Farm budget the way to go
DairyNZ wants farmers to know it’s not too late to get started on next season’s farm budget and have launched several online tools to make the farm budgeting process easier.
DairyNZ development team leader – people and business, Geoff Taylor, said many dairy farmers had used the new tools over the past few months and had found them very useful.
‘‘We have developed some great templates that take a farmer through the step-bystep process of developing an annual cash budget, monthly cashflow budget, personal budget and more. Plus, we’ve put together guides that teach farmers how to develop these budgets.
‘‘ We’ve used these new templates during our recent series of cashflow budgeting workshops. Hundreds of dairy farmers have found these tools extremely helpful and they are now available on our website,’’ said Mr Taylor.
Dairy farmers can download the new budgeting templates and guides for free at: http://www.dairyn- z.co.nz/budgets. DairyBase manager Dr Adam Barker said he had seen the power of the budgeting process multiplied for those farmers who were also using DairyBase.
‘‘Budgeting is a critical process for any successful business. Putting together a budget allows you to take control of all your decisions.
‘‘ However, where we’re seeing dairy farmers gain even better results is when they use their budget and their DairyBase reports hand-in-hand to make business decisions on farm.
‘‘ For instance, farmers are using DairyBase to benchmark farm working expenses. They can determine if their expenses are above or below the average on other farms and then make decisions to change based on their individual farm business goals.’’
DairyBase is a tool that helps farmers analyse the resources they have, the way they’re using them and, by way of benchmarking, compares their use of resources with other farm businesses. Farmers can register for DairyBase for free at www.dairybase.co.nz or by phoning the DairyBase bureau on 07 858 3890.
DairyNZ top 10 budgeting tips:
Take charge – make sure you own the budget.
Look for trends in your historical records.
Use DairyBase to compare your expenses to other farms.
Start from zero for expenses that concern you to determine required expenditure.
Determine which figures are certain vs estimates.
Allow a contingency for unexpected capital repairs/ replacements.
Use a long-term payout forecast in your budget to ensure your farm is robust over time, then prepare a budget based on next year’s forecast.
Test scenarios: lower than expected production, drop in payout; higher expenses.
Use a trusted outside person as a sounding board.
Give your accountant and banker a copy of your budget.