SPECIAL REPORT • BUDGETING
KNOWING WHERE YOU’VE BEEN Budgeting and benchmarking numbers form a feedback loop to look back and review the year’s performance, serving to inform decisions and add caution when metrics like payout and feed costs change. Ivan Lines looks back at 2019/20 for his Southland and Otago clients.
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GRAPH 1. GROWING EFFICIENCY: KG MS/KG LW
0.96 0.94 0.92 .09 0.88 0.86 0.84
Cow efficiency kgMS/kgLW
y = 0.0089x + 0.8399 R2 = 0.7349
Linear kgMS/kgLW
0.82 2019-20
2018-19
2017-18
2016-17
2015-16
2014-15
2013-14
AgResearch farm growing nearly 2.5t DM/ha less grass last season than its long-term mean. Thankfully the payout allowed us to buy supplement to offset the poor grass growth. Ivan Lines. The margin of milk income over feed costs improved from $7837/ha to $8851/ha (for a fair comparison, both years are calculated at $7.15/kg MS). We spent $318/ha more on feed, and made another $1014/ha due to the higher payout. These are great results, but we do need to be cautious as this was payout driven. If the
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
50
1 0.98
2005-06
gribusiness Consultants Ltd has for the last 15 years intensively analysed the productivity of its nearly 150 Southland and Otago dairy clients. This data forms the basis of monitoring productivity improvements and ensures our clients are objectively measuring their progress. The review has become an annual highlight for clients as they appreciate the opportunity to reflect on the season passed and to take learnings into the new season. There is also a fair bit of competitiveness involved as the top client is identified and hosts a field day, and everyone wants to be better than the average. In comparison to the year before, 2019/20 average milk production per hectare improved from 1417 to 1442kg milksolids (MS)/ha (+1.6%) even though average pasture utilised per hectare dropped from 13.54 to 12.78 tonnes drymatter (DM)/ha (-5.6%). How did this occur? Average imported feed increased from 2.5 to 3.1kg DM/kg MS (+24%). This includes nitrogen and an adjustment for feed on hand. Concentrate usage increased by 20% and silage fed increased from 312kg DM/cow to 350kg DM/cow. We produced more milk by buying in more feed to offset the reduced pasture production. The reduced pasture growth for the region was also seen in the Woodlands
payout had been $6.00/kg MS in both years then we would have earned $156/ha less this year. Production targets must always be dependent on productivity (conversion of grass into milk and cost structures) and milk price. Other interesting trends between 2018/19 and 2019/202 included a decrease in empty rates from 13.4% to 12.0% and an improvement in six week incalf rates from 70.9% to 71.6%. There could be many different reasons for these improvements including better cow condition at calving and better nutrition premating. Although per cow production for the season was similar to last year (471 vs 469kg MS/cow), daily production at mating was lower than the previous year (cows caught up because of a good autumn).
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
