Dairy prof­its down but still high per hectare

Matamata Chronicle - - Rural Delivery - By AN­DREA FOX

Higher op­er­at­ing ex­penses per hectare in an oth­er­wise-spec­tac­u­lar 2011-2012 dairy sea­son re­sulted in farmer owner­op­er­a­tor profit slid­ing by $186 a hectare, a new DairyNZ re­port says.

But the 2011-2012 DairyNZ Eco­nomic Sur­vey said op­er­at­ing profit which de­clined by 6.6 per cent to $2624 per hectare was ‘‘still a high level’’.

DairyNZ said the sea­son was char­ac­terised by an ex­cel­lent sum­mer and au­tumn re­sult­ing in record milk pro­duc­tion for all re­gions.

But off­set­ting the 9.2 per cent in­crease in milk­solids per hectare was a match­ing de­cline in milk prices, leav­ing gross farm rev­enue per hectare al­most un­changed.

The re­port said milk­solids pro­duc­tion per cow rose 30 kilo­grams of milk­solids or 8.8 per cent to 364kg per cow. Like­wise, milk­solids per hectare in­creased by 11.4 per cent or 105kg, to 1028kg per hectare.

In both cases the pre­vi­ous record was set in the 2010-2011 sea­son.

How­ever, DairyNZ warned of a large di­lu­tion ef­fect on per-kilo­gram key per­for­mance in­di­ca­tors be­cause of the large in­crease in milk­solids pro­duc­tion.

While owner-op­er­a­tor op­er­at­ing profit fell slightly on the pre­vi­ous sea­son, it re­mained the third-high­est on record.

Cash op­er­at­ing sur­plus fell by 6.4 per cent or $31,931 to $464,654 per farm.

Slightly lower in­ter­est pay­ments were off­set by in­creased tax pay­ments,

Over­all the $39,081 cash deficit in 2011-2012 fol­lowed a sim­i­lar sized sur­plus in the pre­vi­ous sea­son.

On a per kilo­grams of milk­solids ba­sis, the op­er­at­ing profit of $2.49 was down 43c on the pre­vi­ous year’s very high profit, the re­port said.

The aver­age cost of pro­duc­ing milk (op­er­at­ing ex­penses per kg/milk­solids) de­creased to $4.73/kg, down 22c/kg on the pre­vi­ous sea­son.

Farm work­ing ex­penses also de­clined by 11c/kg to $3.95/kg. For 50:50 sharemilk­ers dairy op­er­at­ing profit per hectare of $1222 was the same as the pre­vi­ous sea­son, the re­port said. Lower milk prices of $3.34/kg and a small in­crease in ex­pen­di­ture were off­set by record milk pro­duc­tion.

Op­er­at­ing costs de­creased 17c/kg milk­solids to $2.81. Aver­age cash op­er­at­ing sur­plus in­creased by 5.2 per cent.

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