Budget
The farm budget is developed in March every year for sign-off by the Farm Management Committee and St Peter’s 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 then allows us to monitor and explain variances throughout the year.
Our 2022/23 budget has conservative payout based on $1.90 of income still to come from the 2021/22 season and advance payments up to $6.80 for our targeted milk solids production of 160,000 kg for the 2022/23 season. It includes LIC and $0.20/kgMS Fonterra dividend payments.
We are, however, confident of a strong payout and have therefore approved on-going investment in areas of the wagon wheel where we may not see a financial return this season. The most significant is maintaining three full-time staff on the farm to reduce the overall workload on our team and improve quality workplace outcomes. Cow wearable technology that may not save labour costs until 2023/24 season (extra $44k). Other areas include more planting for shade and riparian protection (extra $35k), and increased costs to achieve Te Tihi milk quality goals, like switching 40 t (DM) PKE to 40 t DM grass silage to manage FEI (fat evaluation index), and more somatic cell count (SCC) diagnostics and treatment to ensure we can continue to use 3 n 2 milking (milking three times over two days).
You can find our annual budget below compared to actuals for the 2020/21 season and our budget for the 22/23 season. Commentary notes to explain each budget item can be found on the right hand side. Click on the “2” on the top left hand side to expand all of the expense areas into sub categories. Of note is a change in land area and stock numbers planned for the 22/23 season.
