Saturday, 27 June 2015 14:17

Higher input systems can make money

Written by 
Ian Williams. Ian Williams.

Last month saw the release of the 2013-14 DairyNZ Economic Survey, which contains a wealth of data on the average physical and financial performance of 301 randomly selected owner-operator herds during the 2013-14 season. 

It shows that high input farms (system 4 and 5) milked more cows and produced more milk than low input (system 1 and 2) farms. Even though they had slightly higher expenses and a lower dairy operating profit per kgMS, high input farms had a higher operating profit per hectare because they produced more milk. They also had a greater total return on assets, lower closing term liabilities per kgMS and the lowest debt to asset ratio (Table 1) when compared to low and medium input systems.

While it is interesting to look at a single season’s data, long term average performance is even more fascinating. An analysis of the past nine seasons shows that on average, high input systems made more money and had the highest growth in equity and the lowest closing term liability. (Table 2)

Intensification is not wrecking the profitability of New Zealand dairy systems. The most profitable farm system is not necessarily the one with the lowest inputs or the lowest cost per kgMS. 

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. Whether you have chosen to operate a low, medium or high input make sure you do it well. 

• Ian Williams is a Pioneer forage specialist. Contact him at This email address is being protected from spambots. You need JavaScript enabled to view it.

Table 1 high input systems can make money

 

Table 2 high input systems can make money

More like this

Milking longer with maize silage

This season's dry conditions have made one thing clear: not having enough feed on hand can bring your season to an early close.

Feed help supplements Canterbury farmers meet protein goals

Two high producing Canterbury dairy farmers are moving to blended stockfeed supplements fed in-shed for a number of reasons, not the least of which is to boost protein levels, which they can’t achieve through pasture under the region’s nitrogen limit of 190kg/ha.

Featured

LIC Space folds for good

Farmer co-operative LIC has closed its satellite-backed pasture measurement platform – Space.

Editorial: Time for common sense

OPINION: The case of four Canterbury high country stations facing costly and complex consent hearing processes highlights the dilemma facing the farming sector as the country transitions into a replacement for the Resource Management Act (RMA).

National

DairyNZ Farmers Forum underway

Over 300 farmers and rural professionals have gathered in Hamilton for the first DairyNZ Farmers Forum for this year.

Machinery & Products

Shearing legend hooked on CanAm

Sir David Fagan, world-renowned competitive sheep shearer with 642 shearing titles worldwide and a knighthood to his name, now runs…

50 years of tractor pull

This year, the Fieldays Tractor Pull, in association with PTS Logistics, mark a major milestone – 50 years of crowd-thrilling…

The Wrangler's birthday bash

It's the Wrangler Limited’s 30th birthday and to celebrate the milestone a prototype of the E Series Wrangler - a…

» Latest Print Issues Online

Milking It

Free speech

OPINION: The Free Speech Union is taking this one too far.

Drug survey

OPINION: New national data from The Drug Detection Agency (TDDA), a leading workplace drug tester, shows methamphetamine (meth) use is…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter