DairyBase key performance indicators provide checks and challenges for dairy farm manager Stephen (Chappy) McKenzie on the Aratapu drained flats south of Dargaville.
He has diligently entered his figures and comments for the past four seasons and received reports back with benchmarks generated by the averages of 30-60 owner-operator farms in Northland.
“It’s a lot of paperwork, filling in the three levels of questionnaires, but I really like the results and it helps to keep me motivated,” he said.
In recent seasons he has noticed with approval that operating expenses have been consistently lower than the Northland average, which flows on to dairy operating profits that were $400-$900/ha above the benchmarks.
In the 2012-13 season the operating profit margin was 35.7% compared with the Northland DairyBase average for owner-operators of 24.5%.
Farm working expenses were $3.69/kg milksolids (MS) in 2012-13, compared with the provincial average of $4.34.
“We thought we were running a tight ship and haven’t been spending excessively, so it has been great to have that confirmed,” he said.
DairyBase has provided justification for some items of recent capital expenditure including a new tractor and 3m mower/mulcher for pasture control, extensions to the farm dairy and yards, some bridges, and a new effluent pond.
The 2013-14 figures were still being loaded into DairyBase when Dairy Exporter visited but Chappy knew the supplementary feeding costs would be higher because milking continued until May 7 despite drought, encouraged by the high payout forecast.
'We thought it would be good for the judges to have a family-owned entry as well as the large corporates run by their staff members.’
He used twice the tonnage of palm kernel at 140 tonnes compared with the previous season, when the herd dried off at the beginning of April.
Production in 2013-14 was 70,400kg MS from 205 cows compared with 69,873kg MS the season before.
The herd dropped 10 cows last season due to a troublesome mastitis outbreak in spring that followed teat sealing after the earlier drying off time, affecting up to 10% of the herd.
Consequently the animal health costs will also be higher, perhaps $19,000 (27c/kg) compared with $15,000 (21c/kg) the season before.
“We never really got to the bottom of that mastitis problem but this winter has been back to normal, under 5% of cows affected, and the herd has been expanded again to 215 crossbred cows.”
Among the farm achievements have been four consecutive seasons of grade-free certificates from Fonterra proudly displayed, partly attributable to the purity of the farm water supply – two bores and artesian supply.
Chappy is also motivated by the physical KPIs, observing that his farm, while small-to-medium sized, achieves the average stocking rate (2.5), and kilograms of milksolids a hectare (800), and a cow (330).
“My goal is to do 80,000kg and get 400kg/cow MS production on a low-cost system, sticking to grass and not putting in lots of supplements,” he said.
The previous record was 363kg/cow in 2011-12, the one fabulous season out of the past four in western Northland.
Chappy returned to the family farm in 2001 after seven years working at the Dargaville meat plant of Silver Fern Farms. He has now been managing for five seasons, three droughts included.
Steve, May, and Chappy McKenzie on the home farm verandah.
He and Janelle have a son aged 5 and a daughter aged 3, and live in the farmhouse on the neighbouring small farm purchased by parents Steve and May, which effectively doubled the milking platform.
Brother Jeremy McKenzie also works on the property and father Steve is still partly involved.
He and May have been freed up to travel off-farm, especially to iwi events elsewhere in the country.
The enlarged 99ha (86ha effective) Pouto peninsula property has seen consecutive droughts during summer and autumn months of the past two seasons, necessitating more supplementary palm kernel and grass silage.
Soil types are 60% clay, 30% peat and 10% sand with most of the milking platform only a few metres above high tide in the nearby Kaipara Harbour and drained by the Aratapu scheme of channels and flood gates.
The farm is surrounded by kumara growing leases that provide a ready source of grass baleage when paddocks are spelled under pasture cover.
The McKenzies like to make about 125 big round silage bales, or 25 tonnes of dry matter, from the spring surpluses on the farm using local contractors. They also buy 40 tonnes of baleage from neighbouring kumara growers.
A feature of Aratapu dairy farming life for the McKenzies has been the help and mentoring of neighbours during stressful times like the extending of the dairy to 20-a-side herringbone.
They were part of the encouragement to enter this year’s Ahuwhenua Trophy as a Maori family owner-operator dairy farm, providing contrast to the much bigger incorporation and trust entries.
“We thought it would be good for the judges to have a family-owned entry as well as the large corporates run by their staff members,” Chappy said.
DairyBase reports were a cornerstone of the entry documents when the judging team came in mid-February, during the drought.
The McKenzies received good feedback to put more time into strategic planning, such as an intention to be debt-free in 10 years, leading to possible expansion.
Steve and May have farmed there since 1982, first on 50ha effective and now 86ha.
They have five children including Chappy and Jeremy, and the farm will not pass out of the family.
‘We thought we were running a tight ship and haven’t been spending excessively, so it has been great to have that confirmed.’
LIC Farmwise consultant Neil Smith has encouraged the McKenzies to consider different business structures and succession planning.
He also turned Chappy on to pasture monitoring and feed budgeting, which he now carries out with a paddock walk every two weeks and MINDA Land and Feed programme loaded on his mobile phone.
“The present season has started well with no gaps in the feed wedge out front,” Chappy said when about 60% of the cows were in milk.
Average pasture covers were 2200kg/ha DM and feed utilisation was 75-80%.
“When Neil introduced me to pasture monitoring it changed dairy farming for me,” Chappy said.
“I am much more confident now about hitting pre- and post-grazing targets and it has relieved a lot of the worries.”
Off-farm family life revolves around fishing and holidays with the children in the summer and support for the local Southern Rugby Club at Te Kopuru during the winter.
Chappy was a keen player until a neck injury, and Steve remains on the committee.
Key facts
Area: 86ha effective
Cows: 205 2013-14, 215 2014-15
Production: 70,400kg MS 2013-14
Farm working expenses: $3.69/kg MS 2012-13
Operating profit margin: 35.7% 2012-13
