2023-24 season will be the first season with a contract milker.
• The farm owner will provide on farm support at key times.
• The farm is compliant for all health and safety requirements.