fbpx
Print this page
Thursday, 28 July 2016 08:55

Higher input systems can be profitable

Written by  Ian Williams, Pioneer forage specialist
Higher input farms keep performing well. Higher input farms keep performing well.

The Dairy Business of the Year recognises leading farms with high achievement in financial performance, people productivity and environmental management.

The recently announced supreme winner for 2016 (judged using farm data from the 2014-15 dairying season), was Landcorp's Ruapehu Farm at Moutoa, near Foxton. This property also won the Best Manawatu Farm Performance, Lowest Environmental Impact and High Input Farm with the Best Financials Awards.

Waikato farmers Rex and Sharon Butterworth were named runner-up and they won the regional award for Best Waikato Farm Performance. See http://dboycomp.com/file/pdf/2016/finalist-results-2016.pdf for the full competition results.

Landcorp's Ruapehu farm manager Glenn Weitenberg says the decision to lock in guaranteed milk to Fonterra during that season paid off for the farm, with a superior return on capital in comparison to the other eight finalists. Their pasture management and animal performance were extremely good and their supplementary feed costs very low.

Supplements, including Pioneer brand maize silage, comprised 27% of the feed on Landcorp Ruapehu and 36% of the feed on Butterworths' farm.

The 2014-15 DairyNZ Economic Survey was released in May. It contains data on the average physical and financial performance of 296 randomly selected owner-operator herds during the 2014-15 season.

It was the start of the tough times for most farmers. While weather was generally favourable and seasonal production was up 3.6%, the milk price was on its way down. The average cash payout was $5.76/kgMS supplied for 2014-15 (net of the industry-good levy, including advance, final payments and dividend). This was 25% lower than the average milk payout received in 2013-14.

Higher input farms (system 4 and 5) feeding at least 20% imported feed kept performing well despite the challenging times. They produced more milk per cow and per hectare, had higher operating profit and a better total return on assets than low (4 - 14% imported feed) or medium (10 - 20% imported feed) farms.

The ten year average data shows that across a range of seasons and payout conditions, higher input farms were the most profitable (see table here).

Events like Dairy Business of the Year show the industry what is possible under good management conditions. The DairyNZ Economic Farm Survey shows there are huge variations in the profitability of all dairy farm systems. Every farmer must find the optimum balance between controlling costs and maximising milk production in their system.

Finally, I want to encourage farmers not to be tempted to make major systems changes as a response to low payout conditions. You run the risk of being worse off while you adjust your management to a new way of farming. A better option is to look at what you are already doing and see how you can do it better.

More like this

Another productive season

New Zealand Dairy Statistics for the 2019/20 season reveal the season was a productive one for dairy farmers.

Featured

Dairy conversion - Otaki style

Near the Horowhenua town of Otaki, dairy conversion has taken on a whole new meaning. It’s not a case of converting sheep and beef farms to dairy farms, rather it’s a case of just converting old dairy sheds to country style tourist accommodation. Reporter Peter Burke visited two such conversions by two pretty special and creative women.

 

Bringing flat batteries to life

Given the absence of power outlets in many remote buildings on New Zealand farms, there’s every chance of ending up with a flat battery when away from civilisation for an extended period.

Kuhn bolsters mower range

Kuhn has bolstered its mower conditioner range with the addition of two rear mounted/ vertical folding models with a 3.10m working width.

2020 property market closes on a healthy note

Data release by the Real Estate Institute of New Zealand (REINZ) shows there were 175 more farm sales for the three months ending December 2020 than for the same period in 2019.

National

Expat workers ready for NZ

Dairy industry recruitment company Rural People Limited is seeing a huge increase in overseas interest to fill New Zealand farming…

Machinery & Products

Kubota ROPS tractors here

Kubota New Zealand product specialist Shaun Monteith says Rollover Protective Structure (ROPS) tractors make up 30% of all tractors in…