Almost a generation’s worth of dairy farming data has been captured by DairyNZ’s DairyBase platform as it marks its 20th year of existence this season.
Kicking off in 2005-06, DairyBase launched as a system for collecting dairy farmers’ financial and physical farm data. It came into being just as the internet’s penetration was starting to hook deeper into farm businesses albeit often a slower process, thanks to dial-up modems.
Today the system captures data from about 20% of the country’s dairy farmers, identifying them by region, farm system type (1-5) and overall performance. It provides a way for farmers to compare their financial and physical performance with their peers, within region, system and the country.
Mark Storey, DairyNZ’s head of economics, says 20 years of data collection also makes DairyBase an invaluable long-running longitudinal data base that not only provides dairy farmers with an idea of how they are performing, but also generates industry meta data for identifying trends and doing deep research dives.
His efforts in dissecting the data and comparing farm revenue, cost centres and profitability today against 20 years ago also provide some insights into how the country’s top-performing farmers channel their expenditure.
“Looking back in time to compare the top farmers of 2005-06 with 2022-23, there are some really notable differences in their budgets.”
He said the top quartile farmers in 2022-23 are spending more on feed supplement expenses. Back in 2005-06 that was about 45c/kg milksolids, compared to over a $1.00/kg MS today. Adjusting for inflation that amounts to an additional 80c/kg MS, representing 20% of their operating expenses.
“I think this reflects that in those good payout years farmers were able to optimise their farm’s viability by utilising supplements more intensely.”
He notes, however, that this has tended to subside in recent seasons, partly in response to the inclusion of the Fat Evaluation Index test in 2018.
The overall increase in supplements also partly reflects farmers’ response to some tough seasons. He cites his own family’s experience in north Waikato, where summers can hit hard.
“Supplements have been quite critical for farm performance in the last 10 years and pure grass-fed systems can’t always cut it in those conditions.”
But the fact the top 25% of farmers in 2022-23 also spend about 30c/kg MS more on labour and pasture management than in 2005-06 indicates they are combining good grass management skills with smart supplement use that enhances production, rather than simply replacing grass with bought-in feed and wasting their cheapest resource.
“The top quartile of farmers, by making investments in supplements, labour and pasture management…
“We do have to remember though that operating profit is only one indicator of financial performance, for example it does not reflect expenses like interest costs, which have grown significantly in the past few years.”
Fertiliser costs as an inflation-adjusted percentage of farm costs have also dropped for the top performing farmers, from about 12% of farm expenses in 2005-06 to about 8% in 2022-23.
“We saw especially with the post-Covid- Ukraine conflict price spike how fertiliser use dropped. It is one of the things farmers do have immediate control over and can respond to the quickest. They also have a lot more information now regarding their nitrogen surplus, and understanding what their optimal application is.
“I think there have been some marked signs of improved practices.”
Regionally, Canterbury proves to be the most profitable area to dairy farm in, coming out top for Systems 5, 4 and 3. Bay of Plenty claims the top profitability for System 2, and nationally across all systems, while Taranaki is winner for all-grass System 1 type dairying.
With DairyBase accounting for about 20% of dairy farmers nationally, Storey said it represents a very robust sample providing invaluable industry data cross-tabulated by region and system type.
However, in an effort to get even more farmers on board, DairyNZ is removing the $100 a year fee.
“DairyBase has been a great example of DairyNZ bringing our farm systems and credible evidence-based approach together to benefit all farmers,” said Storey.
