Southland dairy
This report contains the key results from the Ministry of Agriculture and Forestry’s 2008 dairy monitoring programme. The full Pastoral Monitoring Report 2008 will be available in December 2008.
Key points
- The model’s total milksolids production decreased 1 percent in 2007/08 to 195 000 kilograms.
- Drought affected the northern Southland area causing milksolids production there to fall by up to 7 percent.
- The record milksolids payout gave the highest net cash income ever recorded in the model.
- Feed, fertiliser and fuel costs increased significantly with farm working expenses now $3.31 per kilogram of milksolids.
- Farm profit before tax increased six-fold in 2007/08. The cash surplus was $251 000.
- Around 100 new dairy farms will start milking in the spring of 2008.
- The increase in land price indicates that dairy farmers’ morale is buoyant and business confidence is high.
- Equity increased by $3.2 million to over $7.5 million per farm from July 2007 to July 2008.
Table 1: Key parameters, financial results and forecast for the Southland dairy model farm
Southland dairy model budget and expenditure
Table 2: Southland dairy model budget
Table 3: Southland dairy model expenditure
Southland dairy model profitability trends
Figure 1: Southland dairy model farm profitability trends
Information about the model
The Southland dairy model represents about 660 dairy farms in Southland that supply milk to the Fonterra factory at Edendale.
This model has increased significantly in size, stocking rate and production over several years. In 1995, the average farm size was 130 hectares. In 2000/01, it was 182 hectares, made up of 152 hectares milking platform and a 30 hectares leased run-off. The model size was increased in the 2001/02 season to 162 hectares milking platform and a purchased 30 hectares run-off.
From 2005/06 the model is 178 hectares plus a 30 hectare runoff. Many farms in the model have been producing milk for less than six years. The size and production from these farms is still increasing. An increase of up to 100 extra dairy units in the 2008/09 year will also affect the average size and production.
The model is created from information drawn from 30 dairy farms and a wide cross section of agribusiness representatives. The aim of the model is to typify an average dairy farm for Southland. Budget figures are averaged from the contributing properties and adjusted to represent a real dairy farm. Income figures include off-farm income, new borrowing, and other cash income.
For more information on the models contact: Trish.Burborough@maf.govt.nz
Published by:
MAF Policy
Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526
Wellington 6140
New Zealand
Tel: 64 4 894 0100
Fax: 64 4 894 0720
Web: www.maf.govt.nz
ISSN 1178-4385 (Online)
© Crown copyright - Ministry of Agriculture and Forestry 2008
The information in this report by the Ministry of Agriculture and Forestry is based on the best information available to the Ministry at the time it was drawn up and all due care was exercised in its preparation. As it is not possible to foresee all uses of this information or to predict all future developments and trends, any subsequent action that relies on the accuracy of the information in this report is the sole commercial decision of the user and is taken at his/her own risk. Accordingly, the Ministry of Agriculture and Forestry disclaims any liability whatsoever for any losses or damages arising out of the use of this information, or in respect of any actions taken.
Contact for Enquiries
Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
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