{"id":48316,"date":"2022-09-16T14:35:31","date_gmt":"2022-09-16T02:35:31","guid":{"rendered":"https:\/\/www.farmersweekly.co.nz\/?p=48316"},"modified":"2022-09-16T14:53:41","modified_gmt":"2022-09-16T02:53:41","slug":"make-savings-now-before-you-have-to","status":"publish","type":"post","link":"https:\/\/www.farmersweekly.co.nz\/opinion\/make-savings-now-before-you-have-to\/","title":{"rendered":"Make savings now, before you have to"},"content":{"rendered":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>\n

By Paul Bird, DairyNZ solutions and development lead adviser<\/p>\n\n\n\n

Rising costs are a concern for households and businesses across New Zealand, and dairy farmers are also feeling the impact of high inflation. <\/p>\n\n\n\n

Many farms have had cost increases in their budgets of about $1 per kg of milksolids (equivalent to around a 19% lift from 2020-21 average operating expenses). <\/p>\n\n\n\n

Higher fertiliser, feed, wages and fuel costs are some of the key drivers of these increasing costs. <\/p>\n\n\n\n

Managing your budget in times of high inflation isn\u2019t easy. Any savings you can make in the current season will continue into future seasons, so it\u2019s worthwhile being proactive now, before a fall in milk prices requires action. <\/p>\n\n\n\n

We\u2019ve seen farmers prioritise paying off debt in recent years. This has left farmers better positioned to cope with tougher years. Continuing to focus on reducing debt is an excellent strategy to reduce future interest costs, so you can meet higher costs \u2013 or cope with a lower milk payout. <\/p>\n\n\n\n

Benchmarking your business against similar farms can help identify opportunities to save or increase your income. Focus on making incremental gains to boost your income such as improving cow reproductive performance or ensuring you receive all the premiums your dairy company is offering. <\/p>\n\n\n\n

Consider if you can increase milk production from pasture \u2013 the cheapest feed source. You can compare your current pasture use with similar farms using a pasture potential tool<\/a>.<\/p>\n\n\n\n

There may also be opportunities to use pasture, supplements or fertiliser more efficiently. <\/p>\n\n\n\n

You might find zero-based budgeting useful. It involves starting with a blank budget and reviewing each cost. Most farmers can find some savings using this approach.<\/p>\n\n\n\n

If you\u2019re finding it difficult to identify options to manage costs, it can be helpful to involve your farm adviser.<\/p>\n\n\n\n

With costs rising quickly, we encourage contract milkers to run their figures for this season through DairyNZ\u2019s contract milker premium calculator, to check you\u2019ll achieve a reasonable return. <\/p>\n\n\n\n

If contract rates are set too low, both parties should discuss the situation as a first step. Involving professional advisers can also be useful. You might identify opportunities to review contract conditions or to agree on how cost increases can be managed. <\/p>\n\n\n\n

With costs changing rapidly, it\u2019s important to set future contracts based on up-to-date figures, and ensure the contract can accommodate cost increases without penalising contract milkers. <\/p>\n\n\n\n

Also read: High milk prices here to stay<\/a> <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"With dairy farmers are feeling the impact of inflation, it\u2019s worth being proactive on paring costs.\n","protected":false},"author":21,"featured_media":21827,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[4],"tags":[28,110,29,42],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t