- The Northland sheep and beef farm
- Key points
- Physical factors
- Financial position of the farm
- Issues and trends
- Budget
3 Northland sheep and beef
The Northland sheep and beef farm
This model represents a farm family partnership on easy rolling to moderately steep hill country. Casual labour is employed. The cattle to sheep ratio is high with 75 percent of total stock units as cattle.
A breeding flock with 25 to 30 percent ewe hogget replacements is run. Lambing percentages have gradually increased and are now typically between 120 and 130 percent. Most lambs are sold at around 14.5 to 16 kilograms carcass weight. Most farmers will try and sell as many lambs as possible before the onset of the traditional dry period in February. Farmers buy in a number of lambs late in the autumn and finish them during the winter period and early spring. Ewe numbers have shown a small increase on the monitored farms. Profitability per sheep stock unit has decreased.
A crossbred breeding herd is run with nearly all homebred cattle wintered. Replacement heifers are bought in. Homebred heifers are either sold as yearlings in the spring store sales, or as prime 12 to 24 month heifers to the local trade market. A few steers are sold as weaner, but the majority are wintered over and sold on the spring grass market (14 to 16 months of age) or carried through to slaughter from 22 to 30 months of age. A number of bull calves are purchased during the spring as weaners. These are intensively farmed during the winter and spring. Bulls are sold finished between 16 and 30 months of age.
Table 3.1: Northland sheep and beef model summary, 2005/06
| Effective area (ha) | 314 ha | Total stock units wintered | 3 176 su | |
| Opening stock wintered | Breeding cows | 126 hd | ||
| Breeding ewes | 611 hd | R1yr cattle | 242 hd | |
| Replacement ewe hoggets | 188 hd | R2yr cattle | 118 hd | |
| Other sheep | 75 hd | Other cattle | 13 hd |
Key points
- Seasonal conditions were variable in 2005/06, with a good winter and early spring, a wet and cold mid-spring, and a mild autumn giving way to a very wet early winter.
- Returns from lambs were well down on 2004/05 prices with further reductions forecast for 2006/07.
- The availability of good quality calves, rearing costs and perceived risk has resulted in a marked shift from farmers purchasing and rearing four-day old bull calves to sourcing weaned animals.
- Continued deficits have seen decreases in spending on fertiliser, repairs and maintenance, development, and capital purchases.
- Land prices are expected to stabilise in the coming year following sustained increases in value over the past five years.
Table 3.2: Key parameters of the Northland sheep and beef model
| 2002/03 | 2003/04 | 2004/05 | 2005/06 | 2006/07f | |
|---|---|---|---|---|---|
| Effective area (ha) | 314 | 314 | 314 | 314 | 314 |
| Opening sheep stock units | 714 | 715 | 751 | 796 | 806 |
| Opening cattle stock units | 2 266 | 2 336 | 2 331 | 2 379 | 2 401 |
| Opening total stock units | 2 980 | 3 050 | 3 082 | 3 176 | 3 207 |
| Stocking rate (su/ha) | 9.5 | 9.7 | 9.8 | 10.1 | 10.2 |
| Ewe lambing (%) | 119 | 121 | 124 | 126 | 126 |
| Average lamb price ($/hd) | 57.60 | 61.94 | 66.62 | 55.00 | 53.00 |
| Average wool price ($/kg) | 2.84 | 2.94 | 2.47 | 2.36 | 2.50 |
| Total wool produced (kg) | 3 603 | 3 773 | 3 818 | 4 339 | 4 464 |
| Wool production (kg/ssu1) | 5.00 | 5.30 | 5.09 | 5.45 | 5.54 |
| Average R2yr steer ($/hd) | 882 | 510 | 840 | 785 | 750 |
| Average cull cow ($/hd) | 534 | 499 | 580 | 527 | 520 |
| Gross farm revenue ($) | 201 251 | 186 864 | 221 051 | 208 298 | 212 381 |
| Cash farm surplus ($) | 85 681 | 54 405 | 56 100 | 57 963 | 61 264 |
| Net trading profit ($) | 86 620 | 40 492 | 58 966 | 43 960 | 45 972 |
| Disposable surplus/deficit ($) | - 18 206 | - 19 579 | - 28 792 | - 31 818 | - 16 431 |
Note
1 Sheep stock unit.
Symbol
f Forecast
Physical factors
Pasture covers going into June 2005 were around 300 kilograms of dry matter per hectare below target due to the late autumn drought and cool, early winter weather. The 2005 winter, however, was one of the kindest on record, with dry weather and relatively warm temperatures contributing to the build up of good pasture covers into the late winter and early spring period. Pasture growth data from the region indicated that despite the good conditions, winter growth rates were lower than the previous year. Better utilisation of pasture and less pugging damage may therefore have contributed to better pasture covers. Animal feed requirements were also probably less due to the drier and warmer winter conditions.
Rainfall from May to November 2005 was around 75 percent of the long-term average across the region although this varied from 66 percent in the far north to near to the long-term average south of Whangarei.
October brought a wet, cold period across much of the region, contributing to decreasing pasture covers, particularly on farms with a high proportion of breeding stock. This impacted on lamb weaning weights on some farms, most notably where nitrogen fertiliser was not used. Farmers who had applied nitrogen during the spring had surplus pasture, which was conserved as hay or silage. Farms with a higher proportion of finishing stock had the additional option of manipulating purchase and sale dates to manage their way through the period.
The summer brought a brief dry spell, but warm rain in March 2006 spread across most of the region, promoting kikuyu grass growth. During April 2006 pasture growth rates on the Far North Monitor Farm were 25 kilograms of dry matter per hectare per day, compared with growth of eight kilograms of dry matter per hectare per day in April 2005. Many farmers had difficulty controlling kikuyu growth through grazing management.
Eastern regions of Northland received regular rain through April and May 2006. Ground conditions were extremely wet and pugging damage emerged as a major problem across the region. Wet weather also delayed re-grassing programmes with later-sown paddocks being slow to germinate and facing increased competition from weeds. Although pasture covers in early May were well ahead of last year, cold, wet weather since then has seen a rapid decrease in pasture growth rates and poor utilisation resulting in covers in early June 2006 being at a similar low level to June 2005.
Lambing percentages increased from 124 percent in the 2004/05 season to 126 percent in 2005/06. This was largely due to good feed conditions in the 2004/05 summer and early autumn contributing to heavier ewes at weaning. Higher ewe lamb weaning weights in the 2004/05 period have contributed to an increasing proportion of ewe hoggets being mated. There was typically a good feed supply during ewe mating in the 2006 season and farmers anticipate lambing percentage in 2006 to be similar to the 2005 season. Ewe numbers in 2006/07 are anticipated to remain similar to the 2005/06 season, with a slight increase in the percentage of hoggets being lambed.
Calving percentages in 2005/06 were higher than anticipated by farmers. Some farmers have moved to later calving for the 2006/07 season, which appears to have contributed to the higher pregnancy percentage this season. Calf weaning weights in 2005/06 were heavier than in the previous year, largely due to better feeding through the summer and autumn.
Despite good feed intakes through the 2006 late autumn period, finishing stock performance has been disappointing. Lamb growth in particular was lower than expected during autumn 2006 due to low clover levels and less soluble carbohydrate in pasture. Farms without breeding cows have delayed marketing finished cattle so they can use their grazing in an effort to maintain kikuyu quality. This has impacted on liveweight gain, with some farmers reporting stock losing weight in April despite feeding relatively high-quality pasture.
Warm, wet conditions through late autumn are normally associated with a severe risk of facial eczema, but spore counts remained low across most of the season, peaking in early April. There is speculation that the increased prevalence of kikuyu across the region may help reduce facial eczema risk. In addition, many farmers have been purchasing rams bred for facial eczema resistance. Observed incidence of clinical facial eczema has been very low across the region.
Financial position of the farm
Review of 2005/06
Revenue
Gross farm revenue for 2005/06 fell by 6 percent to $208,000 compared with 2004/05. This drop was largely driven by falls in gross revenue of both sheep (3.5 percent) and cattle (6 percent). These falls were in contrast to the June 2005 farmers’ forecast of a 4 percent increase in gross farm revenue compared with 2004/05, with increases expected in cattle, sheep and wool revenue.
The fall in sheep revenue was mainly due to a reduction in the works lamb price. The average value for prime lambs of $55 per head was more than $11 per head less than in the 2004/05 season price of $66.62 per head. The fall in lamb value became apparent in late November 2005, with a marked drop in prices through the autumn. Farmers selling lambs earlier in the season were more insulated from the drop in value, with the worst of the slump in lamb price occurring between February and April 2006. Relatively early lambing in Northland, combined with a high cattle to sheep ratio will have helped reduce the impact of lower lamb prices compared with other regions.
Cattle gross revenue decreased by 6 percent compared with the 2004/05 season through a combination of factors. Of particular note has been a shift from buying and rearing four-day-old calves to purchasing bull calves as weaners. Cattle weights at marketing time were lower than anticipated due to the poor autumn in 2005 and low pasture growth through November and December. Cattle prices were also lower than expected during critical marketing periods. Bull prices were lower than anticipated for a period in December to January because of the dry summer, but picked up later in the autumn. Furthermore, strong autumn pasture growth has meant some stock that typically would have been marketed in late autumn have been retained to assist in controlling kikuyu growth.
Farmers buying replacement cattle have been competing for stock, with good autumn growth contributing to a buoyant cattle store market. The margin on cattle (particularly bulls) has been thinner compared with recent years, which has also impacted on gross farm revenue for the 2005/06 season.
The income from wool at $10,200 in 2005/06 is 10 percent lower than the 2004/05 income. This was due to a fall in wool price, from $2.47 per kilogram in 2004/05 to $2.36 per kilogram in 2005/06, and went against an expectation among farmers that a lower New Zealand dollar would see an increase in the price of wool.
Table 3.3: Northland sheep and beef cash farm revenue
|
2002/03 ($) |
2003/04 ($) |
2004/05 ($) |
2005/06 ($) |
2006/07f ($) | |
|---|---|---|---|---|---|
| Sheep sales less purchases | 35 512 | 39 018 | 42 268 | 40 776 | 40 423 |
| Cattle sales less purchases | 155 562 | 133 193 | 165 195 | 154 789 | 157 682 |
| Wool | 10 237 | 11 076 | 11 488 | 10 233 | 11 176 |
| Grazing income | 0 | 0 | 0 | 0 | 0 |
| Other income | 300 | 3 577 | 3 100 | 2 500 | 3 100 |
| Gross farm revenue | 201 611 | 186 864 | 221 920 | 208 298 | 212 381 |
Symbol
f Forecast
Expenditure
Farm working expenses at $120,200 in 2005/06 decreased by 12 percent compared with 2004/05. The move away from rearing four-day-old calves has reduced feed costs significantly. Other reductions in farm expenditure included re-grassing (down 32 percent), fertiliser (down 9 percent), and lime (down 34 percent). Allowing for the increased price per tonne and cartage costs, this represents a large drop in the volume of fertiliser applied and may reflect that farmers are willing to decrease spending in this area following a number of years of above maintenance applications. Expenditure on repairs and maintenance has dropped 18 percent following significant investment in tracking, drainage and fencing over the past five years.
Farm working expenses, which have increased from the 2004/05 year, include: animal health (12 percent); electricity (10 percent); hay and silage costs (10 percent); freight (22 percent); shearing (33 percent); fuel (17 percent); rates (3 percent); and ACC (12 percent). Of note is the increasing number of farmers choosing to use ACC “Cover Plus” to provide greater security and more realistic compensation if injured.
Net result
The model cash farm surplus of about $58,000 for 2005/06 is slightly higher (1.7 percent) than 2004/05. Interest rates increased through the year, impacting on farmers with a high proportion of seasonal debt. However, the model farm, like many Northland farms, has the majority of its debt as fixed term loans, providing some insulation from rising interest rates. Despite the small increase in cash farm surplus the disposable deficit has increased from around $28,000 in 2004/05 to nearly $32,000 in 2005/06. This is largely due to increased taxation payments and, to a lesser extent, increased drawings, and is despite a reduction in capital purchases of 68 percent.
Off-farm income and new borrowings have remained relatively static compared with previous years. This has resulted in a negative net cash change of around $13,000 being incurred in 2005/06 compared with –$9,900 in 2004/05.
Farmers are typically increasing debt either by transferring seasonal overdrafts to term debt, or by increasing the size of the overdraft to accommodate the financial result. An increase in farm value has contributed to equity growth of 15 percent compared with the 2004/05 opening value and farmers are comfortable increasing borrowings against this background of asset growth. An increasing number of farmers are choosing interest-only payment options.
Forecasts for 2006/07
Revenue
Gross farm revenue is forecast to increase by less than 2 percent in the 2006/07 year. Cattle sales are expected to increase slightly, but this is partially offset by higher prices paid for replacement cattle due to more competition for store stock. Gross revenue returns for sheep are expected to remain static due to a forecast of static lambing percentage at 126 percent, higher ewe numbers and expectations of a further decrease in prime lamb prices. Price gains for beef and lamb are expected from a further depreciation of the New Zealand dollar relative to the US dollar, but farmers have taken a cautious view and not included this in their forecast budgets.
Expenditure
Overall, cash farm expenditure in 2006/07 is expected to be very similar to 2005/06. Spending on repairs and maintenance is forecast to further decrease (down 23 percent), with small drops in hay and silage costs. Most other farm working expenses are forecast to increase slightly, with changes in fertiliser (up 3 percent), fuel (up 11 percent), and shearing costs (up 3 percent) the most notable. Forecast increases in fertiliser expenditure are a net result of increasing costs and a reduction in actual fertiliser applied.
Net result
The model cash farm surplus is forecast to increase by 5 percent to $61,000. Interest is expected to be similar to the 2005/06 year, while tax payments are expected to reduce by 66 percent back to 2004/05 levels. Drawings and principal repayments are expected to remain at similar levels to 2005/06. In 2005/06, monitored farms significantly reduced capital purchases. In 2006/07 farmers are forecasting a drop in development expenditure too.
The forecast position for 2006/07 shows a disposable deficit of around $16,000, reducing to half the 2005/06 deficit. With new borrowings and off-farm income remaining the same, a small positive net cash change of around $2,500 is expected compared with the –$13,000 in 2005/06.
Figure 3.1: Northland sheep and beef profitability trends
Symbol
f Forecast
Issues and trends
Strategies to control kikuyu grass remain a concern for many farmers. Controlling kikuyu is essential to maximise winter and spring pasture production, so failing to control kikuyu can have a major negative effect on the following year’s farm production. Traditional control methods include mulching or re-grassing. Mulching is estimated to cost around $110 per hectare and is impractical on many sheep and beef properties. Re-grassing costs $800 to $1,200 per hectare. However, few farmers have the financial capacity to re-grass a sufficient area of the farm to practically assist with kikuyu management.
Many farmers continue to use stock pressure to control kikuyu, either by purchasing additional stock or holding onto stock longer and then trying to “clean-up” excess pasture in the winter. The role of the breeding cow in managing kikuyu is also coming under scrutiny as an option for kikuyu management. Some farmers are investigating using management tools such as later calving cows and once-bred heifers as tools to better integrate breeding cows with finishing classes of stock. Research into practices that will help farmers create sound kikuyu management plans that are flexible enough to cope with the variability in seasonal growth will be essential and is in progress.
Clover root weevil and clover root nematode had a major impact in the 2005 spring, particularly in the far north. Data from the Far North Monitor Farm showed that the proportion of clover relative to total feed available dropped in the October to January period from an average of 32 percent in 2004/05 to an average of 7 percent in 2005/06. The loss of clover, combined with lower than expected growth rates in October, contributed to lower cattle growth rates, lower lamb weaning weights, and poor ewe condition on some farms.
Recent publicity about environmental issues associated with excessive fertiliser use has contributed to farmers feeling more comfortable about reducing fertiliser spending after a period of above maintenance applications. Nutrient budgets and soil tests are indicating that there may be scope to reduce spending on phosphate and potassium and some farmers are choosing to put more money into strategic nitrogen use.
The availability of weaned calves, coupled with better returns over recent years, has seen many farmers move from rearing calves themselves to buying weaned calves. Calf quality remains a concern, with calves reared later in the season often associated with poor health and higher death rates. The increasing component of jersey genetics in bull calves sourced from the dairy industry is affecting the beef industry because of their smaller size and lower growth rates.
There appears to be a move into more bulls across many farms. Increasing intensification has seen an increase in overall stocking rates, with an increase in the number of bulls wintered.
Although farmers are expecting that wool prices will increase, they remain apathetic about potential returns from wool. The impact of breeding programmes on yield and quality of wool is a minor concern for many farmers in the current climate where lamb meat remains the more valuable product and the focus of breeding programmes.
The popularity of winter lamb finishing is mixed across the region. Some farmers who had hoped to finish winter lambs in 2005 were unable to purchase them because of the dry autumn. The slump in lamb prices late in 2005 also created disappointment with some farmers who had anticipated high returns from winter lambs. Many farmers do not see lamb prices recovering within a year. Although winter lambs are a suitable option for diversification, particularly to help protect Northland’s wetter soils from cattle treading, winter finishing is considered a relatively high risk policy. The instigation of penalties for heavy lambs has also discouraged some farmers from getting back into the market. The number of lambs brought into Northland this year is much lower than in previous years.
Internal parasite resistance is a concern for many farmers, with a great deal of confusion about appropriate best practice. The lack of good quality advice is seen as an impediment and is a result of the region’s low sheep numbers and the wide variety of stock policies. Most farmers accept that drench resistance is inevitable and are interested in the concept of reducing parasite larvae contamination of pastures.
Farmers have expressed concern about the continuing subdivision of farms into lifestyle blocks. In particular it is becoming increasingly hard to justify the expansion of farms through amalgamation on areas close to cities and towns. Farmers accept the proliferation of lifestyle blocks is also increasing their own farm values but feel that the continued fragmentation of farms could negatively change the social dynamic of their communities. Farmers commented that there does not seem to be any plan by the regional authorities to restrict subdivision and feel they are under increasing scrutiny by lifestyle block neighbours, who often have very little understanding of rural issues.
Farmers are anticipating farm prices to stabilise during 2006/07 following a sustained period of growth over the last five years. While farmers do not expect prices to fall, there is a feeling that farm prices will not enjoy the dramatic growth seen recently.
Table 3.4: Northland sheep and beef budget
| 2005/06 | 2006/07f | |||||
|---|---|---|---|---|---|---|
| Whole farm ($) | Per ha ($) | Per su ($) | Whole farm ($) | Per ha ($) | Per su ($) | |
Revenue | ||||||
| Sheep | 44 466 | 142 | 55.85 | 44 173 | 141 | 54.80 |
| Wool | 10 233 | 33 | 12.85 | 11 176 | 36 | 13.86 |
| Cattle | 225 471 | 718 | 94.76 | 229 880 | 732 | 95.74 |
| Grazing income | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Other farm income | 2 500 | 8 | 0.79 | 3 100 | 10 | 0.97 |
| Less | ||||||
| Sheep purchases | 3 690 | 12 | 4.64 | 3 750 | 12 | 4.65 |
| Cattle purchases | 70 682 | 225 | 29.71 | 72 198 | 230 | 30.07 |
| Gross farm revenue | 208 298 | 663 | 65.60 | 212 381 | 676 | 66.22 |
| Cash farm expenditure | 120 163 | 383 | 37.84 | 120 534 | 384 | 37.58 |
| Interest | 30 172 | 96 | 9.50 | 30 582 | 97 | 9.54 |
| Rent and/or leases | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Cash farm surplus | 57 963 | 185 | 18.25 | 61 264 | 195 | 19.10 |
| Stock value adjustment | 3 355 | 11 | 1.06 | 953 | 3 | 0.30 |
| Minus depreciation | 17 358 | 55 | 5.47 | 16 246 | 52 | 5.07 |
| Net trading profit | 43 960 | 140 | 13.84 | 45 972 | 146 | 14.33 |
| Taxation | 15 628 | 50 | 4.92 | 5 322 | 17 | 1.66 |
| Net trading profit after tax | 28 331 | 90 | 8.92 | 40 650 | 129 | 12.67 |
Allocation of funds | ||||||
| Add back depreciation | 17 358 | 55 | 5.47 | 16 246 | 52 | 5.07 |
| Reverse stock value adjustment | – 3 355 | –11 | – 1.06 | – 953 | – 3 | – 0.30 |
| Drawings | 42 000 | 134 | 13.23 | 43 000 | 137 | 13.41 |
| Principal repayments | 23 153 | 74 | 7.29 | 21 874 | 70 | 6.82 |
| Development | 5 000 | 16 | 1.57 | 3 500 | 11 | 1.09 |
| Capital purchases | 4 000 | 13 | 1.26 | 4 000 | 13 | 1.25 |
| Disposable surplus/deficit | – 31 818 | – 101 | – 10.02 | – 16 431 | – 52 | – 5.12 |
| Other cash sources | ||||||
| New borrowing | 10 000 | 32 | 3.15 | 10 000 | 32 | 3.12 |
| Off-farm income | 9 000 | 29 | 2.83 | 9 000 | 29 | 2.81 |
| Other cash income | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Net cash change | – 12 818 | – 41 | – 4.04 | 2 569 | 8 | 0.80 |
Assets and liabilities | ||||||
| Farm, forest and building (opening) | 1 566 860 | 4 990 | 493.42 | 1 566 860 | 4 990 | 488.55 |
| Plant and machinery (opening) | 68 189 | 217 | 21.47 | 61 961 | 197 | 19.32 |
| Stock valuation (opening) | 366 808 | 1 168 | 115.51 | 370 163 | 1 179 | 115.42 |
| Total farm capital | 2 001 857 | 6 375 | 630.41 | 1 998 984 | 6 366 | 623.29 |
| Total debt opening | 362 000 | 1 153 | 114.00 | 349 499 | 1 113 | 108.97 |
| Equity | 1 639 857 | 5 222 | 516.41 | 1 649 485 | 5 253 | 514.31 |
Symbol
f Forecast
Table 3.5: Northland sheep and beef expenditure
| 2005/06 | 2006/07f | |||||
|---|---|---|---|---|---|---|
| Whole farm ($) | Per ha ($) | Per su ($) | Whole farm ($) | Per ha ($) | Per su ($) | |
Farm working expenses | ||||||
| Permanent wages | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Casual wages | 3 600 | 11 | 1.13 | 3 800 | 12 | 1.18 |
| ACC | 3 379 | 11 | 1.06 | 3 264 | 10 | 1.02 |
| Animal health | 8 415 | 27 | 2.65 | 8 659 | 28 | 2.70 |
| Breeding | 1 300 | 4 | 0.41 | 700 | 2 | 0.22 |
| Electricity | 2 750 | 9 | 0.87 | 2 950 | 9 | 0.92 |
| Feed (hay and silage) | 2 191 | 7 | 0.69 | 1 828 | 6 | 0.57 |
| Feed (crops) | 700 | 2 | 0.22 | 800 | 3 | 0.25 |
| Feed (grazing) | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Feed (other) | 1 100 | 4 | 0.35 | 1 400 | 4 | 0.44 |
| Fertiliser | 29 156 | 93 | 9.18 | 30 159 | 96 | 9.40 |
| Lime | 4 214 | 13 | 1.33 | 4 673 | 15 | 1.46 |
| Farm forestry costs | 350 | 1 | 0.11 | 350 | 1 | 0.11 |
| Freight (not elsewhere deducted) | 3 600 | 11 | 1.13 | 3 800 | 12 | 1.18 |
| Re-grassing costs (contractors) | 1 821 | 6 | 0.57 | 1 800 | 6 | 0.56 |
| Shearing costs (per ssu) | 5 847 | 19 | 7.34 | 6 015 | 19 | 7.46 |
| Weed and pest control | 3 100 | 10 | 0.98 | 3 300 | 11 | 1.03 |
| Fuel | 7 600 | 24 | 2.39 | 8 400 | 27 | 2.62 |
| Vehicle costs (excluding fuel) | 4 900 | 16 | 1.54 | 5 300 | 17 | 1.65 |
| Repairs and maintenance | 15 455 | 49 | 4.87 | 11 850 | 38 | 3.69 |
| Communication costs (phone and mail) | 2 600 | 8 | 0.82 | 2 700 | 9 | 0.84 |
| Accountancy | 2 750 | 9 | 0.87 | 2 800 | 9 | 0.87 |
| Legal and consultancy | 1 600 | 5 | 0.50 | 1 600 | 5 | 0.50 |
| Other administration | 3 200 | 10 | 1.01 | 3 300 | 11 | 1.03 |
| Rates | 4 800 | 15 | 1.51 | 5 136 | 16 | 1.60 |
| Insurance | 3 735 | 12 | 1.18 | 3 750 | 12 | 1.17 |
| Water charges | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Other expenditure | 2 000 | 6 | 0.63 | 2 200 | 7 | 0.69 |
| Cash farm expenditure | 120 163 | 383 | 37.84 | 120 534 | 384 | 37.58 |
Calculated ratios | | | | | | |
| Economic farm surplus (EFS1) | 23 113 | 74 | 7.28 | 25 564 | 81 | 7.97 |
| Cash farm expenditure/GFR2 | 58% | 57% | ||||
| EFS/total farm capital | 1.2% | 1.3% | ||||
| EFS less interest & lease/equity | – 0.4% | – 0.3% | ||||
| Interest+rent+lease/GFR | 14.5% | 14.4% | ||||
| EFS/GFR | 11.1% | 12.0% |
Notes
1 EFS (or Earnings before interest and tax) is calculated as follows:
gross farm revenue plus change in livestock values less working expenses less
depreciation less wages of management (WOM). WOM 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.
2 Gross farm revenue.
Symbol
f Forecast
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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