Western Southland
10 min read
Success for this Western Southland farm is driven by a simple, pasture based farm system that is implemented by excellent farm staff. Farm and financial management ensures operating expenses remain below industry average.
This 575 cow, 165 eff ha dairy farm is in Western Southland. The owners live off farm and rely on an excellent on farm team to implement their simple, pasture based farm system.
The high performing, high BW/PW Jersey herd consistently produces over 110% of their bodyweight per cow, and the farm production average has exceeded 1,500 kg MS/ha for the last 4 years.
Farm and financial management aims to keep operating costs below the industry average.

Business type:
Owner-operator
Location:
Western Southland
Farm size:
165 ha effective milking platform, no support land
Soil type:
Waimatuku predominantly silt loam 25–30% topsoil clay content, typically stone-free adequately drained
Peak cows:
575 Jersey
PSC:
10/08/2025 MA cows, heifers 1 week earlier
Stocking rate:
3.48 cows/ha
Farm system:
4 (21-30% feed imported)
Wintering system:
100% of the herd wintered off 8-9 weeks
Production 2026/27
270,000 kgMS/year budget, 1,636 kgMS/ha, 470 kgMS/cow, ( year average is kgMS/ha, kgMS/cow)
Production (last 3 years):
260,000 kgMS/year
| Financial KPI 2026-27 budget updated April 2026 | |||
| Net dairy cash income ($/kgMS) | Total farm working expenses ($/kgMS) | Total operating expenses ($/kgMS) | Dairy operating profit ($/ha) |
| $9.82 | $5.57 | $5.83 | $6,512 |
| Physical KPI 3 year average | |||
| Pasture and crop harvested (t DM/ha) | Purchased N surplus (kg N/ha/yr) | GHG (t CO2 equiv/ha/yr) | Six week in-calf rate (%) |
| 12.8 | 180 | NA | 70 |
Find out more about these KPI's and how to calculate them for your own farm here.
Strategy and financial
Financial management
Key financial focus is to control costs and have low capital expenditure to enable aggressive debt repayment.
In house management of coding, GST, payroll, budgeting and variance reporting using Xero/Figured allows for frequent monitoring of cash position.
Fully review current position and update budget every quarter, with two to three catch ups with the accountant per year.
Benchmark
Use accountant benchmark data (from their own client database), and other local and industry information eg Woodlands research Farm
Environment
Follow best practice for late winter and early spring crop grazing to minimise pasture damage and runoff.
Future plans include native planting. Fonterra planting grant for 25-26 season has provided 200 plants for existing unproductive areas.
Currently in Fonterra's ecopond trial.
Farm policy and infrastructure
Infrastructure
Policy
Environment
Soil fertility, fertiliser and N applied
Follow Ballance recommendations and usually use close to 170-180 units of N/ha.
All paddock soil testing is done every 5 years.
Crop paddocks are tested prior to planting.
Water use
Water supply is from a metered bore.
Use is monitored and reported every year as part of the consent.
Water quality is good.
Shelter and riparian planting
The farm has plenty of shelterbelts, predominantly Macrocarpa, which are trimmed every 3 years.
Pasture and Feed
Herd
People, health and safety
Budget updated April 2026
| INCOME | $TOTAL | $/KgMS | $/COW | $/HA |
| Net Milk Sales
Milk income is based on 270,000 kgMS at an advance of $8.00 and 270,000 kgMS, (target for 2025-26 season), at a deferred price of $1.45. This is net of the DairyNZ levy of $0.036/kgMS. **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.
|
2,543,300 | 9.42 | 4,423 | 15.414 |
| Net Dairy Livestock Sales
Based on 120 MA cull cows @ $750/head, 10 empty R 2 heifers @700/head, 120 Jersey bull calf sales @ $80/head, 250 bobbies @30/head plus 10 breeding bulls bought and sold for a net costs of $600/head.
|
108,100 | 0.40 | 188 | 655 |
| Other Dairy Cash Income | ||||
| NET DAIRY CASH INCOME | 2,651,400 | 9.82 | 4,611 | 16,069 |
| EXPENSES | $TOTAL | $/KgMS | $/COW | $/HA |
| Wages(incl. ACC)
Budgeted for 1 Farm manager, 1 herd manager, 1 farm assistant, a calf rearer and casual relief milker. This equates to 3.4 FTE. This is net of rent and includes PAYE and Kiwisaver payments.
|
254,000 | 0.94 | 442 | 1,539 |
| Animal health
Includes $29,000 for minerals administered via Dosatron and an in shed feed crumble. Cows over 100,000 SCC are treated with dry cow therapy and teat seal, balance of herd including in-calf heifers are teat sealed only.
|
83,000 | 0.31 | 144 | 503 |
| Breeding and herd improvement
Includes herd testing, MINDA, scanning, ear tags and tail paint. Will be part of sire proving scheme from 2026-27 which will cover DNA testing the herd. Budget covers 6 weeks of AB using Jersey semen, (bottom 30% on BW/PW mated to beef), then bulls run with herd for 5 weeks. The 6 week in calf rate for 2025 mating is 76%. The costs also cover pregnancy scanning. No anoestrous or synchrony treatments planned for the 2026 mating. Six week in calf rate is 72% and empty rate is 10%, (5 year averages).
|
40,600 | 0.15 | 71 | 246 |
| Farm dairy
Follow standard plant cleaning recommendations. Covers detergents, and shed consumables.
|
16,200 | 0.06 | 28 | 98 |
| Electricity(farm dairy, water supply)
Budget based on current costs plus 15% expected increases. Shed is 40 aside herringbone with cup removers. Herd is milked twice a day all season. Milking is done with 2 people in shed including bringing in 2 herds. At the peak, milking takes about 4 hours in the morning and 3 hours in the afternoon,
|
37,000 | 0.14 | 64 | 224 |
| Supplements made(incl. Contractors)
400 bales of baleage @ $0.20/kgDM and 50 t DM of silage @ $150/t DM ($0.15/kgDM). Cost covers everything except mowing.
|
25,500 | 0.09 | 44 | 155 |
| Supplements purchased
A mix of 80% PKE, 10% PKE 10 (10% molasses) and 10% DDG is planned with a total of 575 t DM budgeted, (1000 kgDM/cow). The average price of $506/t DM including cartage.
|
291,300 | 1.08 | 507 | 1,765 |
| Calf rearing
150 heifer replacement calves are reared on milk, meal and hay and are weaned at 85 kg live weight. Costs cover meal and hay.
|
12,000 | 0.04 | 21 | 73 |
| Young and drystock grazing
145 weaners for 5 months, 147 R 2 heifers 11 months, 135 R 2 for 4 weeks @ May grazing price, 20 carry over cows for a full year. Includes stock freight.
|
171,000 | 0.63 | 297 | 1,036 |
| Winter grazing
595 MA cows and in calf heifers for 8-9 weeks. Includes stock freight.
|
227,000 | 0.84 | 395 | 1,376 |
| Fertiliser(incl. N)
Soil test all paddocks once every 5 years, (due this season). Fertiliser applied is based on soil test recommendations. Includes 6-7 applications of nitrogen with a total of 175 units N/ha applied. First application for the season is phased N quickstart with Selenium for whole farm, then urea is used.
|
168,200 | 0.62 | 293 | 1,019 |
| Regrassing & cropping
Covers contractors for spring cultivation and planting, plus seed and weed and pest control for winter crop, (swedes), and spring regrassing. The budget is for 15 ha of grass to grass, approx 5 ha of crop to grass and approx 5 ha of grass to crop. So from October to January approx 25 ha are staggered out of rotation, (not including and silage/baleage areas).
|
31,000 | 0.11 | 54 | 188 |
| Weed and pest | 4,000 | 0.01 | 7 | 24 |
| Vehicles & fuel
Covers truck, tractor and Bike costs plus $25,000 for fuel.
|
45,200 | 0.17 | 79 | 274 |
| R&M(land, buildings, plant, machinery)
Includes wood chip, cowshed maintenance, farm dwellings, tracks and races and fencing and yards. Does not include shelterbelt trimming for this year - this is done every two to three years.
|
36,500 | 0.14 | 63 | 221 |
| Freight and general farm expenses
General freight and cartage and bio-security levy .
|
11,200 | 0.04 | 19 | 68 |
| Administration
Accountant, bank charges and consultant fees. Other admin costs are covered via the unpaid owner input labour adjustment.
|
12,800 | 0.05 | 22 | 78 |
| Insurance | 16,000 | 0.06 | 28 | 97 |
| ACC
Staff ACC costs. Owners work predominantly off farm so their ACC is not covered by this business.
|
5,600 | 0.02 | 10 | 34 |
| Rates | 16,900 | 0.06 | 29 | 102 |
| TOTAL FARM WORKING EXPENSES | 1,505,000 | 5.57 | 2,617 | 9,121 |
| CASH OPERATING SURPLUS | 1,146,400 | 4.25 | 1,994 | 6,948 |
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.
| $TOTAL | $/KgMS | $/COW | $/HA | |
| Value of change in Dairy livestock
Minimal change in livestock numbers. Expect to have 10 more R2 on hand and 10 less MA cows. Based on 2025 IRD NAMV.
|
-2,900 | -0.01 | -5 | -18 |
| Labour adjustment
This is for unpaid owner input for about 300 hours (0.125 FTE) and covers administration, farm oversight and governance.
|
24,000 | 0.09 | 42 | 145 |
| Feed inventory adjustment
Budget is for no significant change in supplements on hand for the season.
|
0.00 | 0.00 | 0.00 | 0.00 |
| Depreciation
The business owns minimal farm vehicles and plant. Some additional equipment is shared with a neighbouring farm. Depreciation is based on prior years depreciation plus an allowance for the shared plant.
|
45,000 | 0.17 | 78 | 273 |
| DAIRY GROSS FARM REVENUE | 2,648,500 | 9.81 | 4,606 | 16,052 |
| DAIRY OPERATING EXPENSES | 1,574,000 | 5.83 | 2,737 | 9,539 |
| DAIRY OPERATING PROFIT | 1,074,500 | 3.98 | 1,869 | 6,512 |
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.
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