Budgeting, High Input System (South Waikato)

The success of this 73 ha, 290 cow, high input farm near Putaruru depends on skilled labour and the ability to evaluate and negotiate feed options. Focus on minimising waste, efficient resource use and strong financial management means this business is consistently in the top 10% for operating profit per ha for South Waikato Owners.

This high input, highly stocked farm, depends on effective feed monitoring, efficient effluent management and improving herd fertility for success.

Achieving success with a high input system requires skilled labour and an ability to evaluate and negotiate feed options. A contract milker is employed and the budget has been prepared showing the payment to the contract milker as wages paid, with all costs being the owners share only. The contract milker pays for labour, shed, power, and farm bikes.

Ensuring all resources are still being used efficiently will again be key to maintaining a high level of profitability for this coming season.

Owner with contract milker

Near Putaruru, South Waikato

73ha effective milking platform, no support block

08/07/2024 MA cows (01/07/2024 R 2 heifers)

5 (> 31% imported feed)

134,700 kgMS/year, 1,844 kgMS/ha 464kgMS/cow

Production (last 3 years):

131,119 kgMS average

Numbers at a glance

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2023-24 Season review June 2024

Numbers at a glance

Comments and points of interest

Key points

• Milk production for the season was marginally down on last season, (< 1%), but was 7% behind budget.
• BCS at calving was below target which impacted early season production and this deficit was not recovered despite good summer and autumn pasture growth.
• Total farm working expenses are slightly lower than budgeted, (2%), but over lower milk solids FWE/kgMS are $5.38/kgMS which is up 5%.
• Pasture harvested for the 2023-24 season is about 14.1 t DM/ha, which is 3% down on the previous year.

Comments

Production for the season is 125,435 kg MS which is just 651 less than the previous year. Peak cows milked is 290 as per budget with losses for the season low at only 2. The herd peaked at 2.00 kgMS/cow/day for 11 days, in late September/early October.
All R 3 and any at risk cows went to once a day milking April 10th, and 25 culls went to the works in early April. The remaining 265 cows were milked through till drying off on May 16th. 18 empty cows were sold as in milk cows late May and 3 cows were sold as budget cows.
With hindsight the herd was probably milked for about 5 days too long last season, which reduced supplements carried into the winter and impacted pasture cover at the end of May 2023.
Winter grazing for 25 cows for 2 months was secured to help reduce feed demand on the farm over the winter, so that pasture cover could be increased more quickly. With cover still behind target as calving approached, feeding levels for the cows were restricted. This meant that they were not on a rising plane of nutrition and cow body condition score was lower than target at the start of calving.
This compromise impacted milk production in the early part of the season and this lost production was never regained.
Reproductive performance was also affected with the 3 week submission rate at 78%.
The calving rate for the first 3 weeks was slower than last season so fewer days in milk has also contributed to some of the lower milksolids to date.
Supplements fed for the season of 1,963 kgDM/cow is up on the previous season with most of the increase coming from the first half of the season.
The amount of supplements made on farm this year was 12 ha of silage, (30 t DM). This is nearly double last season when only 16 t DM was harvest. There were better harvest windows for making supplement and though the peak growth was a little later there was a good surplus.
Despite relatively low soil moisture levels there has been good summer and autumn growth, with small amounts of rain coming at just the right time to keep pasture growing. It was not as hot as the precious summer/autumn and there less wind so what rain did fall was more available for the pasture.
Milk income was on target with a higher milk price offsetting the lower than budgeted milksolids.

Current situation

There are 270 cows on farm with 25 again at winter grazing, (left farm early June).
Pasture cover is 2400 kg DM/ha. This is well on target for calving in 3 ½ weeks time.
Body condition score now, (mid-June) is 4.6-4.7, again much improved on this time last year.

Calving and reproduction

• The calving rate for 2023-24 was 62% of the herd calved in 3 weeks, 87% in 6 weeks and 99% in 9 weeks. This is behind last season which was 67%, 80% and 100% respectively.
• The 3 week submission rate for 2023-24 is 78% which much lower than last season, (80%).
• The six week in calf rate is 73% (Actual), this is up on last season (68% E).
• The not in calf rate is 12-13%.
• 69 replacement calves were reared which is as per budget.

Other points of interest

• The average cost of PKE for the season finished $10 below budget at $320/t. Purchased more PKE so total feed costs was similar to budgeted.
• Maize costs of $340/t DM were well down on the budget so even though 10 t DM more were purchased total cost for maize was down on budget.
• Finished the season with 26 t DM more supplement on hand so total net feed costs for the season are $1.88/kgMS which is 35% of FWE of $5.38/kgMS. Fencing costs are up this year as one third of the farms’ fencing is being replaced due to its age. In addition, about 1 ha of steep land was fenced off for riparian planting.
• Calf rearing costs are up as this year the decision was made to rear calves on 50-50 mix of whole milk and milk powder. The cost to the owner was neutral, but it meant the contract milker was better off as more milk was sent to the factory.
• Payments to the contract milker are down 7% with the reduction in forecast milksolids.
• Dairy shed costs are up due to repairs needed to the chiller fan and the water cooler pump.