The farm budget is developed in March every year for sign off by the Farm Management Committee and St Peters School as the farm owners. Often this is before the final payout is announced for the season and the predicted payout for the coming season. We build the budget based on the expenses required to meet the Wagon Wheel KPIs and capture quantity and price detail which allows us to then monitor and explain variances throughout the year.
Our 21/22 budget has conservative payout based on $1.34 of income still to come from the 20/21 season and advance payments up to $5.70 for our target milk solids production of 175,000 for the 21/22 season. It does not include any Fonterra dividend payments.
We are however confident in a strong payout and have therefore approved an extra $62,439 spend over last season costs to invest and achieve in areas of our wagon wheel that we may not see a financial return this season. The most significant is returning to 3 fulltimers on the farm to reduce the workload on our team and improve quality workplace outcomes (extra $30k). We are also investing in cow wearable technology that won't save labour costs until 22/23 (extra $22k). Other areas include extra planting for shade and riparian (extra $10k) and increased costs to achieve Te Tihi milk quality goals like switching 40t PKtDM to 40 tDM grass silage to manage FEI, and more SCC diagnostics and treatment to ensure we can continue to use 3 n 2 milking.
You can find our monthly budget below compared to actuals for the 19/20 season. You can select options 1 or 2 on the left hand side to expand the expense areas into more detail or condense them. Commentary notes to explain each budget item can be found on the right hand side once expanded.