Financial Survey 2021: Waikato & BoP Dairy

Agriculture, Dairy, Featured

This report summarises the results of a financial survey of dairy farms across the Waikato and Bay of Plenty regions, carried out by AgFirst through June 2021. A description of the model farm is at the back of the report.

The key points of this report are:

The 2020/21 season was again mixed climatically. A very good 2020 winter was followed by a below average spring,
with good rains in November/December boosting pasture growth and silage made. A dry summer in most parts of the
region was broken by good rains from late March onwards. The 2021 winter has been very good, with pasture covers
and cow condition good on most farms heading into the new season.

• Overall milksolids production is up 2% compared with 2019/20, with farmers budgeting for a similar increase in
2021/22.
• Farm Profit after Tax for the 2020/21 season is up 31% compared with 2019/20, largely due to the improvement in
the payout compared with the 2019/20 season. Farm working expenses have also increased 8%, driven by increased
expenditure across the board.
• The surplus funds have seen a significant lift in capital expenditure, and full principal debt repayment, with the farm
still showing a moderate cash surplus after this – mostly likely to be used for further debt reduction, farm
development, or increased personal spending.
• For 2021/22, the budget is showing a 3% increase in Farm Profit after Tax; a higher payout is offset by an increase in
farm working expenses (5%) and higher tax payments (4%).
• As a result, farmers are budgeting on increased expenditure on capital items, development, debt reduction, and
personal spending. Much of this spending will not take place until the summer/autumn, when the payout is more
certain. Overall, the farm is currently budgeting a “breakeven” situation.
• Farmer morale is good, buoyed by a combination of a higher payout, a good season, and low interest rates. The main downside is a serious labour shortage.

Download the report here: WaikatoBoP Dairy Report 2021.

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