National dairy

Dairy sector percentile analysis

Download the Dairy Sector Percentile Analysis in PDF format [354K PDF]

Data release

Download the National Dairy model in PDF format [422K PDF]

To request printed copies of these documents please contact policy.publications@maf.govt.nz

The national dairy budget depicted below has been constructed via a weighted average of the MAF dairy farm monitoring models. The weighting is based on the number of dairy cows in each region from the 2008 Livestock Improvement survey. The weightings, on the model basis, are as follows:

Northland: 8.0%
Waikato/Bay of Plenty: 41.8%
Taranaki: 12.5%
Lower North Island: 10.2%
Canterbury: 15.5%
Southland: 11.9%

Key points

2008/09

2008/09 was a relatively forgettable year for dairying in New Zealand, coming on the back of variable weather, a significant decline in the payout throughout the 2008/09 season, and a forecast $4.55 payout going into 2009/10.
Nationally, production was up by 9.8 percent compared with 2007/08, with most of this being a post-drought recovery from 2007/08.
Despite the increased production, net cash income dropped 27 percent compared with 2007/08 to $750 000, very much as a result of the drop in the payout, from an original forecast of $7.00 per kilogram of milksolids down to $5.20.
Farm working expenses increased again in 2008/09 to an average of $3.86 per kilogram milksolids, driven by increased feed expenses due to the variable weather, and increased prices pushing up fertiliser expenses.
The average dairy farm finishes the year with a cash loss of $58 500, a 141 percent drop on 2007/08. In the absence of off-farm income, new borrowing, and introduced funds, this loss would be $130 600.

2009/10

Farms in most areas of New Zealand went into the 2009 winter with less than desirable pasture covers and cow condition. While supplementary feed was readily available, the cash to buy it was not.
Despite this, farmers are budgeting for a 3 percent increase in production over 2008/09 levels. This helps somewhat to offset the drop in payout, with the result that net cash income decreases 5 percent to $714 900 in 2009/10.
A significant feature of the 2009/10 budgets was farmers' expectation of decreasing their farm working expenses, which are budgeted to drop by 11 percent, to $3.34 per kilogram milksolids. Major decreases are budgeted for feed, fertiliser, and repairs and maintenance expenses.
The average farm, as depicted by the model, still makes a cash loss of $15 500 in 2009/10. In the absence of off-farm income, new borrowing, and introduced funds, this would grow to almost $40 000.
As a result of the financial losses in 2008/09, the lower than expected payout of $4.55 per kilogram of milksolids in 2009/10, and some uncertainty around the final payout price, farmer morale is subdued.

National dairy model tables and graph

Table 1: Key parameters, financial results and budget for the national dairy model
Table 2: National dairy model budget
Table 3: National dairy model expenditure
Figure 1: National dairy model profitability trends

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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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