Financials

Many of the LUDF costs are fixed for the current season based on the farm system we are running:

Click here for the - LUDF Variance Report - to the end of season 2015/16
Click here for the - LUDF Variance Report - to the end of season 2014/15

Year ending May 31			2015/16 Budget	Actual to end Mar	Budget to End Mar	Variance	Forecast Year End	Notes
Year ending May 31			2015/16 Budget	Actual to end Mar	Budget to End Mar	(Act—budg)	Forecast Year End	Notes
Milk production (kgMS)			280,147	250,437	252,506	-2,069	288,682	1.
		160ha	1751 /ha				1804 /ha
Peak Cow Nos and Prod.			560
Staff			3.7
Income
Milksolid Payout $/kgMS			$3.90
Dividend /share			$0.40/share
Milksolid Revenue			$1,092,573	$976,704	$984,773	-8,069	1,125,860
		Dividend	$112,059	$100,175	$101,002	-828	115,473
Surplus dairy stock			$138,510	$55,505	$138,509	-83,004	114,470	2
DairyNZ Levy			-$10,085	-$9,016	-$9,090	74	-10,011
Stock Purchases			-23,200	-26,960	-26,960	0	-84,960	3
Gross Farm Revenue			$1,309,857	$1,096,408	$1,188,235	-$91,826	$1,260,832
Expenses						$0	0
Cow Costs		Animal Health	$54,200	$48,364	$38,958	$9,406	63,606	4
Breeding Expenses			$39,215	$39,380	$43,921	-$4,541	34,674	5
Replacement grazing & meal			$139,766	$102,828	$111,491	-$8,663	131,103	6
Winter grazing - Herd incl. freight			$200,772	$186,521	$187,022	-$501	200,271
Feed	Grass silage purch.		$70,502	$58,425	$70,502	-$12,077	24,539	7
Silage making & delivery			$9,728	$20,088	$9,728	$10,360	20,088	8
Giberillin			$13,120	$234	$9,120	-$8,886	234	9
Nitrogen			$32,754	$45,093	$43,237	$1,856	45,093	10
Fertiliser & Lime			$33,317	$14,853	$33,317	-$18,464	14,853	11
Irrigation - All Costs			$70,600	$65,767	$63,200	$2,567	73,167
Re-grassing			$25,535	$8,654	$25,535	-$16,881	8,654	12
Staff		Employment	$260,400	$187,554	$216,595	-$29,041	231,359	13
Land		Electricity-farm	$37,200	$21,243	$30,200	-$8,957	28,243	14
		Administration	$24,700	$21,093	$20,842	$251	24,951
Rates & Insurance			$21,020	$21,020	$21,020	$0	21,020
Repairs & Maintenance			$54,500	$30,066	$43,690	-$13,624	40,876	15
Shed Expenses excl. power			$9,850	$8,449	$9,850	-$1,401	8,449
Vehicle Expenses			$31,336	$20,885	$31,336	-$10,451	20,885	16
Weed & Pest			$500	$1,174	$500	$674	1,174
Cash Farm Working Expenses			$1,129,015	$901,691	$1,010,064	-$108,373	$993,238	17
FWE/kgMS			$4.03				$3.44	18
Depreciation est.			$116,000				116,000
Total Operating Expenses			$1,245,015	$901,691	$1,010,064	-$108,373	1,109,238
Dairy Operating Profit			$64,842				$151,594
DOP/ha			$405				$947
Cash Operating Surplus			$180,842				$267,594
Cash Operating Surplus per ha			$1,130				$1,672

Notes to Forecast Year End result:

Milk production forecast as above, 288,652kgMS = 520kgMS/cow
Reduction in total income earned from livestock sales with sale of higher number of empty stock (heifers and MA cows) and sale of a further 18 cows culled for Johnes.
Purchase of 40 replacement heifers was not budgeted, in part the result of attempting to manage with carrying 126 rather than 150 R2yr’s to reduce the grazing costs incurred.
Animal health costs are higher overall with increased expenditure (compared to budget) on Mastitus, teat spray, and small increases across a range of items.
Breeding expenses are lower, largely the result of using bulls rather than AI for the heifers ($2500), and savings in replacement tags and protrack maintenance.
LUDF has not achieved savings in replacement grazing costs (against budget) but was able to reduce expenditure on calf meal and milk powder by $10,000.
High quality grass silage was purchased early in the season at a lower price than budgeted. Due to the reduced forecast milk price purchased silage has not been fed since a little was required in early December. Previously purchased silage not used has been removed from the LUDF expenses and will be purchased again into next seasons accounts.
Additional silage made on the platform has increased silage making costs above budget.
As detailed in the October focus day and October focus day notes, very little GA was applied this season
Effect of application cost of nitrogen not flowing through to initial budget, plus an increase from 150 to 179 kgN applied per hectare.
(Short term) savings from not applying maintenance Phosphate fertiliser (see October Focus day notes).
Minimal regrassing required to patch damaged pastures from early spring grazing, coupled with earlier decision to only regrass 1 paddock rather than 2 has created significant savings in this financial year.
Delayed start to the employment of a new farm assistant reduced staff expenses in June, coupled with a gap between the resignation of our other farm assistant in November and a short term replacement in February has delivered savings in employment expenses, but inhibited some staff leave – thereby contributing to a future cost for the farm.
Silowraps and more efficient refrigeration (investments in 2014-15) are resulting in less electricity usage at the shed compared to past years.
Overall effect of limiting all spending – with small savings across most areas of R&M, except for some repairs associated with the cowshed. R&M has not been deferred if this is likely to result in higher costs in the future.
Price reductions in petrol and diesel contributed nearly $4000 in savings, however the delayed replacement of the 4-wheeler has incurred higher than anticipated maintenance costs for this vehicle. Ute and tractor R&M to date is below budget.
Overall, significant saving to date against budget. The overall expenses however be considered in light of the required level of fertiliser, regrassing, R&M etc to maintain the ongoing productivity of the farm.
Dairy Operating Profit and Cash Surplus are significantly higher than budgeted as the combined result of a ‘survival focus’ (point 16) and 3% higher production. As shown above, the farms performance is sensitive to production with every additional 5000kgMS diluting farm working expenses by approximately 6 cents/kgMS.