Budgeting, Northern Wairarapa


10 min read

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

These herd owning sharemilkers in Northern Wairarapa are entering their 10th year, farming 165 ha, milking 380 crossbred cows. They lease an adjoining 38 ha for support, which provides grazing for weaners, wintering for about 50% of the herd as well as maize and pasture silage for the milking cows. Continued success for this business is based on milking fewer cows with focus on improved efficiencies and employing simple systems. A conservative approach to budgeting and continual updating ensures no surprises throughout the year.

These herd-owning sharemilkers in the lower north island are about to start their 10th year in this role. The farm owners live off-farm and have their own farm which they run. A 38 ha adjacent support block, leased by the sharemilker, provides flexibility for the business and a degree of security regarding price and supply of feed and grazing.

A conservative approach is taken for budgeting. These sharemilkers know the system they wish to consistently try to run, and while the final profit achieved is an active decision, they try not to let cash flow drive business decisions either. By always being aware of the cash position and cash forecast for the business, it is easier to balance these decisions by using other levers if need be.

Farm facts

Business type: 

50:50 Sharemilker


Northern Wairarapa

Farm size: 

165 ha effective

Farm size (support block):

Adjoining 38ha leased in the sharemilking business control

Peak cows: 

380 FJX


1/8/2023 cows 20/7/2023 Heifers

Stocking rate:

2.3 cows/ha

Farm system: 

3 (11-20% feed imported)

Wintering system: 

200 Cows, (52%), grazed off for 8 weeks


Budgeted for 2023-24, 170,000+ kgMS total, 1030/ha and 447/cow

Production (previous 2 years):

Average is 1055 kgMS/ha and 458 kgMS/cow)

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)
$4.55 $2.89 $3.89 $591
Physical KPI 2022-23
Pasture and crop
harvested (t DM/ha)
Purchased N
surplus (kg N/ha/yr)
GHG (t CO2 
Six week
in-calf rate (%)
10 77 8.6 72

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

2023-24 mid-season update January 25th 2024

Key Points

•    The season is tracking well with cash flow close to forecast. However it has felt like hard work to get to this point as so often this year things have not gone according to plan and extra effort has been needed to keep things on track.
•    Cooler November and December day time temperatures affected Maize growth rates so yields are likely to be down 15-20%.
•    Discussion with the farm owner in the spring resulted in a decision to increase the supplements purchased from 400 t DM budgeted to 460 t DM, as part of drought mitigation plans.
•    Farm working expenses up on budget but so is income so the effect on cash flow in minimal.

Comments and points of interest


Production to date is 115,726 kgMS, 1000 kg MS behind last season which was a record year for the farm. Peak cows milked is 379 which is on budget. 
The early part of the season was challenging with a high number of rain days and little sunshine. Constant monitoring of pasture cover, growth rates and feed supply were key to ensuring stock were fed adequately and the pastures remained in a good growing state.
Growth rates were slow to increase during the spring and were 3 weeks later than budgeted before they exceeded demand, (late October).
Supplements fed for the season is 312 t DM, all from inventory, (hay, silage, baleage and maize silage). The herd peaked at 2.1 kg/cow/day.
As per budget 13 ha of chicory and 5 ha of maize have been planted on the milking platform. Unfortunately due to the weather, (frosty and or wet), some of the chicory has been planted up to three times so this has added a bit of cost.
The maize was planted on October 10th but cooler weather impacted growth rates it is still 0.6m shorter than other years. The recent heat and moisture have helped cob formation which is currently looking normal. Consequently we have revised yield expectations down from 18-19 t DM/ha to 15 t DM/ha. The slower maize growing season means harvest will likely be late March, a delay of a couple of weeks.
The chicory yields are near normal and grazing started in early December. The crop should last until mid-March.
Supplements made on the milking area are up on budget and last year. The budget was for about 23 t DM, (100 bales baleage and or hay), this season about 42 t DM has been harvested, (136 bales of baleage and 44 bales of hay).
The adjacent leased block continues to provide good support for the milking platform and is exceeding expectations in terms of feed grown. Maize, (9 ha), has been planted as per budget.
With weather forecasts for the summer of El Nino, a review of the purchased feed budget was carried out in the spring with the owner.  The decision was made to increase the quantity of purchased feed from 400t DM to 460 t DM as part of a drought mitigation plan.
Purchased supplement to date for the milking platform is 317 t DM, (the majority coming from an external source and 53 t DM form the support block). The external baleage was more than budgeted as the purchase was based on area and the supplement was later being harvested so yields were up. The maize silage from the support block will make up the balance of the 460 t DM of purchased feed.
Fertiliser applied to date is on budget. Nitrogen used is on budget at 65 kg N/ha, (two applications at 32.5 kgN/ha). While the amount of fertiliser and nitrogen use is normal the price is well below last year and on budget so fertiliser costs are on track.
Income is forecast to be about $100,000 up on budget due to better than expected milk and dividend payments, (the original budget was very conservative).
A portion of last season’s milk production was fixed at a higher price that the final milk price for last season. This added about $30,000 to the final deferred milk price in the spring which has helped to keep milk income on budget. 
The current advance milk price of $6.10 is $0.10 up on budget and milk production is looking like it will be similar to last season so advance income is forecast to be on budget.  Further to that, 46% of the season’s milk production has been fixed at an average price of $8.19 which should add $0.20-$0.30/kgMS on to the final milk price for the total milksolids for the season.

Current Situation

There are currently 377 cows still milking, with daily per cow production dropping from 1.5 kgMS/cow/day to 1.4 kgMS/cow/day in the last couple of days with the recent hot weather. 
With heat stress affecting the cows this last week the herd went to a 5 am and midday milking regime (see Herald article from 2018, https://www.nzherald.co.nz/the-country/news/dairy-nz-take-the-heat-out-of-milking/)
After the morning milking the cows get 2 kg DM/c of pasture and 2.6 kg DM of chicory. After the midday milking they get 12-13 kg DM/c pasture and baleage. This definitely reduces the heat stress on both cows and staff, and seems to help reduce the milk production decline at this time of year.
Pasture cover is 2,150kg DM per ha, and with current pasture growth rates of 35 kg DM/ha/day cover is holding at current daily pasture intakes. The grazing rotation is 30 days with the hay paddocks still to come in.

Looking forward

With supplements still on hand from last season’s inventory, supplements made on the milking platform, supplements purchased, plus the 5 ha of maize silage to be harvested there is up to 7.4 kgDM/cow/day available to be fed from February 1st to May 31st. This is not counting the chicory that is still being grazed.
This will still leave a minimum of 300 t DM of milking cow supplement and 28 t DM of hay to take into next season.
The plan is to milk as many cows as possible through to the end of the season. Drying off decisions will be made based on feed budgets and cow condition. Younger, thinner and early calving cows will dried off first and moved to the support block. This is usually from June but can be earlier depending on the season and feed supply.
As per previous years, “budget” cull cows will be sold near the end of the season and later calving cows and empties milked through the winter.

Calving and reproduction

•    The calving pattern for the 23-24 season was 67% after 3 weeks, 90% after 6 weeks and 99% after 9 weeks.
•    Submission rate for the first 3 weeks was 81% is down slightly on the previous 3 years (83-85%). Scanning is booked for February 7th.
•    Pregnancy testing of the in-calf heifers showed a 98% in calf rate, (2 empty out of 100, the best resutl ever).
•    84 replacement heifers were reared this spring, down slightly on the 100 planned for in the budget. There is limited market for surplus replacement heifers so the decision was made to rear a few less.
•    The weaners are now all off the milking platform.

Other points of interest

•    The feed budget for the support block in August showed a surplus, and with a neighbour requiring winter grazing, an additional 140 cows were wintered for 5 weeks from August until early September. 
•    This increased the income from the block by about $23,000 but also added to an already heavy workload. Extra casual labour was employed, ($3,500) and more baleage was purchased for the extra cows, ($5,000) so the net gain was about $13,000, plus helping out a neighbour.
•    Have been able to continue to with debt reduction and off farm investment out of cash flow.

Management decisions

Strategy and financial

  • People are central to the business. Owners, staff and the many professionals who assist.
  • A philosophy of less is more is an overarching theme. Peak numbers have dropped from 440 cows to 380 since beginning sharemilking on the farm with focus on improved efficiencies and employing simple systems wherever possible production and profit have been maintained.
  • Medium term objectives are to provide stability for a young family though schooling years whilst still trying to grow the business.
  • Growing total wealth through off farm investments as well as sharemilking has been important.
  • The longer term goal is to get into farm ownership.
  • Budgets are looked at monthly – it is a living document. Often the timings of items are adjusted as the season.
  • The focus is always on reducing debt in anticipation of the next opportunity that may arise.
  • Ensure the leased support block is managed efficiently, and in a way that complements the milking platform, and helps minimise the variability in physical and financial outcomes of the business. The lease block must continue to contribute to the growth of the business.

Farm policy and infrastructure

  • The farm is run as a system 3 with 11-20% of total feed intake from off farm winter grazing and imported feed, (maize and baleage and PKE if needed).

  • Weaners leave the farm at 85-90 kg at about 3 months of age and return as in-calf heifers at 22 months of age.

  • The farm and the support block are managed with 3.0  labour units.

  • The farm has a centrally located 50 bail rotary, with automatic cup removers, auto teat-spray and protrak drafter. The yards are flood washed using green water and an automated wash system.

  • Races go in 3 directions and the furthest walk is between 1.1 and 1.3km in each direction.

  • The farm contour is relatively flat with a variation in elevation no more than 8 metres.

  • About 15-20 ha are susceptible to flooding from a small creek, after heavy rain, but this does usually drain away quickly.

  • There is a feed pad adjacent to the shed, with the capacity limited to 300 cows. Lameness increases when higher numbers of cows are on the pad.

  • A single milking herd is run at all times, (apart from a colostrum/special care mob when required), with the shed being able to be operated by one person.

  • With a lower stocking rate the aim is to try and maximise days in milk. This means 365 day milking. With 3 in 2 and OAD milking frequency used in the autumn/winter.

  • Typically the majority of silage supplements are fed late summer to mid spring.

  • Once heifers are teat sealed they are run with the milking herd for 3-4 weeks over the winter to get them used to the rotary milking shed.

  • Budget cows are sold at the end of season but empties are usually milked into August and either culled or sold into farm owners calf rearing operation.

  • Some maize is grown on the milking platform, usually on the most distant paddocks, (about 4-5 ha), so these can be regrassed with newer pasture species. About 13ha of chicory is done on the milking area every year as well.

  • Effluent from the feed pad is utilised on the crops where possible.

  • About 380-400tDM/year total imported feed is used, which equates to about 1000-1,052 kg DM/cow.

  • Supplements fed in most seasons are predominantly imported pasture silage, (from external sources) and maize silage and baleage, (from lease block), with limited use of PKE. PKE is viewed as a backup feed when required and can range from 60-120 t, (wet), depending on the season.

  • Nitrogen use is 115 kgN/ha. Applications are usually August, Nov/Dec and March depending on soil moisture, rainfall and feed requirements.

  • The support block provides winter grazing for 200 cows for 8 weeks and weaner grazing for about 100 calves from mid-November until May. In addition about 120-150 t DM maize silage and 18-27 t DM of baleage is harvested and taken to the milking platform. Other feed grown on the support block includes 7.8 ha of winter oats, plus 54 t DM of baleage and some hay retained for use on the support block. The farm owner pays market rates for a 50% share of the winter grazing, weaner grazing and any supplements that are brought back to the milking area. The 7-8 ha of maize is planted each spring. This is followed by oats sown in the autumn for wintering. Then the area is back into permanent pasture the following spring.

  • The cows move to the lease block for winter grazing as they are dried off. Usually from June but it could be as early as mid-May depending on the season and feed supply on both the support block and the milking platform. Having the support block next door means drying off can be staggered and is based on cow condition, calving date and feed supply.

  • Similarly, the cows return to the milking area in stages as they are due to calve.


  • Farm environment plan
    The farm has an environment plan, as well as an intensive land use consent.
    All Dairy Company and regional council environmental requirements are fulfilled.
  • Water use
    Water comes from a shallow bore. There is a water meter but it is not monitored.
  • Soil fertility, fertiliser and N applied
    Farm fertility is good with Olsen P levels of 32-34 and pH levels of 5.8 to 6.0 at 75mm depth.
    Annual fertiliser applied in the 2022-23 season, (kg nutrient per ha), was 115 N; 34 P; 14 K; 55 S.
    Support block maintenance fertiliser is a blend of DAP, muriate of Potash and sulphurgain 90 S, to deliver (kg/ha) 26.4, 30 P, 40 k and 37.5 S. In addition another 60-70 kg N/ha is applied through applications of PhasedN in June and in the autumn.
    There is a 1.4M litre clip tank for effluent which can be irrigated on to 70ha.


  • Farm walks and pasture assessment are done weekly to fortnightly depending on the time of year and pasture growth rates. This information is used to compile feed budgets which are updated frequently. Knowing the current feed position and forecast feed supply is crucial as it enables quick evaluations of opportunities or risks and allows for more timely decision making.
  • The spring rotation planner is used until pasture growth in the spring exceeds demand. Effort is made to ensure pasture quality is maintained through achieving ideal pasture residuals. Utilising electric fencing as needed is an important part of the pasture management.
  • Spring pasture surpluses on the milking platform are harvested as baleage. The amount varies depending on the season but is on average about 18 t DM, (100 bales, 12 bale equivalents).
  • With 4-5 ha of the milking area in maize as well as 13 ha of chicory, the cropping programmes helps manage spring surpluses without having to make too much silage. It also produces a bulk of feed that can be used later in the summer or autumn.Maize is planted using conventional tillage and direct drilling of seed. Maize yields on the milking area are about 20-22 t DM/ha giving a total harvest of around 95 t DM/ha.
  • Chicory is direct drilled. The chicory area is regrassed in permanent pasture in the autumn. All cropping is done using contractors.
  • Approximately 200 t DM of grass silage is imported from an external source, along with about 120-150 t DM of maize silage and 18-27 t DM of baleage from the leased support block. Supplement is fed predominantly on the feed pad from May-September, otherwise in the paddock outside of this period.


Breeding and herd testing policy
Typical 3, 6 and 9 week calving rates are: 54; 72; 85.The not in-calf rates are typically 14-16%.AB with premier sires and some sexed semen is used for the first 21 – 28 days of mating to generate replacements. Friesian bulls are then run with the herd for another 5-6 weeks to give a total mating period of 9 weeks. Commercial Friesian bulls, (14-16), are usually purchased in August. 
They are BVD blood tested and vaccinated then grazed on the lease block until required. Typically the sale price is close to the purchase price.Jersey bulls, (3-4), are purchased to run with the heifers. It is possible that low birth weight Angus bulls could be used instead of Jersey, and the resulting calves would be sold to the farm owners for their calf rearing operation.
This would reduce the number of bobbies sold. Single sample AM herd testing is carried out 4 times a year.

Animal health
A custom blend of AgVance minerals are used for transition and early lactation which are blended into supplements fed on the feed pad. If no supplements are being fed then pasture is dusted with magnesium and other minerals are administered into the water supply via Dosatron.
Metri checking is carried out 3 times in the spring with appropriate treatments being carried out as required. No other interventions are used over mating apart from strategic once a day milking if absolutely necessary.
SCC average for the season 110000. The SAMM plan is followed at drying off.

Young stock policy
The sharemilking contract allows for 100 replacements reared. However the lease block does allow some flexibility for additional calves to be reared. Care is taken to ensure young stock achieve industry recommended target liveweights.

People, health and safety

  • A full time herd manager is employed along with a farm assistant for 7 months, (0.6 full time equivalent labour unit-FTE).

  • Unpaid business owner input equates to 1.4 FTE. This includes time involved with managing the business such as administration and payroll, GST, and strategic and operational planning.

  • The business owners are passionate about growing and developing staff capability. They enjoy being a part of their journey and helping them prepare for the next step. The work roster for the farm is 11 days on 3 days off.

  • While documentation is important, the health and safety policy on farm is based around “do no harm”, rather than doing formal recording and paperwork all the time. A lot of focus is on monitoring competencies at induction and training on new tasks to ensure positive and safe outcomes.

Budget revision following milk payout drop

August 15th, 2023

Milk makes money! These farmers remember vividly their first two seasons of sharemilking in the 2015/2016 low payout years and are reflecting on what they did then to help them make decisions this year. They believe focusing on the basics and the core business is key:

  • Be efficient with pasture allocation and supplementary feeding and minimise pasture damage.
  • Continually update the cash flow and ensure relevant parties such as accountants, farm owners, bankers and suppliers are informed.
  • Talk to your suppliers in advance if you need products but cannot meet payments.
  • In challenging weather conditions, alternative milking regimes can benefit people and animals

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

We kept as many replacements as allowed in our contract, but no more. Extra calves are a longer term investment but cash is king, so keeping extra will increase costs, (rearing and grazing).

Regularly updating the cash flow meant we had strategies in place to deal with things if the situation changed, which reduced stress and let us focus on farming. We were fortunate to have supportive farm owners as well.

I remember talking well in advance to one supplier about needing their products but not being able to pay for it until February. As this was communicated in advance, they were willing to support us.

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

If you can keep positive, you will learn a lot. We thought we were pretty good, efficient farmers but having to really look at costs and operations out of necessity did ultimately bring some positive changes to the way we farm.

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

We regularly have a catch-up drink, as a team, at the end of the day. We have found this to be valuable, especially on the tougher days.

During the spring, we always have plenty of food and drink at the shed to keep up energy levels.

Strategies for managing a dry summer

October 20th, 2023

How has the season been so far?

  • This season has been wet and challenging, not so much the amount of rain, but the large number of wet days and lack of sunshine.
  • Water tables are high and anecdotally we have had much higher than “normal” rainfall.
  • Production is more or less on track, we are currently down 2% season to date and 5% month to date.
  • Nitrogen use is on track. With 30 kg N applied so far.
  • Pasture cover is still tight and “technically” as of the 20th October we still haven’t hit balance date, which is about 3 weeks later than usual.
  • This is in part because we have started our cropping regime earlier than usual and planted a bit more than planned, so more area is currently out of rotation earlier than usual.
  • Having gone early with our cropping programme has meant that some germination has not been ideal and some replanting has been necessary.

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

  • Cash flow is currently very good. Our final milk payments for last year are better than average as some of last season’s milk was fixed at a higher price.
  • We also milk all through the winter so still have some income in July and August, plus we budgeted conservatively for milk price so had not expected to have a cash flow pinch through the winter.
  • We give priority to forward planning, so dry summer conditions have already been factored into our cash forecasts. Therefore, within reason, the budget shouldn’t be affected too much by a drought.
  • We have already fixed the milk price for approximately 40% of our production at levels that are above the current season's forecast so that has also reduced the exposure to fluctuating milk price, (all that won’t impact until next season).

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

We have already ensured all our budgeted supplement requirements have been arranged with the prices already agreed. This does include a small contingency for a more severe drought.

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

As part of our risk management and resilience strategy to cope with weather extremes we are farming with a lower stocking rate already.

Comes early

If we get an early drought we will review milking regimes and identify which option will work best for our situation at the time in terms of reducing feed demand and supply, and stress on cows.            

Comes late

  • A later drought is preferable, if we have to have one, as it gives the maize time to be harvested.
  • We already have more of the season under our belts and so the impact is less. 
  • The plan is to have enough feed on hand to ensure that, whatever happens, cow condition and pasture cover at calving is not compromised.

Is prolonged

We have a counter theory on situations where supplements start to run low or there is a prolonged period of bridging the gap until rain comes, which suits our farming situation and resources.

  • Identify your culls and empties early and milk them on. In our experience we have found it better to dry off capital stock early and feed just bare maintenance for a period. When the drought breaks and pasture comes away, they will put weight on quickly.
  • The culls and empties still milking can get a bit light as well but you at least have some cows to milk when the rains come.
  • We have culled early before in a drought and ended up still drying off early calving capital stock because cow condition was compromised and not having anything left in milk.

We are in the fortunate situation of having the leased support block next to the dairy farm which gives us the flexibility for off-farm grazing at any time. We can fatten culls through the winter and early spring for sale at higher weights and better prices but also have somewhere to graze cows, (on mainly supplement), that are dried off early.

2023-24 forecast budget

Budget last updated May 2023

Net Milk Sales
Milk revenue is based on a 50% share of 170,000 kg MS @ an advance rate of $6.40/kgMS to April, (payment received in May), and a 50% share of the deferred payment of $1.68/kg MS on 170,000 kgMS. This is net of the sharemilkers share of the DairyNZ levy of 3.6 cents.*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.
685,270 4.03 1,803 4,153
Net Dairy Livestock Sales
Typically 60-70 cows are culled or sold, 150 bobbies and 90 feeder calves to the farm owner. For 2023-24 there are 18 autumn born weaners for sale as well, which will probably be sold in winter for about $500/head. Friesian bulls are purchased in August, BVD tested and vaccinated, then run on the lease block until required. They are sold in the summer and the sale price is typically at break even or slightly above purchase price.
87,730 0.52 231 532
NET DAIRY CASH INCOME 773,000 4.55 2,034 4,685
Wages(incl. ACC)
One full time and one part time staff member are employed equating to 1.6 FTE. This is net of staff rent and includes employer ACC costs.
100,900 0.59 266 612
Animal health
Covers custom blended AgVance minerals for transtion and early lactation, vet visits, metri checking prior to mating, BVD testing for any incoming animals, (herd bulls mainly), mastitis control, calf dehorning,drenches, and vaccinations. The SAMM plan is followed for drying off, and the SCC for the 2022-23 season is 110,000.
62,300 0.37 164 378
Breeding and herd improvement
Covers 3-4 weeks of AB using premier sires and some sexed semen. Friesian bulls are run with the herd for the rest of mating. Bulls are removed from the herd late December to give a 9 week mating period. Heifers are run with low birthweight Angus bulls, (the resulting calves are sold to the owners calf rearing operation).
24,200 0.14 64 147
Farm dairy
Covers detergents, rubberware, and other shed consumables. Rubberware is changed once a year in the autumn. Plant washing system has a metered detergent system.
6,500 0.04 17 39
Electricity(farm dairy, water supply)
Covers shed electricity to run the 50 bail rotary shed and the effluent irrigator, for 365 days, (milking is all year round).
24,000 0.14 63 145
Supplements made(incl. Contractors)
The amount of baleage made varies depending on the season. The budget is for a 50% share of 100 bales @$42/bale.
2,100 0.01 6 13
Supplements purchased
Covers a 50% share of 200 t DM of grass silage imported from an external source. There is no plan to purchase any PKE this season as there is more supplement on hand than normal going into the winter, (approximately 150 t DM). PKE is viewed as a backup feed when required and can range from 60-120 t, (wet), depending on the season.
34,000 0.20 89 206
Calf rearing
Approximately 100 replacement calves are reared on colstrum, wholemilk and meal. Includes about 17 t meal at about $1,100/t and $4,000 for bedding and equipment.
21,300 0.13 56 129
Young and drystock grazing
100 yearlings for 52 weeks @$12/head/week, 50% share. Does not include freight.
25,700 0.15 68 156
Winter grazing
200 cows for 8 weeks, are wintered off on the leased support block.
0 0.00 0 0
Support block lease
The cost shown in the budget is the net cost of leasing and operating the 38 ha adjacent support block. This covers the lease paid, rates, fertiliser, cropping and harvesting costs, offset by revenue from the owners share of grazing and feed costs, plus any external revenue if there is surplus feed not required for the farming operation. The support block provides winter grazing for 200 cows for 8 weeks and weaner grazing for 100 calves from mid-November until May. In addition about 120-150 t DM maize silage and 18-27 t DM of baleage is harvested and taken to the milking platform. Other feed grown on the support block includes 7.8 ha of winter oats, plus 54 t DM of baleage and some hay retained for use on the support block. The farm owner pays market rates for a 50% share of the winter grazing, weaner grazing and any supplements that are brought back to the milking area.
21,500 0.13 57 130
Fertiliser(incl. N)
This is for a 50% share of nitrogen on the milking area, (115 kg N/ha), plus 50% cartage and spreading for all other farm fertiliser. 50% for crop fertiliser is included here for crops grown on the milking area.
43,800 0.26 115 265
Regrassing & cropping
4-5 ha of maize is grown on the milking area along with 13 ha of chicory. This cost covers the sharemilkers share for contractors for ground work/drilling, spraying and chemicals and seed.
40,900 0.24 108 248
Weed and pest
Have own gear to spray weeds, the owner provides the chemical.
50 0.00 0 0
Vehicles & fuel
About 600 hours a year is done on the tractor for feeding out, mowing, scraping the feed pad, race work etc. Covers $18,000 for fuel, the balance is for servicing and maintenance on the tractor and bikes.
29,200 0.17 77 177
R&M(land, buildings, plant, machinery)
This cost is machinery services and breakdowns, general maintenance and loose tools.
17,200 0.10 45 104
Freight and general farm expenses
Includes freight for livestock plus protective clothing, dog expenses and biosecurity levy. Included here is also $6,000 of general costs.
14,300 0.08 38 87
Do own GST and pay roll. Includes accounting, computer, communication and general administration costs.
11,600 0.07 31 70
This is reviewed regularly to ensure it remains relevant.
8,000 0.05 21 48
As per last season.
2,900 0.02 8 18
TOTAL FARM WORKING EXPENSES 490,450 2.88 1,291 2,972
CASH OPERATING SURPLUS 282,550 1.66 744 1,712

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 2 less R 1 heifers, 4 less R 2 heifers, 2 less MA cows and 18 less autumn born weaner beef calves on hand at the end of the season. The value in change in numbers of livestock have been assessed using the IRD NAMV as at May 2022. Net livestock income, (cash and non-cash), is $0.43/kg MS.
-15,000 -0.09 -39 -91
Labour adjustment
Unpaid farm business owner input is 1.4 FTE.
100,000 0.59 263 606
Feed inventory adjustment
Expect to have about 150 t DM less on hand 31st May 2024 as the seasons opening feed is exceptionally high. The good 2023 summer and autumn meant more baleage was made and less maize and baleage was fed out in the autumn. This is based on a market value for the feed on hand of $390/t DM, (50% share).
-30,000 -0.18 -79 -182
As per 2021-22 financial statements plus adjustments for subsequent purchases and sales of fixed assets.
40,000 0.24 105 242
DAIRY GROSS FARM REVENUE 758,000 4.46 1,995 4,594
DAIRY OPERATING EXPENSES 660,450 3.88 1,738 4,003
DAIRY OPERATING PROFIT 97,550 0.57 257 591

More budget case study farms

Want to see how the top operators are spending their money? Are there areas for improvement in your own business where savings can be made? We’ve collected in-depth current season budgets from a number of top performing farms with a focus on lower ‘per unit’ cost of production to help you identify opportunities.

Last updated: Aug 2023
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