Farm advice: Knowing your numbers

Understanding key profit and environmental numbers can create more efficiencies


There’s a lot of policy talk at the moment that has many farmers I’ve heard from considering what they can do now to adapt for the future.

One of my key pieces of advice is to understand what your key profit and environmental numbers are to identify improvements in your farm system. It may seem a little overwhelming, but by breaking it down, you can easily get to grips with your farm numbers and what these mean for your business.

What are the key numbers to know? Some of the environmental key indicators are purchased nitrogen surplus, nitrogen conversion efficiency, emissions per milk solid (GHG/kg MS) and methane, while your profit is analysed through operating profit per hectare.

Where do the numbers come from? Your metrics and farm numbers are calculated from data you have already collected and submitted to your dairy supply company or consultant to meet regulatory requirements.

Those companies then input your information into programmes or models, such as OverseerFM or the AIM model, to calculate your farm’s numbers. Different reports will include different information, but the main ones reported are the ‘key numbers to know’ mentioned above.

What should I do with these numbers? Once you know your numbers, one of the key things to do is benchmark against other farms. This can be done through the environmental reports from your dairy company, which contain benchmarks to help understand where your business fits, compared to others. These benchmarks give an indication of what good looks like so you can see where you need to be if you aren’t already there.

DairyNZ has a range of resources to help, including regional graphs to plot your information on, allowing you to compare your farm at a regional level for operating profit, methane emissions, and purchased nitrogen surplus.

DairyBase also allows you to gain a full analysis of your farm numbers, including benchmarking farm profitability.

What do you do next? You might think everyone operates the same way, but your numbers are not the same as your neighbour’s. So, once you know your numbers, look at your farm system and consider where you can create more efficiencies.Find the areas that need the most attention, such as nitrogen fertiliser, imported feed or effluent, and determine what adjustments can be made to become more efficient and adaptable for future.

For example, a significant driver for methane emissions is total feed eaten, so this may be something to consider on your farm. Any practice that increases feed use efficiency will reduce emissions without affecting farm profitability. This would include reducing the amount of feed going to unproductive animals by improving reproductive performance or reducing feed going to maintenance, by increasing per cow production.

For more information, visit dairynz.co.nz/knowyourumbers.

DairyNZ is running regional benchmarking events in March and April, so keep an eye on your local DairyNZ events calendar and come along.

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