- The Central North Island hill country sheep and beef farm
- Key points
- Physical factors
- Financial position of the farm
- Issues and trends
- Budget
5 Central North Island hill country sheep and beef
The Central North Island hill country sheep and beef farm
This model covers a range of hill country across the central area of the North Island. It includes the Waitomo, Ruapehu, Taupo, Wanganui, and Rangitikei districts, as well as the Taranaki region. The model represents larger-scale units running breeding ewes and cows, with the vast majority of stock sold prime, and some sold locally on the store market. The area represented generally experiences a moist summer with a long, cool winter.
Breeding performance is currently around 105 to 140 percent lambing and 85 to 95 percent calving. Prime lambs are sold at 15 to 16 kilograms carcass weight and prime steers are retained to 24 to 30 months.
Wool production is around five kilograms per sheep stock unit wintered. Bull beef production also features on many of the hill country farms represented by this model.
Table 5.1: Central North Island hill country sheep and beef model summary, 2005/06
| Effective area | 550 ha | Total stock units wintered | 5 681 su | |
| Opening stock wintered | Breeding cows | 145 hd | ||
| Breeding ewes | 3 000 hd | R1yr cattle | 142 hd | |
| Replacement ewe hoggets | 850 hd | R2yr cattle | 114 hd | |
| Other sheep | 70 hd | Other cattle | 5 hd |
Key points
- Climatically the season had a good start and finish but conditions were variable mid-season.
- Farmers are tending to increase sheep numbers and hold cattle numbers.
- 2005/06 cash farm revenue dropped 7 percent, due to the drop in lamb price and despite a record high lambing percentage.
- The drop in income coupled with an 8 percent increase in farm working expenses, high tax and no reduction in capital spending resulted in a net cash loss of $39,000 for the 2005/06 year.
- Profitability is expected to return in 2006/07 due to improved lamb prices, reduced taxation payments and reduced capital spending.
Table 5.2: Key parameters of the Central North Island hill country sheep and beef model
| 2002/03 | 2003/04 | 2004/05 | 2005/06 | 2006/07f | |
|---|---|---|---|---|---|
| Effective area (ha) | 550 | 550 | 550 | 550 | 550 |
| Opening sheep stock units | 3 308 | 3 454 | 3 459 | 3 648 | 3 750 |
| Opening cattle stock units | 2 037 | 2 045 | 2 045 | 2 033 | 2 033 |
| Opening total stock units | 5 345 | 5 499 | 5 504 | 5 681 | 5 783 |
| Stocking rate (su/ha) | 9.7 | 10.0 | 10.0 | 10.3 | 10.5 |
| Ewe lambing (%) | 121 | 113 | 122 | 124 | 124 |
| Average lamb price ($/hd) | 55.03 | 58.64 | 59.61 | 49.70 | 52.72 |
| Average wool price ($/kg) | 3.25 | 2.78 | 2.84 | 2.46 | 2.62 |
| Total wool produced (kg) | 18 044 | 18 065 | 17 512 | 18 385 | 18 749 |
| Wool production (kg/ssu1) | 5.5 | 5.2 | 5.1 | 5.0 | 5.0 |
| Average R2yr steer ($/hd) | 736 | 671 | 806 | 791 | 787 |
| Average cull cow ($/hd) | 477 | 529 | 559 | 558 | 557 |
| Gross farm revenue ($) | 287 592 | 307 362 | 321 779 | 301 776 | 325 655 |
| Cash farm surplus ($) | 103 367 | 119 854 | 130 731 | 95 726 | 118 988 |
| Net trading profit ($) | 108 953 | 105 700 | 132 155 | 87 515 | 101 434 |
| Disposable surplus/deficit ($) | – 6 610 | 10 007 | 16 142 | – 39 115 | 60 408 |
Note
1 Sheep stock unit.
Symbol
f Forecast
Physical factors
Overall climatically, the 2005/06 season started well and finished well, but with some variability in the middle. Over most of the region, a good 2005 autumn and early winter set many farms up well for the winter period. Pasture production was sufficient and overall quality was excellent following the dryer summer and early autumn period. This continued through the later winter period and into spring, where good pasture growth meant breeding ewes had a strong start to the lambing season. Mild climatic conditions through early spring resulted in a good lamb survival rate. While scanning percentages had been down on the previous year, the good survival rate saw a record high lambing percent of 124, a lift of 2 percent over the previous year’s high result. The good early spring meant that in some flocks ewes were overfed, resulting in some nutritional imbalances when the feed situation tightened later in the spring.
Climatic conditions from October through to December 2005 in the upper half of the region were varied, and a cool period through mid to late October resulted in poor pasture growth and a drop in stock feeding levels. On many farms true adlib feeding was not able to occur until late November. This had a significant impact on lamb growth rates, resulting in a one to 1.5 kilogram drop in weaning weights in many lamb flocks. It also affected the growth of many newborn calves.
A dry period then hit the region, particularly in the southern half of the region, resulting in this weight never being gained. The dry conditions and lack of quality feed also meant lamb killing out percentages were down in many cases – 2 to 3 percent on average. This difficulty in growing lambs, compounded by the drop in the schedule, meant many were held to be finished later in the season. While many farms achieved an average lamb carcass weight similar to last season, this was only achieved by delaying sales by 30 to 45 days behind the 2004/05 season. Farmers also had difficulty in finishing cattle, and again many held stock until later into the season. On many farms cattle liveweights made up significant ground over the autumn and stock were around 10 kilograms heavier heading into the 2006 winter. The dry spell broke in late March/early April, and good autumn conditions saw strong pasture growth.
Calving percent on the monitored farms lifted back to a more normal 90 percent following the drop to 83 percent in 2005. Cows were in good condition at calving and over the spring, and empty rates in breeding cows appear to have dropped. Farmers are predicting a similar 90 percent calving in the 2006/07 season. Cattle numbers have held very steady on monitored farms over the last two to three years, and there is no forecast change in cattle numbers for the 2006/07 season. Contrasted with this, many farms are slowly lifting sheep numbers, with an average 3 percent lift in breeding ewe numbers over the 2005/06 year, but these numbers are then forecast to hold steady over the upcoming 2006/07 year.
Salmonella was prevalent in most sheep flocks throughout the region, with many farmers now vaccinating for this. A number of farmers also noted a relatively high level of viral pneumonia in lambs. Many farmers also noted marginal copper levels in cattle, which can be related to the level of feeding over the spring and early summer period. A number of farmers reported some swayback in lambs, which is related to low copper levels. An increase in incidents of liver fluke in cattle, particularly in the dry areas over the summer has also been reported. Internal parasite control is a problem for all farms, with many farmers now much more aware of drench resistance problems and testing for this. The last two winters have been relatively mild, which will have assisted worm survival rates.
On the weed front, there were some good crops of thistles throughout the region, particularly in the upper half. The weed tutsan has become particularly prevalent in the northern areas, and is proving to be a very difficult weed to control, generally spreading along roadways, riverbanks and in areas not grazed by cattle.
While the autumn was wetter than average, the rainfall received was spread evenly over the period. With warm temperatures, this resulted in very good pasture growth. Farms are now very well set up for the 2006 winter and most stock are in good condition. A cold snap in early June has lowered soil temperatures to below that of previous years, which could be a forerunner of a long winter.
Table 5.3: Central North Island 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) | Total (mm) | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Taumarunui | |||||||||||||
| Mean | 101 | 95 | 86 | 112 | 137 | 146 | 136 | 133 | 129 | 141 | 130 | 124 | 1 470 |
| 2004 | 106 | 412 | 28 | 60 | 149 | 257 | 120 | 165 | 140 | 184 | 109 | 203 | 1 932 |
| 2005 | 55 | 118 | 92 | 53 | 162 | 73 | 125 | 81 | 148 | 162 | 36 | 228 | 1 332 |
| 2006 | 90 | 68 | 65 | 177 | 126 | ||||||||
Ohakune | 98 | 100 | 72 | 114 | 115 | 132 | 131 | 113 | 138 | 127 | 144 | 122 | 1 459 |
| Mean | 98 | 100 | 72 | 114 | 115 | 132 | 131 | 113 | 138 | 127 | 144 | 122 | 1 459 |
| 2004 | 76 | 378 | 30 | 43 | 98 | 185 | 105 | 159 | 129 | 148 | 111 | 153 | 1 614 |
| 2005 | NA | 77 | 148 | 56 | 114 | 96 | NA | 61 | 139 | 199 | 50 | 129 | 1 068 |
| 2006 | 133 | 58 | 80 | 149 | |||||||||
Taihape | |||||||||||||
| Mean | 73 | 63 | 68 | 71 | 87 | 83 | 86 | 75 | 79 | 83 | 71 | 87 | 927 |
| 2004 | 65 | 244 | 26 | 28 | 68 | 185 | 90 | 90 | 63 | 72 | 66 | 156 | 1 153 |
| 2005 | 50 | 21 | 82 | 50 | 68 | 71 | 48 | 33 | 98 | 106 | 39 | 128 | 793 |
| 2006 | 81 | 39 | 70 | 129 | 68 |
Source
NIWA.
Financial position of the farm
Review of 2005/06
Revenue
Gross farm revenue for 2005/06 dropped 6 percent compared with 2004/05. This was largely due to the decrease in returns for lambs. Most farms represented by this model are heavily reliant on lamb income, and the significant mid-season drop in the lamb schedule had a heavy influence on revenue streams. Over the farms monitored, prime lambs averaged $52.90, while store lambs averaged $43.40. On average, farms sold 33 percent of their lambs store. Overall, average lamb price was $49.70, down $9.90 on 2004/05.
Cull ewe prices dropped back around $5.00 per head on 2004/05 values, averaging $44.60 per head. Overall, net sheep income dropped 8 percent compared with 2004/05.
Wool returns slipped significantly, averaging $2.46 per kilogram compared with $2.84 per kilogram in 2004/05, with average wool production per sheep stock unit remaining around five kilograms. On the monitored farms prices across the whole clip varied from $2.10 to $2.77 per kilogram depending on wool quality and time of sale.
Beef schedules also decreased slightly due to decreasing overseas prices, but recovered in the latter part of the season. Overall, prices achieved for cattle this year have been very similar to those achieved last year. Culled cows averaged $558 compared with $559 in 2004/05, and rising three-year steers average $1,005 compared with $1,065 in 2004/05. Weaner cattle prices have remained high, consistently averaging $2.20 to $2.40 per kilogram liveweight, which has been positive for the breeding sector but has resulted in a tightening of trading margins.
Table 5.4: Central North Island hill country sheep and beef cash farm revenue
| 2002/03 ($) | 2003/04 ($) | 2004/05 ($) | 2005/06 ($) | 2006/07f ($) | |
|---|---|---|---|---|---|
| Sheep sales less purchases | 154 788 | 165 503 | 170 352 | 155 995 | 175 733 |
| Cattle sales less purchases | 74 179 | 91 710 | 101 767 | 100 597 | 100 711 |
| Wool | 58 625 | 50 149 | 49 660 | 45 185 | 49 211 |
| Grazing income | 0 | 0 | 0 | 0 | 0 |
| Other income | 0 | 0 | 0 | 0 | 0 |
| Gross farm revenue | 287 592 | 307 362 | 321 779 | 301 776 | 325 655 |
Symbol
f Forecast
Expenditure
Overall, farm working expenditure for 2005/06 is up 8 percent compared to 2004/05, due to increased spending and costs in many areas.
Animal health costs lifted almost 10 percent on a per stock unit basis, mostly a reflection of increased prices for drenches and vaccines. On the monitored farms, the average animal health spending was $3.05 per stock unit, ranging from $1.24 through to $4.51 per stock unit.
Fertiliser expenditure also lifted slightly, mainly a reflection of increased fertiliser prices. The model is still applying 29 kilograms of phosphorous per hectare and 27 kilograms of sulphur per hectare, which is slightly above maintenance requirements. It is also applying some nitrogen in the form of di-ammonium phosphate over a portion of the property.
Shearing costs lifted a total of 17 percent, largely due to the increase in shearing wage rates. Spending on repairs and maintenance dropped back slightly, following several years of high expenditure in this area. Interest costs also climbed slightly due to increasing interest rates.
The model paid significantly more tax this season, a direct reflection of a good income year in 2004/05. Many properties paid more tax than was necessary, which will reduce tax payments in 2006/07. Most did not take the opportunity to reassess provisional taxation to reduce this over-payment.
Net result
Overall, the disposable result from the farm business has deteriorated significantly to a deficit of $39,000 compared to a surplus of $16,000 in 2004/05. This is a direct result of a combined drop in lamb returns, increase in cash farm expenditure and over-payment of taxation. While this is a significant change from 2004/05, the model has been reasonably profitable over the last five years, and most farmers will either carry the loss as increased overdraft into the new year, or convert some of this to term debt.
Forecasts for 2006/07
Revenue
Gross farm revenue is forecast to lift by 8 percent compared with 2005/06, mainly driven by an expected better return in lamb prices.
Returns from sheep are forecast to lift 13 percent, a combination of an expected lift in lamb prices and an expectation that a greater proportion (75 percent) will be sold prime. The overall average price budgeted for lamb is $52.70 per head, up $3.00 on 2005/06. Many farmers are budgeting relatively conservatively on lamb prices, at around $55.00 per head for a prime lamb, up $2.00 per head on 2005/06, but are quietly expecting prices to be up to $5.00 per head better.
Farmers expect a similar lambing result to 2005/06, of around 124 percent. Many farmers recognise the extremely good weather over the previous lambing period led to excellent lamb survival and that this will not always be the case. While there has been further gain in flock liveweight going into the 2006 mating period, a more normal spring may counter the advantage of this.
Wool is also expected to make some recovery, with farmers budgeting for an average return of $2.62 per kilogram, up 6.5 percent compared with 2005/06. This lift in price is expected due mainly to a decline in the value of the New Zealand dollar.
Farmers are budgeting for very similar returns from cattle as those achieved in the 2005/06 season. Rising three-year steers are budgeted at $990 per head compared with $1,005 per head in 2005/06. Returns from rising two-year bulls are expected to lift by $20 to $30 per head.
Expenditure
Farm working expenditure is budgeted to be down slightly compared with 2005/06. While some increases have been allowed for in areas such as animal health, shearing, and fuel, expenditure in other areas such as fertiliser, and repairs and maintenance have been reduced. With fertiliser, farmers have budgeted for increases in prices, and have correspondingly reduced the total amount of fertiliser applied. The model has reduced nutrient inputs down to 26 kilograms of phosphorous per hectare and 24 kilograms of sulphur per hectare. Nitrogen application has also been trimmed back slightly.
Interest costs have risen, mainly due to the high level of overdraft carried into the season.
Taxation reduced significantly, with the model actually achieving a small refund, on the back of the overpayment of taxation in 2005/06. Farmers have also scaled back expectations on any capital purchases, although this is likely to be reviewed later in the season.
Net result
The model is anticipating a healthy disposable surplus of around $60,000. This is mainly due to a reduction of tax of $50,000, but also farmers are budgeting quite conservatively because of their experiences over the 2005/06 season. Many farmers will look to review their budget in late summer or early autumn, and if this surplus is likely to be achieved they will revise their expenditure accordingly. The surplus could be used to cover the increased overdraft, increased on-farm spending, or off-farm investment.
Figure 5.1: Central North Island hill country sheep and beef profitability trends
Issues and trends
Facing rising costs in many areas, farmers are looking at ways to economise or hold their expenditure. With fertiliser being the biggest expenditure item, there is more of a focus on making efficient use of the nutrients applied. Following several years of above maintenance inputs, there is a distinct trend to drop fertiliser applications back to an assessed maintenance level. Nitrogen is also becoming a more discretionary item for many who have been applying small amounts previously. Farmers are looking to ensure they get a direct return from any applications. There is also some interest in applications of potash by some farmers.
While composite sheep breeds still remain popular, there appears to be a drift out of using Finnish Landrace and East Friesian breeds and a drift back to Romney or other traditional breeds. In noting this, there is a growing demand for high performing composite ewe hoggets. Now that fertility levels have lifted, farmers are looking more towards lamb survival and lamb growth rates and in some areas are looking to introduce some Perendale genetics.
Given the low returns from wool and high cost of shearing, there is a trend away from shearing twice a year towards eight-month shearing, or even once-a-year, although there is a concern at the likely impacts on wool quality, for example cotts and yellowing from once-a-year shearing. There appears to be less interest in re-grassing and summer cropping, although there is still a lot of winter cropping carried out for development and re-grassing purposes.
A number of the larger towns in the region report increasing demand for subdivision into lifestyle blocks and for housing in the urban areas. Overall this is seen as a positive factor, given that many of the districts are facing population declines.
Farmers report possum numbers building up in a number of areas, but note that the bovine tuberculosis (Tb) incidents remain low. Rabbit numbers also appear to be building up in some areas, but this is very variable.
People in the servicing industry have noted that a lot of farmers are more stressed than in previous years. This is a result of having to work harder, and in many cases of operating a more complicated management system. The intensification and complication of farming systems is also compounded by trying to get labour to assist. There is an increasing level of “red tape”, for example Tb movement cards, Resource Management Act consents, and complying with holiday legislation with respect to labour. In many incidences this latter factor has meant the farmers giving the employee the statutory days off and doing the work themselves.
There is increasing interest in equity sharing as a means for younger people to get into farming, or for managers to share in the profitability of the farming operation. The King Country has the highest level of sheep and beef farms involved in equity sharing.
Availability of labour remains an issue at the on-farm level. Contractors such as shearers and fencers continue to be in short supply, as do shepherds with good dogs.
While many farmers are interested in environmental issues, the concept of sustainable land management as promulgated by regional councils is seen by many as more of a regulatory threat. Many are interested in the concept of farm plans, but note that the regional councils do not have the resources to service demand. Some farmers note that on the erodible sedimentary hill country there is a need for “tools” such as plants that stabilise the soil but are palatable to stock. They feel that the current high land prices are forcing intensification of farming systems and that these systems are not sustainable in the long term.
Land prices remain relatively stable, although there has been some indication of softening over the past season. With the expected improvement in profitability occurring in 2006/07, many feel that it is unlikely that land prices will drop.
Table 5.5: Central North Island hill country sheep and beef budget
| 2005/06 | 2006/07f | |||||
|---|---|---|---|---|---|---|
| Whole farm ($) | Per ha ($) | Per su ($) | Whole farm ($) | Per ha ($) | Per su ($) | |
Revenue | ||||||
| Sheep | 162 511 | 295 | 44.55 | 183 005 | 333 | 48.80 |
| Wool | 45 185 | 82 | 12.39 | 49 211 | 89 | 13.12 |
| Cattle | 113 932 | 207 | 56.04 | 114 486 | 208 | 56.31 |
| Grazing income | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Other farm income | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Less | ||||||
| Sheep purchases | 6 516 | 12 | 1.79 | 7 272 | 13 | 1.94 |
| Cattle purchases | 13 335 | 24 | 6.56 | 13 775 | 25 | 6.78 |
| Gross farm revenue | 301 776 | 549 | 53.12 | 325 655 | 592 | 56.31 |
| Cash farm expenditure | 179 560 | 326 | 31.61 | 177 317 | 322 | 30.66 |
| Interest | 26 490 | 48 | 4.66 | 29 350 | 53 | 5.08 |
| Rent and/or leases | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Cash farm surplus | 95 726 | 174 | 16.85 | 118 988 | 216 | 20.58 |
| Stock value adjustment | 8 414 | 15 | 1.48 | 1 627 | 3 | 0.28 |
| Minus depreciation | 16 625 | 30 | 2.93 | 19 180 | 35 | 3.32 |
| Net trading profit | 87 515 | 159 | 15.41 | 101 434 | 184 | 17.54 |
| Taxation | 49 440 | 90 | 8.70 | – 394 | – 1 | – 0.07 |
| Net trading profit after tax | 38 075 | 69 | 6.70 | 101 828 | 185 | 17.61 |
Allocation of funds | ||||||
| Add back depreciation | 16 625 | 30 | 2.93 | 19 180 | 35 | 3.32 |
| Reverse stock value adjustment | – 8 414 | – 15 | – 1.48 | – 1 627 | – 3 | – 0.28 |
| Drawings | 42 036 | 76 | 7.40 | 42 214 | 77 | 7.30 |
| Principal repayments | 9 351 | 17 | 1.65 | 9 170 | 17 | 1.59 |
| Development | 4 317 | 8 | 0.76 | 4 973 | 9 | 0.86 |
| Capital purchases | 29 697 | 54 | 5.23 | 2 616 | 5 | 0.45 |
| Disposable surplus/deficit | – 39 115 | – 71 | – 6.89 | 60 408 | 110 | 10.45 |
Other cash sources | ||||||
| New borrowing | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Off-farm income | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Other cash income | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Net cash change | – 39 115 | – 71 | – 6.89 | 60 408 | 110 | 10.45 |
Assets and liabilities | ||||||
| Farm, forest and building (opening) | 3 290 000 | 5 982 | 579.17 | 3 290 000 | 5 982 | 568.93 |
| Plant and machinery (opening) | 79 146 | 144 | 13.93 | 96 971 | 176 | 16.77 |
| Stock valuation (opening) | 554 231 | 1 008 | 97.57 | 562 645 | 1 023 | 97.30 |
| Total farm capital | 3 923 377 | 7 133 | 690.67 | 3 949 616 | 7 181 | 683.00 |
| Total debt opening | 300 000 | 545 | 52.81 | 320 000 | 582 | 55.34 |
| Equity | 3 623 377 | 6 588 | 637.86 | 3 629 616 | 6 599 | 627.66 |
Symbol
f Forecast
Table 5.6: Central North Island hill country 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 | 9 373 | 17 | 1.65 | 8 616 | 16 | 1.49 |
| ACC | 6 018 | 11 | 1.06 | 4 811 | 9 | 0.83 |
| Animal health | 17 326 | 32 | 3.05 | 18 042 | 33 | 3.12 |
| Breeding | 1 931 | 4 | 0.34 | 1 966 | 4 | 0.34 |
| Electricity | 2 727 | 5 | 0.48 | 3 065 | 6 | 0.53 |
| Feed (hay and silage) | 3 124 | 6 | 0.55 | 2 776 | 5 | 0.48 |
| Feed (crops) | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Feed (grazing) | 341 | 1 | 0.06 | 0 | 0 | 0.00 |
| Feed (other) | 2 102 | 4 | 0.37 | 2 082 | 4 | 0.36 |
| Fertiliser | 46 250 | 84 | 8.14 | 44 710 | 81 | 7.73 |
| Lime | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Farm forestry costs | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Freight (not elsewhere deducted) | 3 806 | 7 | 0.67 | 3 874 | 7 | 0.67 |
| Re-grassing costs (contractors) | 3 465 | 6 | 0.61 | 2 891 | 5 | 0.50 |
| Shearing costs (per ssu) | 26 520 | 48 | 7.27 | 27 350 | 50 | 7.29 |
| Weed and pest control | 6 305 | 11 | 1.11 | 6 130 | 11 | 1.06 |
| Fuel | 6 021 | 11 | 1.06 | 7 171 | 13 | 1.24 |
| Vehicle costs (excluding fuel) | 5 453 | 10 | 0.96 | 5 320 | 10 | 0.92 |
| Repairs and maintenance | 18 007 | 33 | 3.17 | 17 175 | 31 | 2.97 |
| Communication costs (phone and mail) | 1 931 | 4 | 0.34 | 1 908 | 3 | 0.33 |
| Accountancy | 2 897 | 5 | 0.51 | 2 776 | 5 | 0.48 |
| Legal and consultancy | 1 875 | 3 | 0.33 | 1 850 | 3 | 0.32 |
| Other administration | 1 193 | 2 | 0.21 | 1 214 | 2 | 0.21 |
| Rates | 7 669 | 14 | 1.35 | 8 443 | 15 | 1.46 |
| Insurance | 3 465 | 6 | 0.61 | 3 585 | 7 | 0.62 |
| Water charges | 0 | 0 | 0.00 | 0 | 0 | 0.00 |
| Other expenditure | 1 761 | 3 | 0.31 | 1 561 | 3 | 0.27 |
| Cash farm expenditure | 179 560 | 326 | 31.61 | 177 317 | 322 | 30.66 |
Calculated ratios | ||||||
| Economic farm surplus (EFS1) | 43 771 | 80 | 7.71 | 60 288 | 110 | 10.43 |
| Cash farm expenditure/GFR2 | 60% | 54% | ||||
| EFS/total farm capital | 1.1% | 1.5% | ||||
| EFS less interest & lease/equity | 0.5% | 0.9% | ||||
| Interest+rent+lease/GFR | 8.8% | 9.0% | ||||
| EFS/GFR | 14.5% | 18.5% |
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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