- The Waikato/Bay of Plenty intensive sheep and beef farm
- Key points
- Physical factors
- Financial position of the farm
- Issues and trends
- Budget
4 Waikato/Bay of Plenty intensive sheep and beef
The Waikato/Bay of Plenty intensive sheep and beef farm
This model represents farms bounding the predominantly dairying districts of the Waikato/Bay of Plenty region. At 300 hectares in size (effective), the model farm is ideal for finishing beef cattle with a rolling to easy hill contour and volcanic ash soils. This model omits two common enterprises – breeding cows and calf rearing.
The dominant enterprise on the farm is bull beef finishing, combined with steer finishing and dairy grazers. Most of the bulls reach target slaughter weights during their second summer; however, 20 percent of the tail end bulls are carried through a second winter. The farm also trades store steers. Yearling steers are purchased and sold for slaughter at 26 to 30 months (300 kilograms carcass weight). Dairy grazers complete the mix of cattle enterprises, with a mix of dairy heifers carried through on a full-year contract and dairy cows for an eight-week period over the winter.
To remain viable on this class of farm, the sheep flock achieves high performance. The ewe flock is crossed with a high fertility breed, while a blackface terminal sire is used over old ewes and in the third cycle of mating for the younger ewes.
Table 4.1: Waikato/Bay of Plenty intensive sheep and beef model summary, 2005/06
| Effective area (ha) | 300 ha | Total stock units wintered | 3 876 su | |
| Opening stock wintered1 | Breeding cows | 0 hd | ||
| Breeding ewes | 1 230 hd | R1yr cattle | 205 hd | |
| Replacement ewe hoggets | 400 hd | R2yr cattle | 158 hd | |
| Other sheep | 52 hd | Other cattle | 130 hd |
Note
1 Includes grazing stock.
Key points
- The region has enjoyed one of the best autumn weather periods for years.
- While farm productivity generally held, produce prices fell by between 15 and 25 percent.
- Net trading profit fell by 25 percent to $98,700 in 2005/06.
- The costs of production continue to climb.
- Farmers have halved capital purchases from $9,000 in 2004/05 to $4,500 in 2005/06.
- Environmental issues continue to rise in prominence across the region.
Table 4.2: Key parameters of the Waikato/Bay of Plenty intensive sheep and beef model
| 2002/03 | 2003/04 | 2004/05 | 2005/06 | 2006/07f | |
|---|---|---|---|---|---|
| Effective area (ha) | 300 | 300 | 300 | 300 | 300 |
| Opening sheep stock units | 1 456 | 1 499 | 1 545 | 1 546 | 1 546 |
| Opening cattle stock units1 | 1 975 | 1 859 | 1 975 | 2 330 | 2 330 |
| Opening total stock units1 | 3 431 | 3 358 | 3 520 | 3 876 | 3 876 |
| Stocking rate (su/ha) | 11.4 | 11.2 | 11.7 | 12.9 | 12.9 |
| Ewe lambing (%) | 127 | 127 | 132 | 129 | 135 |
| Average lamb price ($/hd) | 61.55 | 61.59 | 63.40 | 54.34 | 56.07 |
| Average wool price ($/kg) | 3.22 | 2.85 | 2.74 | 2.45 | 2.60 |
| Total wool produced (kg) | 7 480 | 7 419 | 7 425 | 6 882 | 6 882 |
| Wool production (kg/ssu2) | 5.10 | 5.00 | 4.81 | 4.45 | 4.45 |
| Average R2yr steer ($/hd) | 840 | 873 | 1 020 | 700 | 805 |
| Gross farm revenue ($) | 259 294 | 265 542 | 298 569 | 269 728 | 279 692 |
| Cash farm surplus ($) | 125 659 | 118 521 | 139 300 | 106 162 | 114 414 |
| Net trading profit ($) | 117 253 | 122 719 | 132 155 | 98 654 | 107 357 |
| Disposable surplus/deficit ($) | 15 148 | 34 444 | 40 301 | 2 364 | 38 571 |
Notes
1 Includes opening grazed stock units from 2005/06.
2 Sheep stock unit.
Symbol
f Forecast
Physical factors
The 2005 winter/spring period will be recorded as one of the best for at least a decade across the region. The relatively warm weather was in stark contrast to the previous two winter/spring periods.
Spring 2005 provided good weather for lambing and calving, which helped improve newborn survival rates, and yielded plenty of feed through to early November. The period from early November to mid-December was dry and feed supplies became pressured for a short period, which reduced lamb weaning weights by one to two kilograms liveweight compared with long-term averages. Ewe liveweights were generally on target with less variability than the previous two years as a result of ewes being well-fed right through the lambing period.
Summer feed supplies (December to February) were excellent and most stock fared well. But a dry March ruined what could have been an exceptional summer and autumn.
Despite plenty of feed in summer, lamb growth rates were well below expectations and dressing out percentages were below normal. This is attributed to poorer quality feed for an extended period and hot humid weather in mid-season.
Soil temperatures and rainfall have been higher than average since December 2005, and pasture covers are entering winter at 1800 kilograms of dry matter per hectare or better, up 200 to 300 kilograms of dry matter per hectare on last year, and more in line with pasture cover levels normally seen. The excellent pasture growth could have resulted in a record early winter pasture cover if it was not for the need to feed a significant number of extra stock carried into late autumn as farmers tried to take advantage of the good feed conditions and gradual improvement in late season prices.
Although feed is plentiful, farmers have resisted the temptation to make extra hay or silage. The extra cost of doing so appears to be acting as a deterrent, and many farmers would rather use extra nitrogen to fill the feed gap. Some farmers continued to use relatively high rates of nitrogen in 2005 to help feed supplies, even in the face of a better season all round.
Hogget mating was more successful for those implementing this policy (around 75 percent of monitored farms) and good lamb survival minimised losses, compared to 2003/04 and 2004/05. For the first time in a number of years very few southerly weather patterns arrived in late spring. Hoggets have again gone to the ram in good condition in autumn 2006.
Winter crops have been generally reported as poor this year due to adverse weather conditions delaying cultivation and planting. Yields could be down 15 to 20 percent on normal and ready for grazing up to three weeks later.
While fly strike provided a significant animal health challenge in January/February, the latter part of the season has been strongly influenced by extra sheep deaths due to Barbers Pole Worm (Haemonchus cortortus) and Salmonella. Both have thrived in the warm moist autumn conditions.
Farmers are anticipating an improved lambing percentage in 2006/07. This
could rival the record levels achieved in autumn 2004/05, which eventuated in a
record lambing rate of 132 percent. The 2005/06 result was down slightly at 129
percent. While scanning results in 2005/06 were down, an excellent lamb survival
rate in spring helped close the gap between the two vastly contrasting seasons
of 2004/05 and 2005/06.
Cattle liveweights are up on those of autumn 2005 and farmers expect to see this
reflected in higher carcass weights next summer. In some areas liveweights on 20
month cattle are up 10 to 15 kilograms on those of 2004 and 2005.
Lamb growth rates post-weaning struggled to reach expectation and many lambs have been sold at 15.5 to 16.0 kilogram carcass weights, similar to last year, which was down slightly on expectations. Farmers report later lambs have finished well in April and May, due to more favourable temperatures and the flush of feed.
Table 4.3: Waikato/Bay of Plenty rainfall
| Jan (mm) | Feb (mm) | Mar (mm) | Apr (mm) | May (mm) | Jun (mm) | Jul (mm) | Aug (mm) | Sep (mm) | Oct (mm) | Nov (mm) | Dec (mm) | Annual (mm) | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ruakura | |||||||||||||
| Mean | 82 | 67 | 87 | 93 | 100 | 118 | 128 | 114 | 101 | 92 | 93 | 92 | 1 166 |
| 2004 | 77 | 220 | 17 | 24 | 118 | 125 | 89 | 96 | 100 | 127 | 80 | 124 | 1 197 |
| 2005 | 45 | 48 | 50 | 31 | 193 | 72 | 138 | 70 | 122 | 159 | 59 | 153 | 1 138 |
| 2006 | 109 | 37 | 79 | 184 | 121 | ||||||||
| Te Puke | |||||||||||||
| Mean | 100 | 101 | 156 | 142 | 114 | 176 | 175 | 158 | 136 | 141 | 116 | 132 | 1 646 |
| 2004 | 84 | 320 | 9 | 191 | 255 | 168 | 286 | 86 | 134 | 187 | 83 | 184 | 1 987 |
| 2005 | 35 | 84 | 157 | 22 | 405 | 125 | 174 | 91 | 62 | 313 | 63 | 165 | 1 696 |
| 2006 | 177 | 131 | 267 | 212 | 168 |
Source
NIWA.
Financial position of the farm
Review of 2005/06
Revenue
Gross farm revenue fell by 10 percent in 2005/06 to $269,700. Prices for lambs were down $9 to $10 per head on average. Wool prices started 2005/06 strongly, but fell sharply to $2.00 to $2.20 per kilogram greasy wool for mid-season main shear lines, before showing some moderate recovery in autumn, giving an average price of $2.45 per kilogram, 11 percent down on last year. The number of lambs sold reduced slightly and cull ewe values were at their lowest level for at least five years.
Benefits from improved product prices due to the drop in the New Zealand dollar failed to materialise in time to help boost revenue to expected levels in 2005/06.
While farmers have generally had a sound year financially, product prices fell by up to 25 percent, and this had a strong impact in the main part of the stock marketing period of December to April.
Cattle trading margins fell to around $300 to $320 per head from $340 to $370 per head in 2004/05. While the schedule dipped sharply from November to January, a more stable market helped hold sale prices right through autumn without the normal “bottoming out” in April/May when cull dairy cattle normally flood the market.
Typical 315 to 320 kilogram two-year-old bull carcasses averaged $950 to $980 per head, down $40 to $60 per head on last year. The replacement cost at $1.60 to $1.70 per kilogram liveweight was similar to last year.
Some cattle and lamb traders are reporting this to be their most difficult season in at least a decade. The average rising two-year steer dropped $300 from the average price surveyed in 2004/05. Lamb traders were particularly affected as many bought store animals on a strong market in December ($1.80 to $2.00 per kilogram liveweight) and watched as the value of the finished product fell significantly over the January to April period when the lambs were ready for marketing.
An autumn shortage of reasonably priced replacement 18 to 20 month cattle has cattle traders worried about securing their full complement of replacements by balance date. As a result, those not willing to take the risk are paying up to $1.80 per kilogram of liveweight, up 5 to 10 percent on expectations, when the meat schedule is sitting at $2.90 to $3.15 per kilogram of carcass weight.
Table 4.4: Waikato/Bay of Plenty Intensive sheep and beef cash farm revenue
| 2002/03 ($) | 2003/04 ($) | 2004/05 ($) | 2005/06 ($) | 2006/07f ($) | |
|---|---|---|---|---|---|
| Sheep sales less purchases | 88 012 | 91 571 | 107 866 | 89 934 | 99 614 |
| Cattle sales less purchases | 116 479 | 125 693 | 143 245 | 135 825 | 135 063 |
| Wool | 24 075 | 21 159 | 20 337 | 16 849 | 17 895 |
| Grazing income | 30 728 | 27 120 | 27 120 | 27 120 | 27 120 |
| Other income | 0 | 0 | 0 | 0 | 0 |
| Gross farm revenue | 259 294 | 265 543 | 298 568 | 269 728 | 279 692 |
Symbol
f Forecast
Expenditure
Farm working expenses for the model increased from $456 per hectare in 2004/05 to $472 per hectare in 2005/06 (3.5 percent). Small increases to many items were overshadowed by larger increases in items such as fuel, electricity, shearing, and rates.
Farmers generally tried to counter these inflationary pressures by reducing the inputs of fertiliser (down 6 percent), and repairs and maintenance (down 10 percent) where possible. In general, farmers put their cheque books away in reaction to product price falls that started in early to mid-summer.
For most of the period 2000 to 2005, development and capital expenses were high on the agenda; these items were generally either deferred or slashed severely during 2005/06, as farmers tried to manage the cash flow within pre-set limits.
Financiers have confirmed that seasonal overdraft levels have run at higher levels than expected for much of the season, and in some cases residual overdraft deficits will be transferred to term loans at the next review.
Drawings have again increased by 10 percent in 2005/06 as the costs of living continue to rise.
Net result
The net trading profit before tax has fallen to its lowest level for a number of years. For the model farm this was $98,700, down 25 percent from 2004/05. While the benefits of investment in their businesses has helped farmers keep ahead of inflation for most of this decade, this was not the case in 2005/06. Across the region farmers are reporting that the 2005/06 net result will be one of the lowest since the mid to late 1990s.
Forecasts for 2006/07
Revenue
Farmers are anticipating that product prices have bottomed out and are on the road to recovery, although they are not expecting the beef returns to show a significant lift. While there is a degree of optimism for 2006/07, farmers are budgeting cautiously at this stage. The anticipated improvement in produce prices is expected to take some time to come to fruition.
The model budget forecasts an increase in gross farm revenue to $279,700. This is largely based on farmers’ expectation that the average lamb price will rise per head and cattle margins may show some small improvement ($20 to $30 per head). Cattle purchases are expected to change from $118,500 to $125,700 on the model, reflecting this higher price per head. Lamb numbers available for sale are also expected to lift slightly on the back of excellent ewe condition at mating, which could result in a record lambing percentage in 2006. Farmers are also hopeful that lamb growth after weaning will improve on that of January to March 2006.
Wool prices are expected to lift by 3 to 7 percent. The budgeted average has been lifted from $2.45 to $2.60 per kilogram greasy.
There is a level of optimism that a lower New Zealand dollar will lift the overall beef schedule, but farmers expect that most of this gain will be eroded by higher replacement costs. The model budget reflects a lift in the average sale price of mixed steers from $954 per head to $980 per head and a similar percentage lift for 20 month bulls.
While the model farm is recovering 10 percent of revenue from grazing, an increasing number of the region’s farmers are relying less on this as a source of income. Grazing prices are not expected to change significantly in 2006/07.
Expenditure
While farmers have again attempted to budget cautiously in 2006/07, when it comes to farm working expenses, there is an expectation that a further 4 to 6 percent lift in the cost of many items is likely. This is especially the case for items such as fuel, casual labour, shearing, rates, and insurance. Farmers have indicated they will attempt to counter such lifts by reducing the amount spent on fertiliser, and repairs and maintenance in order to try to keep expenses at least similar to 2005/06. The model farm budget forecasts an increase in farm working expenses of just over 1 percent to $478 per hectare in 2006/07, compared to $472 per hectare in 2005/06.
If expected product price lifts do not come to fruition, then development and capital expenditure are again likely to be deferred. An expected lift in the cost of living is also reflected in the 2 percent rise in the level of drawings.
As an increasing number of previously fixed-term loans come up for review in 2006/07 there is an expectation that the average costs of servicing the mortgage will rise. Farmers are not confident of a fall in the average rate of interest during 2006/07.
Net result
Whereas 2005/06 produced a net trading profit of $98,700, the 2006/07 result is forecast at $107,400. A reduction in tax payments while cash disposal remains constant gives an increase in disposable surplus to $38,600. Farmers will not commit to spending this until next year’s returns are certain.
Figure 4.1: Waikato/Bay of Plenty intensive sheep and beef profitability trends
Symbol
f Forecast
Issues and trends
Farm productivity remains strong across the region as the on-going benefits of several years of development and capital investment come to fruition. This is expected to continue even as farmers began to scale back such investment programmes in 2005/06.
Across the region the industry views the issue of drench resistance by internal parasites as the major threat to further sustained progress. Despite this factor, there appears to be a mixed response by farmers on adopting preventative health planning and monitoring programmes.
Farmers are expressing a strong level of concern over the rising costs of production and for the first time in half a decade are questioning the value of some inputs. One example is how they intend to use nitrogen in 2006/07. While the higher stocked and more intensive farmers are unlikely to change practices, there is a large group trending towards more strategic nitrogen application planning.
Unless there is a sustained improvement in product prices, and in particular lamb values, farmers are indicating they may consciously spend less on discretionary items such as fertiliser, casual labour, repairs and maintenance, and development/capital in 2006/07. Many farmers feel it is becoming increasingly difficult to squeeze any more production out of their system and, as such, indicate they will reduce costs to help balance the budget.
Despite some reports from the wool industry that prices are on the way to recovery, farmers are not expecting any vast improvements. With shearing now at 50 to 60 percent of the wool cheque, farmers have long since lost confidence in the wool industry. As much as possible, the intensive farmers are aiming to minimise the number of stock, especially lambs, they shear.
Farmers generally feel that the “golden run” of 2000 to 2005 is well and truly behind them and it is now a case of riding through 2006. As such they are holding a cautious approach to 2006/07, but are moving on with some optimism for improved product prices in 2007 as the value of the New Zealand dollar falls. This optimism is somewhat tempered by the realisation that any fall in the New Zealand dollar value may push input prices up to erode some of the anticipated gain.
Environmental issues continue to rise in prominence across the region. Many farmers are using or considering using nutrient budgets, but are looking for their fertiliser programme advisors to lead this process. Farmers feel frustrated by the wide variation in the difference in expectation between rural and urban sectors. Farmers feel they have their feet firmly planted on the ground when it comes to land care management, but can do little to change the emotional interpretation of issues by many non-farming people.
Farmers in some areas are expressing concern about the apparent reduction in representation of rural people on boards with local and regional functions, for example the District Health Board and Environment Waikato.
The conversion of land from forestry to pasture in South Waikato and Bay of Plenty has gained momentum. While most of this land appears destined for dairying, there are a few drystock conversions underway. These tend to be smaller in scale and largely involve adding neighbouring land to existing units. At a cost of more than $3,000 per hectare to convert, it is likely to be adopted in only a limited fashion.
Land prices appear to be holding in the face of poorer financial outcomes in 2005/06. Completed sales have been at $800 to $850 per stock unit with some well-located farms at $900 to $1,000 per stock unit. The number of sales has slowed considerably. Some commentators are regarding the current market to be in the buyers favour rather than the sellers.
There is intense competition amongst banks for a larger share of the rural market. With short-term fixed and floating interest rates at 8.5 to 9.5 percent, drystock farmers are more cautious about the need to borrow than their dairy counterparts. Many in the industry are suggesting that interest rates may not change much over the next 12 to 15 months.
The impact of higher average mortgage interest rates is gradually becoming a reality for a higher proportion of the region’s farmers as their previously fixed-rate loans come up for review. Some farmers are finding the new rate is at least half a percent more.
Further increases in both district council and regional council rates are of major concern to farmers across the Waikato and Bay of Plenty region. In particular concern is for those farming in the Waitomo area, where a recently announced rate increase of 8.3 percent for 2006/07 will hit many hard. Further substantial increases are anticipated in some regions over the next two to three years.
Farmers report a reasonable supply of casual labour but a severe shortage of skilled personnel such as fencers and shearers. Adverse weather during the 2005/06 main ewe and lamb shears did not help ease the already short supply of skilled labour. Shearers themselves have also commented on their concerns at industry trends, particularly regarding the increasing size of many breeding ewes.
Farmers have again reiterated the cost and time required to meet compliance regulations in areas such as ACC, occupational health and safety, environmental matters, and dog licensing.
Table 4.5: Waikato/Bay of Plenty intensive sheep and beef budget
| 2005/06 | 2006/07f | |||||
|---|---|---|---|---|---|---|
| Whole farm ($) | Per ha ($) | Per su ($) | Whole farm ($) | Per ha ($) | Per su ($) | |
Revenue | ||||||
| Sheep | 94 034 | 313 | 60.81 | 102 424 | 341 | |
| Wool | 16 849 | 56 | 10.90 | 17 895 | 60 | |
| Cattle | 254 345 | 848 | 157.98 | 260 775 | 869 | 161.97 |
| Grazing income | 27 120 | 90 | 37.67 | 27 120 | 90 | 7.00 |
| Other farm income | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Less | ||||||
| Sheep purchases | 4 100 | 14 | 2.65 | 2 810 | 9 | 1.82 |
| Cattle purchases | 118 520 | 395 | 73.61 | 125 712 | 419 | 78.08 |
| Gross farm revenue | 269 728 | 899 | 69.58 | 279 692 | 932 | 72.15 |
| Cash farm expenditure | 141 635 | 472 | 36.54 | 143 540 | 478 | 37.03 |
| Interest | 21 932 | 73 | 5.66 | 21 739 | 72 | 5.61 |
| Rent and/or leases | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Cash farm surplus | 106 162 | 354 | 27.39 | 114 414 | 381 | 29.52 |
| Stock value adjustment | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Minus depreciation | 7 508 | 25 | 1.94 | 7 057 | 24 | 1.82 |
| Net trading profit | 98 654 | 329 | 25.45 | 107 357 | 358 | 27.70 |
| Taxation | 37 943 | 126 | 9.79 | 9 922 | 33 | 2.56 |
| Net trading profit after tax | 60 710 | 202 | 15.66 | 97 435 | 325 | 25.14 |
Allocation of funds | ||||||
| Add back depreciation | 7 508 | 25 | 1.94 | 7 057 | 24 | 1.82 |
| Reverse stock value adjustment | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Drawings | 46 000 | 153 | 11.87 | 47 000 | 157 | 12.12 |
| Principal repayments | 8 854 | 30 | 2.28 | 8 421 | 28 | 2.17 |
| Development | 6 500 | 22 | 1.68 | 6 500 | 22 | 1.68 |
| Capital purchases | 4 500 | 15 | 1.16 | 4 000 | 13 | 1.03 |
| Disposable surplus/deficit | 2 364 | 8 | 0.61 | 38 571 | 129 | 9.95 |
Other cash sources | ||||||
| New borrowing | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Off-farm income | 5 000 | 17 | 1.29 | 5 000 | 17 | 1.29 |
| Other cash income | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Net cash change | 7 364 | 25 | 1.90 | 43 571 | 145 | 11.24 |
Assets and liabilities | ||||||
| Farm, forest and building (opening) | 2 956 800 | 9 856 | 762.77 | 2 986 368 | 9 955 | 770.40 |
| Plant and machinery (opening) | 50 055 | 167 | 12.91 | 47 047 | 157 | 12.14 |
| Stock valuation (opening) | 337 489 | 1 125 | 87.06 | 337 489 | 1 125 | 87.06 |
| Total farm capital | 3 344 344 | 11 148 | 862.74 | 3 370 904 | 11 236 | 869.60 |
| Total debt opening | 270 766 | 903 | 69.85 | 261 912 | 873 | 67.57 |
| Equity | 3 073 578 | 10 245 | 792.89 | 3 108 992 | 10 363 | 802.03 |
Symbol
f Forecast
Table 4.6: Waikato/Bay of Plenty intensive 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 | 7 000 | 23 | 1.81 | 7 000 | 23 | 1.81 |
| ACC | 6 088 | 20 | 1.57 | 5 549 | 18 | 1.43 |
| Animal health | 11 048 | 37 | 2.85 | 11 242 | 37 | 2.90 |
| Breeding | 1 047 | 3 | 0.27 | 1 124 | 4 | 0.29 |
| Electricity | 2 970 | 10 | 0.77 | 3 030 | 10 | 0.78 |
| Feed (hay and silage) | 3 500 | 12 | 0.90 | 3 500 | 12 | 0.90 |
| Feed (crops) | 4 200 | 14 | 1.08 | 4 200 | 14 | 1.08 |
| Feed (grazing) | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Feed (other) | 300 | 1 | 0.08 | 300 | 1 | 0.08 |
| Fertiliser | 33 774 | 113 | 8.71 | 34 185 | 114 | 8.82 |
| Lime | 1 200 | 4 | 0.31 | 1 200 | 4 | 0.31 |
| Farm forestry costs | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Freight (not elsewhere deducted) | 2 900 | 10 | 0.75 | 3 100 | 10 | 0.80 |
| Re-grassing costs (contractors) | 4 800 | 16 | 1.24 | 4 800 | 16 | 1.24 |
| Shearing costs (per ssu) | 9 278 | 31 | 6.00 | 9 510 | 32 | 6.15 |
| Weed and pest control | 2 850 | 10 | 0.74 | 2 850 | 10 | 0.74 |
| Fuel | 7 200 | 24 | 1.86 | 7 800 | 26 | 2.01 |
| Vehicle costs (excluding fuel) | 5 200 | 17 | 1.34 | 5 400 | 18 | 1.39 |
| Repairs and maintenance | 14 000 | 47 | 3.61 | 14 000 | 47 | 3.61 |
| Communication costs (phone and mail) | 2 900 | 10 | 0.75 | 3 000 | 10 | 0.77 |
| Accountancy | 3 400 | 11 | 0.88 | 3 400 | 11 | 0.88 |
| Legal and consultancy | 2 000 | 7 | 0.52 | 2 000 | 7 | 0.52 |
| Other administration | 1 900 | 6 | 0.49 | 1 900 | 6 | 0.49 |
| Rates | 8 580 | 29 | 2.21 | 8 950 | 30 | 2.31 |
| Insurance | 3 400 | 11 | 0.88 | 3 400 | 11 | 0.88 |
| Water charges | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Other expenditure | 2 100 | 7 | 0.54 | 2 100 | 7 | 0.54 |
| Cash farm expenditure | 141 635 | 472 | 36.54 | 143 540 | 478 | 37.03 |
Calculated ratios | ||||||
| Economic farm surplus (EFS1) | 56 142 | 187 | 14.48 | 64 387 | 215 | 16.61 |
| Cash farm expenditure/GFR2 | 53% | 51% | ||||
| EFS/total farm capital | 1.7% | 1.9% | ||||
| EFS less interest & lease/equity | 1.1% | 1.4% | ||||
| Interest+rent+lease/GFR | 8.1% | 7.8% | ||||
| EFS/GFR | 20.8% | 23.0% |
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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