1 Introduction
Each year the Ministry of Agriculture and Forestry’s policy unit (MAF Policy) monitors the production and financial status of farms and orchards. The unit also monitors trends, issues, and sector concerns. It uses this information to create models of specific farm and orchard types: for example, Waikato/Bay of Plenty dairy farms, South Island merino farms, or Bay of Plenty kiwifruit orchards.
Such models are the basis of MAF Policy’s Monitoring Report series of short-term financial and physical forecasts for agriculture sectors and regions within New Zealand. The reports reflect growers’ expectations and intentions, as well as the views of those servicing the sector. These forecasts are not MAF price or production predictions: MAF receives the information for the models from contracted sources. MAF’s price and production forecasts are published in the Situation and Outlook for New Zealand Agriculture and Forestry (available at www.maf.govt.nz).
This report contains five regional dairy models and a commentary on one region.
How the models were created
The five model farms depicted in this report represent dairy farming operations within their specified regions. Each model budget is based on information drawn from 20 dairy farmers and a wide cross section of agribusiness representatives. The structure of the model is based on average Livestock Improvement data from the regions represented.
The aim of the model is to typify an average owner-operated dairy farming operation for the region. Budget figures are averaged from the contributing dairy farms and adjusted to represent real dairy farms. Income figures include off-farm income, new borrowing, and other cash income. Expenditure figures include costs of management, farm production, debt leasing, drawings, and other land development and capital purchases.
Monitoring is continually being improved to meet the needs of the users of the reports. From time to time the models are revisited, and changes may be made. Bear this in mind when making comparisons between years.
Calculations used in the models
The economic farm surplus (EFS) depicted in the model budgets is calculated as follows:
gross farm revenue
plus change in livestock value
less working expenses (excluding interest, rent, and lease costs)
less depreciation
less wages of management (WOM).
Wages of management are calculated as follows:
$38,000 allowance for labour input
plus 1% of total capital as managerial reward.
An upper limit for WOM of $75,000 has been set.
Contact for Enquiries
Farm Monitoring Programme 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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