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, South Island merino farms, Waikato/Bay of Plenty dairy 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 Situation and Outlook for New Zealand Agriculture and Forestry.
How the Models Were Created
The two model farms depicted in this report represent deer farming operations within their specified regions, representing the North and South Islands. Each model is created from information drawn from 20 deer farmers and a wide cross section of agribusiness representatives.
As often pointed out by industry, the majority of deer farms also have sheep or cattle. These models run only deer and therefore represent an important but a minority group (estimated at 15 percent of deer farmers (Deer Industry New Zealand, Producer Survey 2006)) within the deer industry. However, to be able to track the deer industry’s progress it is important to compare the industry as a stand-alone deer farm so we can understand the developments occurring in this sector.
The aim of the model is to typify an average family deer farming operation for the region. Budget figures are averaged from the contributing deer farms and adjusted to represent real deer 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.
It is important to note a significant change occurred in 2004/05 to the stock unit (su) conversion rates. These rates were changed to more accurately reflect the stock unit rates accepted and applied by the deer industry. Refer to table 1.1 for the stock unit conversion rates used before and after this change.
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:
$31,000 allowance for labour input
plus 1% of total capital as managerial reward.
An upper limit for WOM of $75,000 has been set.
Table 1.1: Stock Unit Conversion Rate
| Pre 2004/05 | 2004/05 and beyond | |
|---|---|---|
| Stock class | (stock unit) | (stock unit) |
| R1yr hinds | 1.2 | 1.5 |
| R2yr hinds | 1.8 | 2.0 |
| MA hinds | 1.9 | 2.2 |
| R1yr stags | 1.4 | 1.7 |
| R2yr stags | 1.8 | 2.3 |
| R3yr plus stags | 2.1 | 3.0 |
| Breeding stags | 2.1 | 3.5 |
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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