in the volatility challenge Tim Mackle Chief Executive DairyNZ Opportunities and challenges Whats happening in our dairy world DairyNZ equipping farmers for the challenges What does this mean on the farm ID: 398269
Download Presentation The PPT/PDF document "Seizing the opportunity" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Seizing the opportunity in the volatility challenge
Tim Mackle
Chief Executive
DairyNZSlide2
Opportunities and challenges
What’s happening in our dairy
world
DairyNZ – equipping farmers for the challenges
What
does this mean on the farm? Slide3
Opportunities and challenges
What’s happening in our dairy
world
DairyNZ – equipping farmers for the challenges
What
does this mean on the farm?
“The only function of economic forecasting is to make astrology look respectable.” – John Kenneth GalbraithSlide4
History repeats?Slide5
Source: DairyNZ Economics Group, UN COMTRADE (World Bank WITS) L
ast cycle we had free-run…Slide6
Confidential to Fonterra
World milk supply…
NZ just 3%World milk production (2009) – 680 million tonnesSource: DairyNZ Economics Group, IFCNSlide7
Leads to volatility – it can be our friend Slide8
Volatility favours the resilientSlide9
Source: DairyNZ Economics Group, IFCN, OECD-FAO
2010-12
Argentina
New Zealand
Uruguay
Ukraine
Australia
USA
EU-27
…but we’ve got to stay competitive to win and thrive…Slide10
Opportunities and challenges
What’s happening in our dairy
world
DairyNZ – equipping farmers for the challenges
What
does this mean on the farm?
What DairyNZ is doing to help build resilience?Slide11
We are not losing sight of..There’s a short-term challenge, but it’s a long term game.
We need to make the right moves.Slide12
Profit from efficiency gains ($/ha)
$50/ha/yearSlide13
Taking on nutrient limit challengesSlide14
Good people build resilienceSlide15
Resilience through researchSlide16
More profit with less environmental impact
Profit
Footprint
<
>
30%
The past
(the last 10 years)
The present
(Research proven)
The research challenge
The farmer challengeSlide17
Opportunities and challenges
What’s happening in our dairy
world
DairyNZ – equipping farmers for the challenges
What
does this mean on the farm?
What DairyNZ is doing to help build resilienceSlide18Slide19Slide20
Tactics for tight
t
imesSlide21
Become fit for the futureSlide22
The execution challengeSlide23
Look after yourselfSlide24
So in summary…We’ve got some challenges, but
tactics are in place at an industry
level.
You need your own plan too.We all need to execute our plans really well if we are to build a resilient industry.Slide25Slide26
NZ Owner Operator - Monthly Cash Flow Assumptions for 2015 16
NorthlandWaikatoBOPTaranakiLNI
Marl-Cant
Westland TasSouthlandCows
298
330377
293392730410
590
Cows/ha
2.432.9
2.92.9
3.52.4
2.9
KgMS/ha8021105
10421097
1054
1490
727
1205
kgMS/cow
334
368
359
378
363
429
363
419
Eff ha
124
110
130
101
135
210
205
205
Total Milk
99,500
121,600
135,500
110,750
142,300
313,000
149,000
247,000
Interest/kgMS *2013/14 DB
$ 1.26
$ 1.15
$ 0.95
$ 1.42
$ 1.05
$ 1.19
$ 1.12
$ 1.31
Total Interest
$ 125,370
$ 139,840
$ 128,725
$ 157,265
$ 149,415
$ 372,470
$ 166,880
$ 323,570
Rent- milking land
$ 18,000
$ 11,000
$ 15,000
$ 10,000
$ 20,000
$ 16,000
$ 12,000
$ 20,000
FWE
$ 4.07
$ 4.20
$ 4.34
$ 3.57
$ 3.74
$ 4.19
$ 4.16
$ 4.08
Cash Deficit
-$25,795
-$22,514
$1,688
$6,337
$42,752
$55,243
-$31,726
-$43,085
Comments
Stock income high in DB- 70c/kgMS. Assume due to beef income. Cost of production also high. Maize silage - 500kgDM/cow. Grow half, purch half in Apr at 32c/kg.
Maize silage - 500kgDM/cow. Grow half, purch half in Apr at 32c/kg.
Other income of $36k. Not sure what this is - beef/ kiwifruit? Maize silage - 500kgDM/cow. Grow half, purch half in Apr at 32c/kg.
Low cost of production but the Naki farmers are highly indebted.
Maize silage - 500kgDM/cow. Grow half, purch half in Apr at 32c/kg.
Cost of production high, but scale results in a lower deficit proportionally compared to the others.
For milk payment - have used Fonterra payout, but no share premium.
Assumptions
Economic Survey 2012 13 season expenditure used.
Where drought has affected production, figures have been adjusted back up to average.
Interest and rent are based on DairyBase 13/14 figures
Tax - has been calculated within the year at the Company Tax Rate of 28%. All farms excepte Westland paying some tax.
These 12 month cash flows are generated using the DairyNZ 2015 16 templates.
There purpose is to show what the expected bank balance will be over the next 12 months for the average farm in your region.
The 12 month cash flow totals will not line up with the Annual Cash Budget, due to a 31 May balance date, GST & small variances in milk payment.