AN ECONOMIC SURVEY
OF NEW ZEALAND
TOWN M I L K PRODUCERS
R.G.
MOFFITT
RESEARCH REPORT NO. 190
OCTOBER 1 9 8 7
ISSN 0069-3790
The Agribusiness and Economics Research Unit (AERU)
operates from Lincoln College providing research expertise for
a wide range of organisations concerned with production,
processing, distribution, finance and marketing.
The AERU operates as a semi-commercial research agency.
Research contracts are carried out for clients on a commercial
basis and University research is supported by the AERU through ,,
sponsorship of postgraduate research programmes. Research
clients include Government 'Departments, both within New
Zealand and from other countries, international agencies, New
Zealand companies and organisations, individuals and farmers.
Research results are presented through private client reports,
where this is required, and through the publication system
operated by the AERU. Two publication series are supported:
Research Reports and Discussion Papers.
The AERU operates as a research co-ordinating body for the
Auricultural Economics and Marketing Department and the
~ e ~ a r t m eof
n tFarm and Property ~anagement,Accounting and
50
Valuation. This means that a total staff of aooroximatelv
..
professional people is potentially available to work on research
projects. A wide diversity of expertise is therefore available for
the AERU.
The major'research areas supported by the AERU include trade
policy, marketing (both institutional and consumer), accounting,
finance, management, agricultural economics and rural
sociology. In addition to the research activities, the AERU
supports conferences and seminars on topical issues and AERU
staff are involved in a wide range of professional and College
related extension activities.
Founded as the Agricultural Economics Research Unit in 1962
from an annual grant provided by the Department of Scientific
and Industrial ~ e s e a r c h(DSIR), the AERU has grown to become
an indeoendent, maior source of business and economic research
was discontinued in 1986 and from April
expertise.
1987, in recognition of the development of a wider research
activity in the agribusiness sector, the name of the organisation
was changed to the Agribusiness and Economics Research Unit.
General policy direction is provided by an AERU Review
Committee which meets annually. An AERU Management
Committee comprised of the Principal, the Professors of the two
associated departments, and the AERU Director and Assistant
Director administers the general Unit policy.
fund fund in^
AERU REVIEW COMMITTEE
Professor B J Ross, M.Agr.Sc.
(Principal, Lincoln College)
Professor R H Juchau, B.Com., B.Ed., M.A.
(Professor of Accounting and Finance, Lincoln College)
Professor A C ayner, B.Com. (Hons), M.Soc.Sc.
(Profes or of Agricultural Economics, Lincoln College)
P G Bushnell, B.Agr.Sc., M.Agr.Sc., Ph.D.
(Director, Economics Division, Ministry of Agriculture and
Fisheries)
B D Chamberlain
(President, Federated Farmers of New Zealand)
R T J Clarke, M.Sc., Ph.D.
(Chief Director, Department of Scientific and Industrial
Research)
3
E J Neilson, C.B.E., B.A., B.Com., F.C.A., F.C.I.S.
(Lincoln College Council)
P J Rankin, M.A., M.P.A.
(Director, New Zealand Planning Council)
P Shirtcliffe, B.Com., A.C.A.
(Nominee of Review Committee)
J G Pryde, O.B.E., M.A., F.N.Z.I.M.
(Director, Agribusiness and Economics Research Unit)
(ex officio)
R L Sheppard, B.Agr.Sc. (Hons), B.B.S.
(Assistant Director, Agribusiness and Economics
Research Unit) (ex officio)
AERU MANAGEMENT COMMITTEE 1987
Professor A C Bywater, B.Sc., PL.D.
(Professor of Farm Management)
Professor R H Juchau, B.Com., B.Ed., M.A.
(Professor of Accounting and Finance)
Professor A C Rayner, B.Com. (Hons), M.Soc.Sc.
(Professor of Agricultural Economics)
AERU STAFF 1987
Director
J G Pryde, O.B.E., M.A., F.N.Z.I.M.
Assistant Director
R L Sheppard, B.Agr.Sc. (Hons), B.B.S.
Visiting Research Fellows
G R Griffith, B.Ag.Ec., M.Ec., Ph.D.
Professor L T Wallace, Ph.D.
Senior Research Economist
S K Martin, B.Econ., M.A. (Hons), Ph.D., Dip. Tchg.
Research Economists
G Greer, B.Agr.Sc. (Hons)
R G Moffitt, B.Hort.Sc., N.D.H.
Professor A C Zwart, B.Agr.Sc., M.Sc., Ph.D.
(Professor of Marketing)
J G Pryde, O.B.E., M.A., F.N.Z.I.M.
(Director, AERU)
R L Sheppard, B.Agr.Sc. (Hons), B.B.S.
(Assistant Director, AERU)
S.K. Martin, B.Econ., M.A.(Hons), Ph.D., Dip.Tchg.
(Senior Research Economist, AERU)
Research Sociologist
J R Fairweather, B.Agr.Sc., B.A., M.A., Ph.D.
Assistant Research Economists
J E Chamberlain, B.Agr.Sc.
T P Grundy, B.Sc. (Hons), M.Com.
J C Robertson, B.Com.Ag., M.Com.
Secretary
R Searle
CONTENTS
Page
(iii)
LIST OF TABLES
LIST OF FIGURES
(v)
(vii
PREFACE
(ix)
ABBREVIATIONS USED I N THIS REPORT
SUMMARY OF THREE YEARS NEW ZEALAND SURVEY RESULTS
SUMMARY
BACKGROUND
1.1
1.2
1.3
1.4
2
O b j e c t i v e s o f t h e N a t i o n a l Fann Survey
Producer P r i c e s
Town M i l k P r o d u c t i o n Data
Town M i l k S u p p l i e r s and Quotas
DESCRIPTION OF THE SURVEY
2.1
2.2
2.3
2.4
3
The Sample
Sample S t r a t i f i c a t i o n
Weighting
Data C o l l e c t i o n and Assembly
PHYSICAL AND PRODUCTION DATA
3.1
P h y s i c a l C h a r a c t e r i s t i c s o f Farms
3.1.1
3.1.2
3.1.3
3.2.
3.3
3.4
4
(xiii)
(xv)
CHAPTER
1
(xi)
Farm Area
Land Use
Irrigation
Labour
M i l k Production
Other P h y s i c a l and P r o d u c t i o n Data
3.4.1
Supplementary Feed Use
3.4.2
Run-Off Area
3.4.3
Non-Farni l y A d u l t Worker's Annual Wage
3.4.4
D a i r y and Other Stock Balances
FINANCIAL DATA
4.1
4.2
Introduction
Capi t a l S t r u c t u r e
Value o f A11 Assets
4.2.1
4.2.2
Value o f A l l L i a b i l i t i e s
CONTENTS
( Conti nued)
Page
4.3
Gross Revenue
4.3.1
Gross Revenue Per Farm
4.3.2
Types o f M i l k Payments Received
4.4
Expendi t u r e
Farm Expenditure
4.4.1
4.4.2
Depreciation o f Farm Assests
4.5
Farm Income
4.5.1
Net Farm Income
4.5.2
Cash Surplus
4.5.3
Farm Incomes Less Imputed I n t e r e s t Rates
4.5.4
Measures o f Economi c P r o f it a b i 1 it y
4.6
P r i n c i pal Revenue and Expenditure Components
APPENDICES
A
8
C
D
E
Producer Associations I n c l uded i n Survey
Survey D e f i n i t i o n s and Treatment o f Data'
Re1 i a b i l i t y o f Survey Estimates
Survey Results by Region and Quota Group
Survey Results o f Previous Years
LIST OF TABLES
T a b l e No.
Page
Chapter 1 BACKGROUND
1
2
3
4
5
Chapter 2
6
7
Chapter 3
N a t i o n a l Average Town M i 1 k Producer P r i c e s
Town M i l k A d d i t i o n a l D i s t r i c t A1 lowances f o r
1985 and 1986
T o t a l Town M i l k P r o d u c t i o n
T o t a l M i l k S u p p l i e r s and D a i l y Quotas
Quota Hol d i n g Company 1985-86
DESCRIPTION OF SURVEY
P o p u l a t i o n and Sample D i s t r i b u t i o n by S t r a t a
Balance Dates o f Annual Accounts 1985-86
PHYSICAL AND PRODUCTION DATA
Average Areas o f Town Supply Farms
U t i 1 i s a t i o n o f Farm Area
I r r i g a t i o n Use
Types o f Labour U n i t s
M i 1k P r o d u c t i o n
Supplementary Feed Use
Run-Off Area
Non Fami l y Adul t Worker's Annual Wage P a i d and Years
o f Experience
Uai r y Stock Balances
Beef and Sheep Stock Balances
Chapter 4
FINANCIAL DATA
C a p i t a l S t r u c t u r e - Value o f a l l Assets and
Liabilities
Gross Revenue Components
Types o f M i l k Payments Received
Farm Expenditure Components
D e p r e c i a t i o n o f Farm Assets
Wet Farm Income Components
Cash Surplus from Farming
Net Farm Income l e s s Imputed I n t e r e s t on E q u i t y
and T o t a l Assets
Measures o f Economic P r o f i t a b i 1 it y
Revenue and E x p e n d i t u r e P r o p o r t i o n s
APPENDIX C
28
29
Re1 ia b i 1 it y o f Survey E s t i m a t e s
E s t i m a t i o n o f S t r a t u m Sizes
11
12
14
14
17
20
21
21
21
22
23
LIST OF TABLES (Continued)
Table No.
Page
APPENDIX D
Average Areas o f Town Supply Farms by Region
and Quota Group
U t i l i s a t i o n o f Farm Area by Region and Quota Group
I r r i g a t i o n Use by Region and Quota Group
Types of Labour U n i t s by Region and Quota Group
M i 1k Production by Region and Quota Group
C a p i t a l S t r u c t u r e - Value o f A l l Assets and
L i a b i l it i e s - by Region and Quota Group
Gross Revenue Components by Region and Quota Group
Types o f M i l k Payments Received by Region and Quota
Group
Farm Expenditure Components by Region and Quota Group
D e p r e c i a t i o n o f Farm Assets by Region and Quota Group
Net Farin Income Components by Region and Quota Group
Cash Surplus from Farming by Region and Quota Group
Net Farm Income l e s s Imputed I n t e r e s t on E q u i t y and
T o t a l Farm Assets by Region and Quota Group
Measures o f Economi c P r o f it a b i 1it y by Region and
Quota Group
Supplementary Feed Use by Region and Quota Group
Run-Off Area by Region and Quota Group
Non-Family A d u l t Worker's Annual Wage Paid and Years
o f Experience by Region and Quota Group
47
Comparison w i t h Survey R e s u l t s o f Previous Years
LIST OF FIGURES
Page
FIGURE
Average Areas o f North and South I s l a n d Town M i l k
Farms
U t i l i s a t i o n o f Farm Area on N o r t h and South
I s 1and Farms
Labour U n i t s on North and South I s l a n d Farms
M i l k Production per D a i r y P r o d u c t i v e Hectare i n
both Islands
F i v e Years M i l k Production Per D a i r y Productive
Hectare
F i v e Years M i l k Production p e r Uecember M i l k i n g
Cow
Supplementary Feed - Bales o f Hay Made and Bought
i n Both I s l a n d s
F i v e Years T o t a l Farm Assets Per D a i r y Productive
Hectare
F i x e d L i a b i l i t i e s p e r Farm i n Both I s l a n d s
Farm Expenditure Sub-Groups p e r Uai ry Productive
Hectare i n Both I s l a n d s
F i v e Years Expenditure Per December M i l k i n g Cow
Operating Expenses Per December M i l k i n g Cow i n
Both I s l a n d s
Gross Depreciation o f Farm Assets i n Both I s l a n d s
Net Farm Income Components Per D a i r y Productive
Hectare i n Both I s l a n d s
F i v e Years Net Farm Income Per D a i r y Productive
Hectare
F i v e Years Net Farm Income Per December M i l k i n g
Cow
Two Measures o f Economic P r o f i t a b i l it y i n Both
Is l ands
PREFACE
T h i s r e p o r t i s the t h i r t e e n t h i n an annual s e r i e s o f economic
surveys o f New Zealand town m i l k supply farms. These surveys have been
undertaken by the A g r i c u l t u r a l Economics Research U n i t a t L i n c o l n
College on b e h a l f o f the New Zeal and M i lk Board and the Town M i l k
Producer ' s Federati on o f New Zeal and ( I n c . )
As i n the p a s t t h e major o b j e c t i v e o f t h i s survey has been t o
estimate the average n e t farm income received by town m i l k producers i n
I n a d d i t i o n however, t h e o p p o r t u n i t y provided by t h e
New Zealand.
surveys has been used t o col l e c t a d d i t i o n a l data so t h a t a more
comprehensive p r o f i l e o f t h e i n d u s t r y emerges.
J.G. Pryde
Ui r e c t o r
ACKNOWLEDGEMENTS
The
Agribusiness and Economics
Research
Unit
gratefully
acknowledges the co-operati on and assi stance w i 11in g l y p r o v i ded by
o f f i c e r s o f t h e New Zealand M i l k Board, Town M i l k Producer's Federation
o f New Zeal and ( Inc. ) , and m i l k producer companies.
I n particular,
thanks are expressed t o the i n d i v i d u a l
town m i l k producers f o r
co-operating i n t h e survey and making t h e i n f o r m a t i o n contained i n
t h e i r accounts avai 1abl e.
ABBRVIATIONS USED I N THIS REPORT
Avg
.
Average
Assn
Association
C
cents
C.V.
C a p i t a l Val ue
D a i r y prod. ha
Dai r y production hectares
equi p.
equi pment
exps
expenses
ha
hectares
incl
.
in c l u s i ve
1
1 it r e s
L.U.
Labour U n i t s
m.
million
m i l k prod.
m i 1k produced
M.P.
M i l k Producer
N.A.
Not Avai 1abl e
no.
number
prod. ha
p r o d u c t i ve hectares
RSE
R e l a t i v e Standard E r r o r
SUMMARY OF THREE YEARS NEW ZEALAND
SURVEY RESULTS
Characteri s t i c
1983-84
1984-85
1985-86
26.24
26.91
28.65
905
991
1,040
Farms Surveyed (No. )
Total Farm Area ( h a l f a r m )
Dairy Productive Farm Area ( halfarm)
Daily Quota (1 /farm)
Cows i n Milk i n December (cows/farm)
Labour Units ( L .U./farm)
Mi 1 k Production ( 1/farm)
( l / d a i r y prod. ha)
( 1/December Cow)
Total Value of Farm Assets ($/farm)
Gross Revenue ($/farm)
Total Expenditure ($/farm)
Net Farm Income ($/farm)
Net Income per Dairy Prod. ha ( $ / h a )
Net Income per Daily Quota ($11)
Net Income per Uecember Milking Cow
( $/Cow)
Net Income per Li t r e ( c e n t s / l )
Gross Revenue per Li t r e (cents11 )
Total Expenditure per December
Mi 1ki ng Cow ($/Cow)
(xiii)
SUMMARY
Phvsi c a l and P r o d u c t i o n A s ~ e c t s
1.
The average t o t a l area o f t h e New Zealand farms surveyed was
89.79 hectares.
T h i s was s m a l l e r than t h e 1984-85 survey
f i gure (96.24 hectares )
The average dai ry p r o d u c t i v e area was
81.02 hectares which was a l s o l e s s than t h e average 84.75
h e c t a r e s i n 1984-85. F o r t h e South I s l a n d t h e average d a i r y
p r o d u c t i v e area was s i m i l a r t o t h e 1984-85 r e s u l t b u t i n t h e
1985-86 y e a r t h e N o r t h I s l a n d r e s u l t was l e s s .
.
2.
The average d a i l y quota recorded on t h e surveyed farms was 774
l i t r e s compared w i t h t h e p r e v i o u s 1984-85 survey e s t i m a t e o f
795 l i t r e s . The N o r t h I s l a n d survey average o f 809 l i t r e s was
12 p e r c e n t h i g h e r than t h e South I s l a n d average quota ( 7 2 1
litres).
3.
The average number o f cows b e i n g m i l k e d i n December p e r farm
was 110.
I n 1984-85 t h e corresponding f i g u r e was 112.
The
average number o f cows b e i n g m i l k e d d u r i n g t h e w i n t e r ( i n June
1985) was 80.
4.
T o t a l m i l k p r o d u c t i o n p e r farm (516,188 lit r e s ) was t h r e e p e r
c e n t l e s s than t h e 1984-85 t o t a l (531,539 1 i t r e s ) .
North
I s l a n d farms show a s i x p e r c e n t f a l l , and South I s l a n d farms a
s l i g h t increase.
I n l i t r e s per productive hectare the North
I s l a n d (6,825 l i t r e s p e r h e c t a r e ) was 18 p e r c e n t ahead o f t h e
South (5,764 1 i t r e s p e r h e c t a r e ) .
5.
The p r o p o r t i o n o f m i l k s o l d a t town m i l k quota p r i c e s was 6 1
p e r cent. T h i s was s i m i l a r t o t h e 62 p e r c e n t f o r t h e 1984-85
survey. North I s l a n d farmers s o l d 62 p e r c e n t o f t h e i r m i l k a t
quota p r i c e s and t h e South 58 p e r cent.
6.
M i l k p r o d u c t i o n p e r December m i l k i n g cow was 4,693
T h i s was s i m i l a r t o t h e p r e v i o u s y e a r (4,742 l i t r e s ) .
7.
The average t o t a l l a b o u r employed on survey farms (2.08 l a b o u r
u n i t s ) was l e s s than t h e 1984-85 f i g u r e o f 2.24 l a b o u r u n i t s .
I n t h e North I s l a n d t h e l a b o u r u n i t s p e r farm f e l l from 2.27
u n i t s t o 2.06 u n i t s . A decrease from 2.19 t o 2.09 l a b o u r u n i t s
o c c u r r e d i n t h e South I s l a n d .
litres.
F i nanci a1 Aspects
8.
Average n e t farm income f o r a l l surveyed farms f o r 1985-86 was
$412 p e r d a i r y p r o d u c t i v e hectare. T h i s was 9 p e r c e n t h i g h e r
t h a n t h e p r e v i o u s y e a r ($377 p e r h e c t a r e ) . The t o t a l n e t farm
income was $33,403 p e r farm. The average income p e r h e c t a r e
f o r t h e North I s l a n d farms was $469 ( u p 2 p e r c e n t ) and f o r t h e
South I s l a n d farms i t was $336 p e r h e c t a r e (up 30 p e r c e n t ) .
N e t farm income p e r December m i l k i n g cow was $311 i n t h e N o r t h
I s l a n d and $290 p e r cow i n t h e South.
Gross revenue f o r New Zealand surveyed farms was $1,826 p e r
d a i r y p r o d u c t i v e hectare.
T h i s was e i g h t p e r c e n t higher
compared w i t h t h e previous y e a r ($1,688 p e r hectare).
The
t o t a l gross revenue p e r farm was $147,914 o r $1,343 p e r
December m i l k i n g cow. The North I s l a n d farms had a n i n e p e r
c e n t i n c r e a s e i n gross revenue per h e c t a r e ( t o $1,996) w h i l e
t h e South I s l a n d farms had a seven per c e n t i n c r e a s e i n gross
revenue p e r h e c t a r e ( t o $1,598).
T o t a l e x p e n d i t u r e per d a i r y p r o d u c t i v e h e c t a r e was $1,413.
T h i s was e i g h t per c e n t h i g h e r than t h e 1984-85 per hectare
r e s u l t . Expenditure per farm was $114,510 o r $1040 per m i l k i n g
cow.
The average North I s l a n d farm had an increase i n
expenditure o f 12 per c e n t per hectare t o $1,527.
There was a
t h r e e p e r c e n t increase i n t h e South I s l a n d expenditure p e r
hectare r e s u l t ( t o $1,262).
O f t h e 26 farm expenditure components p e r d a i r y p r o d u c t i v e
hectare, a l l b u t seven increased compared w i t h t h e previous
survey r e s u l t .
Labour expenses f o r a l l farms rose by 11 per
c e n t ( t o $209 per h e c t a r e ) , o p e r a t i n g expenses were up s i x p e r
c e n t ( t o $691 per h e c t a r e ) , a d m i n i s t r a t i o n was up t e n p e r c e n t
( t o $43 per h e c t a r e ) , overheads were up by 16 p e r c e n t ( t o $357
p e r h e c t a r e ) b u t d e p r e c i a t i o n decreased by 11 per c e n t ( t o $113
per h e c t a r e ) .
From t h e revenue from m i 1 k sales t h e average p r i c e r e c e i v e d p e r
lit r e o f a l l m i l k produced can be c a l c u l a t e d . F o r t h e c u r r e n t
survey i t was 24.5556 cents compared w i t h 22.2828 cents i n
1984-85 ( a n increase o f 10.2 per c e n t ) .
I n t h e North I s l a n d
t h e average p r i c e r e c e i v e d f o r a l l m i l k was 25.1337 cents per
1i t r e ( a r i s e o f 11.4 per c e n t compared w i t h t h e previous y e a r )
and i n t h e South I s l a n d i t was 23.6457 ( a n i n c r e s e o f 8.5 per
cent).
M i l k sales accounted f o r 85.7 per c e n t o f gross revenue on t h e
average farm (82.8 per c e n t i n 1984-85).
Net farm income on a cents per l i t r e o f t o t a l m i l k produced
b a s i s was 6.47 c e n t s compared w i t h 6.01 c e n t s i n 1984-85 and
5.63 cents i n 1983-84.
L i vestock t r a d i n g p r o f i t per dai r y p r o d u c t i v e h e c t a r e f e l l by
19 per c e n t from $212 per hectare i n 1984-85 t o $178 p e r
hectare i n 1985-86. D a i r y stock p r o f i t p e r December m i l k i n g
cow f e l l by 19 per c e n t t o $122 p e r cow.
The average value o f t o t a l assets was $601,340 f o r a 75.19
f r e e h o l d h e c t a r e farm ($7,998 per h e c t a r e ) . I n 1984-85 t o t a l
farm assets were $704,105 f o r a 83.02 f r e e h o l d h e c t a r e farm o r
$8,481 p e r hectare.
T o t a l l i a b i l i t i e s per farm were $162,335, a t e n p e r c e n t f a l l
Fixed
i n t h e survey f i g u r e from t h e previous y e a r ($178,933).
l i a b i l i t i e s f e l l by t e n per c e n t and c u r r e n t l i a b i l i t i e s a l s o
f e l l by 12 p e r cent.
E q u i t y as a per c e n t o f t h e value o f a l l assets averaged 73 per
cent.
T h i s was s i m i l a r t o t h e p r e v i o u s survey (75 per c e n t ) .
N o r t h I s l a n d farms had a h i g h e r p r o p o r t i o n (75 per c e n t )
compared w i t h South I s l a n d farms (70 p e r c e n t ) .
(xvi)
CHAPTER 1
BACKGROUND
1.1
O b j e c t i v e s o f t h e N a t i o n a l Farm Survey
As i n p r e v i o u s years, t h e p r i n c i p a l o b j e c t i v e o f t h e 1985-86
survey was t o determine t h e average n e t farm income r e c e i v e d by town
mi 1k producers i n New Zeal and. I n f o r m a t i o n produced by t h e survey i s
used f o r a v a r i e t y of purposes. I t a s s i s t s d e c i s i o n s concerning
a p p l i c a t i o n s f o r p r i c e i n c r e a s e s from s p e c i f i c producer groups.
The
n a t i o n a l average c o s t and r e t u r n r e s u l t s a r e a l s o used as standards
w i t h which c o s t s and r e t u r n f i g u r e s d e r i v e d from small e r r e g i o n a l
surveys can be compared.
The survey d a t a o b t a i n e d each y e a r a l s o
p r o v i d e a c o n t i n u i n g s e t of s t a t i s t i c s on t h e economic p o s i t i o n o f town
supply d a i r y farms. The a v a i l a b i l i t y o f such i n f o r m a t i o n i s o f v a l u e
t o t h e i n d i v i d u a l farmer, r e g i o n a l a d v i s e r s , and government p o l i c y
makers.
No a t t e m p t has been made i n t h e r e p o r t t o draw any c o n c l u s i o n s
on whether o r n o t an i n c r e a s e i n town m i l k p r i c e s i s j u s t i f i e d .
The
analyses have been c a r r i e d o u t p r i m a r i l y t o meet t h e b a s i c o b j e c t i v e o f
t h e survey, namely t h e d e t e r m i n a t i o n o f n a t i o n a l n e t farm income.
1.2
i
Producer ~ rces"
T r a d i t i o n a l l y t h e town m i l k producer p r i c e has been 1 i n k e d t o
he average manufacturing p r i c e f o r whole m i l k . An i n c r e a s e i n p r i c e
f one c e n t p e r kilogratn o f m i l k f a t r e s u l t e d i n an i n c r e a s e o f 0.06
c e n t s p e r l i t r e i n t h e town m i l k producer p r i c e . These c a l c u l a t i o n s
a r e based on f a c t o r y door values
and i n c l ude an allowance f o r
c o l l e c t i o n c o s t s made by t h e New Zeal and Ddi ry Board.
The town m i l k producer p r i c e f o r t h e 1985-86 y e a r commencing 1
September 1985, was based on a manufacturing p r i c e o f 400 c e n t s p e r
k i l o g r a m o f m i l k f a t f o r whole m i l k a t t h e farm gate.
Table 1 summarises t h e n a t i o n a l average town m i l k producer
p r i c e s f o r f i n e s t grade m i l k over t h e p a s t f o u r tdZ M i l k Board f i n a n c i a l
years.
Most producer companies a r e a c t u a l l y p a i d a t standard seasonal
p r i c e s which average back t o t h e n a t i o n a l average p r i c e r e f e r r e d t o i n
Table 1.
Some producer companies e l e c t t o v a r y t h e i r m i l k p r i c e s
throughout t h e y e a r t o compensate f o r c l i m a t i c c o n d i t i o n s , o r as a
means o f encouraging h i g h e r p r o d u c t i o n i n t h e more d i f f i c u l t p r o d u c t i o n
months.
Where w i t h i n-year v a r i a t i o n s o f p r i c e s are u t i 1 ised, t h e
e n t i r e payout must average back t o t h e n a t i o n a l average p r i c e .
NZ M i l k Board Annual Reports f o r t h e y e a r s ended August 1985 and
1986
TABLE 1
N a t i o n a l Average Town M i 1 k Producer P r i c e s
Year Commenci ng
1 s t September
1982
1983
1983
1984
1984
1985
Source:
( t o 29 February 1984)
( 1 March t o 31 August 1984)
( t o 8 Nov 1984)
( 9 Nov 1984 t o 31 August 1985)
F i n e s t Grade
Final Price
( c e n t s per 1it r e )
22.9593
23.4303
24.0405
24.0645
26.8563
27.8355
NZ M i l k Board Annual Report f o r t h e y e a r ended August 1986,
p.6.
Addi t i o n a l funds f o r speci a1 p r o d u c t i o n a1 1owances were made
a v a i l a b l e f o r c e r t a i n regions over and above t h e b a s i c p r i c e payable t o
town m i l k suppl i e r s . The purpose of t h e e x t r a a1 lowances was t o he1 p
o f f s e t t h e h i g h e r c o s t s o f p r o d u c t i o n i n those regions.
Government
approved an increase i n t h e s p e c i a l p r o d u c t i o n a1 lowances of $1.2
m i l l i o n a y e a r f o r t h r e e years from 1 September 1983.
Tabl e 2 summari ses t h e a d d i t i o n a l d i s t r i c t s p e c i a l
allowances f o r 1985 and 1986.
1.3
production
Town M i l k Production Data
T o t a l town m i l k p r o g u c t i o n i n t h e y e a r ending 31 August 1986 was over
673 m i 11i o n 1 i t r e s .
Tabl e 3 shows t h e t o t a l p r o d u c t i o n and s a l e o f
m i l k passing through t h e National M i l k Scheme f o r t h e years ending 3 1
August 1984, 1985 and 1986.
Ibid.,
p.17
TABLE 2
Town Milk Additional D i s t r i c t Allowances f o r 1985 and 1986
District
Cents per l i t r e over s i x
autumn and w i n t e r months
f o r t h e y e a r ended 31 August
Rotorua
Tokoroa I excl udi ng Putaruru & Hoddervill e )
Gi sborne (excl udi ng Wai r o a )
Hawke' s Bay (excluding Maharahara)
Kuapehu
Bl enheim
Nel son
Grey Di s t r i c t
Chri stchurch
As hburton
South Canterbury
North Otago
Uunedi n/Bal c l utha
Central Otago
South1 and
Source:
NZ Milk Board Annual Report f o r t h e y e a r ended
p.22.
August 1986,
TABLE 3
Total Town Milk Production
Year
Ending
31 August
Source:
Milk
Production
m. l i t r e s
Q u a n t i t y El i g i bl e
f o r Town Milk P r i c e
m. l i t r e s
Total Town Sal e s
m. l i t r e s
NZ Milk Board Annual Report f o r t h e y e a r ended August 1986,
p.17.
T o t a l m i l k sales t o consumers f o r the y e a r ended 31 August 1986
were 339,338,171 l i t r e s .
T h i s represents a d e c l i n e o f 2.88 per c e n t
over t h e previous year. There was a consumer p r i c e increase o f f i v e
cents p e r 600ml b o t t l e on 1 September 1985. Sales d e c l i n e d w i t h 1 it t l e
signs o f recovery u n t i 1 Apri 1 1986. Per capj t a consumption o f m i l k was
106.5 lit r e s , compared w i t h 110.02 1 it r e s the previous year.
1.4
Town M i l k Suppliers and Quotas
There were 1,254 town m i l k quota h o l d e r s
d u r i n g t h e 1985-86
i n i l k y e a r compared w i t h 1,247 f o r t h e previous year, and i n a d d i t i o n ,
t h e r e was one d a i r y company quota holder. A summary o f t h e number o f
quota and sub-quota holders over t h e p a s t f o u r years i s given i n Table
4, w h i l e Table 5 gives d e t a i 1 s o f t h e one quota h o l d i n g d a i r y company
i n 1985-86.
TABLE 4
T o t a l M i l k S u p p l i e r s and D a i l y Quotas
Year
Endi ng
31 August
1984
1985
1986
Source:
Type o f
Quota
Holders
Total
Nomi nated
Quantity
(li
No. Town
M i 1k Suppl i e r s
& Sub-quota
Holders
Average
Dai l y Quota
per Suppl ie r
(1)
Total NZ Suppliers
2 Uai r y Companies
Quota and Subquota Holders
1,021,079
13,251
1,278
42
799
316
1,034,330
1,320
784
T o t a l NZ Suppliers
1 D a i r y Company
Quota and Sub-quota
Holders
1,012,409
13,251
1,247
41
812
323
1,025,660
1,288
796
T o t a l NZ Suppl ie r s
1 D a i r y Company
Quota and Sub-quota
Holders
1,011,108
13,212
1,214
40
833
330
1,024,320
1,254
817
NZ M i l k Board, pers. comm.
NZ M i l k Board, pers. comm.
TABLE 5
Quota Hol d i ng Company 1985-86
Name o f
Company
Quota
He1d
( L it r e s )
supply
Di s t r i c t
No. o f sub-quota
h o l ders
E a s t Tamaki
13,212
Auckl and
40
Source:
NZ M i l k Board, pers. comm.
Nominated q u a n t i t i e s , which producer associ a t i o n s c o n t r a c t t o
guarantee t o meet t h e d a i l y 1 i q u i d mi 1k requirements i n t h e i r area
throughout t h e year, a r e based on e s t i m a t e d demand i n accordance w i t h
an agreed formula.
Due t o t h e c o n t i n u i n g decl i n e i n s a l e s s i n c e
r e g u l a r p r i c e increases began i n 1976, nominated q u a n t i t i e s have been
r e d u c i ng a1 so.
/he
f o l 1ows :
agreed
formula
for
f i x i n g nominated
quantities
is
as
1.
Average d a i l y s a l e s c a l c u l a t e d by t a k i n g t h e n e t s a l e s by m i l k
s t a t i o n s t o vendors over a p e r i o d of two c o n s e c u t i v e w i n t e r
months and d i v i d i n g by t h e a p p r o p r i a t e number o f days i n t h e
period.
2.
The r e s u l t a n t d a i l y s a l e s f i g u r e s t o be i n c r e a s e d by a
t o l e r a n c e f a c t o r o f 3.25 p e r c e n t t o cover r e t u r n e d m i l k ,
wastage and o t h e r f a c t o r s .
3.
The r e s u l t a n t f i g u r e t o be a d j u s t e d t o i n c l u d e an allowance f o r
expected changes i n t h e p o p u l a t i o n .
Ibid.,
p.3.
CHAPTER 2
DESCRIPTION OF THE SURVEY
2.1
The Samule
The sampling u n i t f o r t h e survey i s t h e farm, and t h e
sources o f i n f o r m a t i o n , t h e farmer and t h e annual farm accounts.
main
Every t h r e e y e a r s a new sample o f town supply farmers i s
randomly selected.
Most o f t h e farmers i n t e r v i e w e d f o r t h e 1985-86
survey were new p a r t i c i p a n t s . A l l town supply farmers were e l i g i b l e
f o r s e l e c t i o n p r o v i d e d t h e f o l l o w i n g c r i t e r i a were s a t i s f i e d .
had a
litres
(i)
The farm
nominated
daily.
s u p p l i e d a producer a s s o c i a t i o n t h a t
q u a n t i t y (N.Q.) o f more than 6,500
(ii)
The farm
1 it r e s .
itself
(iii)
The farm r e c e i v e d a t l e a s t 75 p e r c e n t o f gross revenue
from m i l k s a l e s and r e l a t e d d a i r y a c t i v i t i e s .
(iv)
The farmer had
p a r t i c u l a r farm
p e r i od.
had a d a i l y quota o f more
than
200
been producing town m i l k on t h a t
over t h e t w e l v e months o f t h e survey
The d e c i s i o n on e l i g i b i l i t y was c a r r i e d o u t i n two stages.
F i r s t l y , i n f o r m a t i o n a v a i l a b l e from t h e M i 1k Board p r i o r t o sample
s e l e c t i o n enabled farms n o t s a t i s f y i n g ( i ) and ( i i ) above t o be
eliminated
from t h e t o t a l p o p u l a t i o n .
Also, r e s u l t s
from
a
q u e s t i o n n a i r e which had been s e n t t o each producer company s e c r e t a r y
seeking i n f o r m a t i o n on t h e s h a r e m i l k e r s i n each company enabled farms
t o be f u r t h e r e l i m i n a t e d on t h e b a s i s o f ( i v ) . The second stage a t
which a deci s i o n was made on e l i g i b i l it y was a t t h e t i m e o f t h e f a r m
v i s i t when f u r t h e r farnis were e l i m i n a t e d because o f e i t h e r ( i i i ) o r
(v)
O f an i n i t i a l l i s t of 1214 farms p r o v i d e d by t h e M i l k Board,
t h e e l i g i b l e p o p u l a t i o n was reduced under ( i ) , (i
i ) and ( i v ) t o 806
p r i o r t o sample s e l e c t i o n . Keplacement farms were s e l e c t e d a t random
from t h e reduced 1 is t and t h e farmers i n i t i a l l y c o n t a c t e d by mai 1.
P r o v i d e d t h a t t h e farm was found t o be e l i g i b l e and t h e farmer agreed
t o p a r t i c i p a t e i n t h e survey, a farm v i s i t was undertaken by L i n c o l n
C o l l e g e s t a f f and t h e r e q u i r e d i n f o r m a t i o n obtained. Where farms were
found t o be inel i g i b l e o r t h e f arrner unwi 11 ing t o p a r t i c i p a t e , f u r t h e r
replacement farmers were c o n t a c t e d u n t i l s u f f i c i e n t numbers were
obtained.
2.2
Sample S t r a t i f i c a t i o n
The sample was s t r a t i f i e d on t h e b a s i s o f two r e g i o n a l groups
( N o r t h I s l a n d and South I s l a n d ) and t h r e e quota s i z e s (201-600 1 it r e s ,
601-1000 l i t r e s and 1001t l i t r e s ) .
Table 6 shows the number of survey farms f o r each s t r a t a o r
group compared w i t h the el i gi bl e population f o r each s t r a t a .
Further
d e t a i l s a r e given i n Appendix C.
TABLE 6
Popul a t i on and Sample D i s t r i b u t i o n by s t r a t a a
Estimated
Total No.
of Farms
in Strata
Estimated
Proportion
of Total
Farms i n
Strata
Number of
Farms
Surveyed
Proporti on
of Total
Farms
Surveyed
201-600 1i tres
601-1000 1 i t r e s
1001+ l i t r e s
124
185
115
0.1744
0.2630
0.1665
21
38
17
0.14
0.25
0.11
Total North I s l a n d
424
76
0.50
26
34
16
0.17
0.22
0.11
76
0.50
152
1.00
Strata
North I s l a n d
South I s l a n d
201-600 1 i tres
601-1000 1 i tres
1001+ l i t r e s
135
92
49
Total South I s l a n d
276
New Zeal and
7 00
a
2.3
0.1921
0.1332
0.0708
1.0000
See Appendix C
Weighting
Since the South I s l a n d s t r a t a were sampled r e l a t i v e l y more
heavily than the North I s l a n d , a simple average of a l l survey farms
would have given a biased national f i g u r e . The e s t i m a t e d proportion o f
the t o t a l farms i n each s t r a t a (Table 6) was t h e r e f o r e used t o "weight"
t h e average frorn each s t r a t a t o give the o v e r a l l New Zealand r e s u l t s
(and a1 so the North I s l a n d and South I s l a n d r e s u l t s ) . T h i s procedure
ensures t h a t each s t r a t a assumes i t s c o r r e c t degree of importance i n
the f i n a l resul ts.
2.4
Data Col 1e c t i o n and Assembly
To m a i n t a i n u n i f o r m i t y and c o n t i n u i t y of the survey, t h e manual
o f procedures introduced by t h e New Zealand M i l k Board and the Town
Zealand ( I n c . ) was f o l l owed.
M i l k Producers'
Federation of New
Appendix B gives d e t a i 1 s of d e f in i ti ons, procedures and imputed v a l ues
used.
A s e t of farm working accounts f o r the 1985-86 f i n a n c i a l y e a r
was obtained from t h e farmer o r h i s accountant.
Milk production
records f o r the farms surveyed were provided from t h e records o f
producer associations.
Partnerships and companies were t r e a t e d as
owner-operated farms by assuming one o f t h e p a r t n e r s (members) as
owner, and t h e o t h e r ( s ) as employee(s), provided they were engaged i n
farm work.
Wherever possi b l e, data were t r a n s f e r r e d d i r e c t l y from t h e farm
accounts t o t h e r e l e v a n t income and expenditure categories on t h e
survey assembly form.
Trade d i scounts, subsidies and a1 l owances f o r
personal use were deducted from t h e a p p r o p r i a t e expense i t e m b e f o r e
e n t r y . Other adjustments i n c l u d e d the c a l c u l a t i o n o f an imputed wage
f o r any unpaid f a m i l y labour and the assessment o f a standard l i v e s t o c k
value f o r each s e t of accounts.
TABLE 7
Balance Dates o f Annual Accounts 1985-86
Number o f Farms
North
Island
South
Island
76
76
New
Zeal and
152
Month Ending
March
Apri 1
May
June
August
Total
100
100
100
A1 1 financial and production data c o l l e c t e d r e f e r r e d
farm's f i n a n c i a l year. Table 7 shows the d i s t r i b u t i o n o f farm
balance dates of the 152 p a r t i c i p a t i n g farmers i n the 1985-86
It can be seen t h a t 62 per cent of a l l balance dates were March
t o the
account
survey.
31st.
F i nanci a1 resul t s f o r the survey farms were derived 1a r g e l y
from t h e farm accounts.
I n cases where these showed i n s u f f i c i e n t
detail, further
information was sought
from the farmer
and/or
accountant.
CHAPTER 3
PHYSICAL AND PRODUCTION DATA
3.1
Physical C h a r a c t e r i s t i c s of Farms
3.1.1.
Farm Area
Table 8 shows t h e average
t o t a l farm area and average
productive a r e a of t h e North I s l a n d , South I s l a n d and average Mew
Zeal and survey farms.
The same t a b l e i s broken by region and quota
group i n Appendix E .
The average t o t a l s i z e of t h e farm i n c l u d i n g run-off a r e a f o r
North I s l a n d farms was 85.54 h e c t a r e s , f o r South I s l a n d farms 97.80
h e c t a r e s , and f o r t h e average New Zealand farm, 89.79 h e c t a r e s .
An e s t i m a t e of t h e d a i r y productive a r e a used f o r milk
production a l s o appears i n Table 8 . On t h e North I s l a n d farms more
land was used f o r sheep, beef and cash c r o p s (9.03 h e c t a r e s ) compared
with t h e South I s l a n d . The d a i r y productive a r e a on t h e average North
I s l a n d farm was 76.61 h e c t a r e s . This was o v e r 11 h e c t a r e s l e s s than
t h e 87.75 h e c t a r e s f o r t h e South I s l a n d average farm.
Figure 1 i s a graphic r e p r e s e n t a t i o n of t h e North
Is1 and farm a r e a s .
and
South
TABLE 8
Average Areas of Town Supply Farms
North Is1 and
South I s l a n d
New Zealand
Number of Farms Surveyed
Freehold Area
Crown & Maori Lease
Rented Area
Total Farm Area
Less Unproductive Area
Productive Area
Less Estimated Sheep, Beef
and Cash Crop Area
Plus Estimated 'Grazing'
O u t Area
Dairy Productive Area Uti 1 i sed
76.61
f o r Mil k Production
87.75
81.02
FIGURE 1
Average Areas o f North and South I s l a n d
Town M i 1k Farm?
HECTARES SUM
ISLAND
TYPE
- ----1
1
l------pl
--
NORTH Da i r y P r o d u c live
Freehold
Leased & R e n t e d
1-1
Sheep, B e e f e t c .
Unproduc t i ve
SOUTH D a i r y P r o d u c t i v e
Freehold
Leased & R e n t e d
Sheep. Beef e t c .
1~:
5.52
Unproductive
-.T-,..v.,.
.,.I..r..
.,.
.-.,
Hectares
TABLE 9
U ti 1 is a t i on o f Farm Area
North I s l a n d
Number o f Farms Surveyed
P r o p o r t i o n o f Farin Area under:
Total
D a i r y Pasture
Forage Crops
Sheep & Beef C a t t l e
Pasture & Cash Crops
Unproductive Land
South I s 1and
New Zeal and
100.0
100 .O
76
%
82
2
11
5
100.0
FIGURE 2
U t i l i s a t i o n o f Farm Area on N o r t h and South
I s l a n d Farms
Proportion of Farm U s e d for:
Dairy Pasture
PERCENT SUM
ISLAND
North
1-1
82
J
1
South
Forage Crops
North
South
Sheep,Cattle etc
b
I
North'
South
Unproductive Use
~orthv
Percent
Land Use
Table 9 and F i g u r e 2 g i v e a b r i e f summary o f l a n d use on t h e
surveyed farms. The non-productive area on i n d i v i d u a l farms ranged up
t o 32.38 hectares i n the North I s l a n d and up t o 50.0 hectares i n t h e
South Island. Much o f t h i s l a n d was i n gorse, bush o r scrub.
3.1.3.
Irrigation
F o r t y - n i n e p e r c e n t (37 farms) o f t h e surveyed South I s l a n d
farms used i r r i g a t i o n d u r i n g t h e y e a r compared w i t h 12 per c e n t ( n i n e
farms) i n t h e N o r t h I s 1and (see Tab1 e 1 0 ) . The average percentage o f
d a i r y p r o d u c t i v e l a n d which was i r r i g a t e d on these 46 farms was 50 p e r
cent.
85
TABLE 10
I r r i q a t i o n Use a
North Island
New Zeal and
70
50
76
Number o f Farms Surveyed
Number o f Farms
Using I r r i g a t i o n
-
South I s l a n d
9
Percentage o f D a i r y
P r o d u c t i v e Area
Irrigated
37
-
Estimated T o t a l Hours
I r r i g a t i ng
a
These r e s u l t s do n o t i n c l ude weighted means.
The average
c a l c u l a t e d a c c o r d i n g t o t h e number o f p r a c t i s i ng farmers.
572
1,248
840
is
TABLE
Types o f Labour U n i t s
North Island
South I s l a n d
76
76
152
T o t a l Family Labour U n i t s
1.37
1.59
1.47
Permanent Non-Fami 1y
Casual Non-Fami l y
0.61
0.08
0.42
0.08
0.53
0.08
T o t a l Non-Family Labour U n i t s
0.69
0.50
0.61
Number o f Farms Surveyed
New Zealand
Farmer
Permanent F a m i l y
Casual Fami l y
- - - -
T o t a l Labour U n i t s
P r o p o r t i o n o f Permanent Labour
P r o p o r t i o n o f Fanii l y Labour
95%
67%
3.2
Labour
The average survey farm employed a t o t a l of 2.08 labour units
( s e e Table 11 and Figure 3 ) . This was l e s s than the 1984-85 f i g u r e of
2.24 labour units. There was 1i t t l e difference i n t h e percentage of
permanent labour between the two Islands.
FIGURE 3
labour Units on North and South
I sl and F a m s
l SLAND
SUM
-
TYPE
-D
Y
NORTH Nonfami ly labour
0.69
Fami l y labour
1.37
Total labour
2.06
SOUTH Nonfarni l y labour
1
Fami l y labour
0
Total labour
I
1
Labour Un i t s per Farm
3.3
M i 1k Production
Tne d a i l y quota per surveyed farm was 774 l i t r e s (Table 12 and
Figure 4 ) , compared w i t h the previous y e a r ' s New Zeal and survey
estimate of 795 l i t r e s . The average North Island quota was 12.2 per
cent higher than the average South Island quota (809 and 721 1i t r e s ) .
Total annual milk production per dairy productive hectare f o r MZ
s l i g h t l y increased (from 6,272 1 i t r e s per hectare i n 1984-85 to 6373
l itres).
Li t r e s per December mil king cow showed a marginal f a l l from
4,742 i n the previous year t o 4,693 i n the 1985-86 year.
Because the average farm areas and quota sizes a r e d i f f e r e n t ,
l e s s biased comparisons can be made between the Islands by comparing
r e s u l t s per hectare or per cow. Between the two Islands stocking r a t e s
were higher on the North Island farms ( u p 30 per cent t o 1.51 December
cows per dairy productive hectare).
--
When the total l i t r e s produced per farm i s converted t o milkfat
a t a 4.18 per cent t e s t S the average North Island townmilk farm
produced 285 kg per dairy productive hectare ( u p 18.3 per cent)
compared with the average South Island farm a t 241 kg.
The average North Island supplier stocked 40 per cent more cows
per dairy productive hectare i n June compared with the South Island
supplier.
There was l e s s avai 1 able dairy productive land on the North
The South Island producer had more
Island farms (76.6 hectares).
available land (87.8 hectares) b u t a lower stocking r a t e . Due t o the
heavier stocking the North Island farmer produced over eighteen per
cent more mi 1k per dai ry productive hectare.
Detai 1 s of mi 1 k production per dairy productive hectare and per
December mi 1king cow f o r the 1a s t five town mi 1k surveys appear i n
Figures 5 81 6.
FIGURE 4
Milk Production per Dairy Productive Hectare i n Both Islands
L ITRES SUM
l SLAND
TYPE
NORTH Surplus M i lk
Quota M i lk
SOUTH Surplus Milk
Quota Mi lk
I
I
4260
D
I
Total l i tresl
I
L i ties p e r Dairy P r o d u c t i v e Hectare
5
NZ Milk Board Annual Report f o r the year ended August 1985, p. 28.
5764
TABLE 12
Mil k Production
North I s l a n d
Number o f Farms Surveyed
76
South I s l a n d
New Zeal and
76
152
721
87.8
774
81 .0
Daily Quota (1)
809
Dairy Productive Hectares ( h a ) 76.6
Mi 1k Producti on
Sold a t Quota P r i c e s (1)
326,298
Mi 1k Production
Sold a t Surplus P r i c e s (1) 196,511
296,203
314,375
209,902
201,813
Total Li t r e s Produced (1)
506,105
516,188
522,809
Proportion of Total Sold a t
Quota P r i c e s ( X )
Average No. Mil king Cows i n :
Feb 1985
Apr 1985
Jun 1985
Aug 1985
Oct 1985
Uec 1985
Total L i t r e s Converted t o
4.18XaMilk F a t ( k g )
Kg. ivli 1k Fat/Dai ry Producti ve
ha ( k g )
Li tres/Uecember Mi 1king
Cows ( 1 )
Li tres/Dai ry Productive
ha (1)
December Cows/Dai ry
Productive ha (No.)
June Cows/Dai ry Productive
ha (No.)
a
NZ Milk Board Annual Report 1986,
p.28.
FIGURE 5
F i v e Years M i l k Production per D a i r y Productive Hectare
PRODN SUM
Year
-
1
Li tres per Dairy Product ive'Hectare
FIGURE 6
F i v e Years M i l k Production per December M i l k i n g COW
PRODN SUM
Year
-1
1981-82
L i tres per December M i l k i n g Cow
4945
3.4
Other Physical and Production Data
3.4.1.
Supplementarv Feed Use
In Table 13 the various forms of supplementary feed a r e l i s t e d .
In a l l but one type, South Island farms make, grow and purchase more
supplementary feed compared w i t h t h e North Island. The exception i s
forage crops.
More North Island farmers grew a l a r g e r average area of
forage crops i n 1985-86.
South Island farms which grow and purchase hay (Figure 7 ) had a
t o t a l of 6495 bales of hay per farm (64 bales per December cow). This
i s approaching twice the number per cow f o r the equivalent North Island
farm (39 per cow).
FIGURE 7
Supplementary Feed - Bales o f Hay Made and Bought
i n Both Islands
TYPE
Bought Hay B a l e s
North I s
South I s
Homo Grown B a l e s
North I
South Is
"'1
1
1
1
B a l e s o f Hay p e r Farm
3.4.2.
SUM
-
Run-Off Area
In both Islands approximately 44 per cent of farms had a
run-off area (Table 1 4 ) . The average run-off i n the two Islands was
similar in s i z e ( j u s t over 27 hectares).
Non-Fami ly Adul t Worker' s Annual Wage
In both Islands over a t h i r d of the surveyed farms employed an
a d u l t non-family employee (Table 1 5 ) . In the North Island the average
annual wage paid on these farms was $15,054. This was 3 per cent
higher than the wage paid on the South Island town milk farms
($14,573).
TABLE 13
SUPP~
ementarv Feed Use a
North I s l a n d
Number o f Farms Surveyed
Number o f Farms w i t h Home
Grown Hay
- Average No. o f Home Grown
Bales p e r Farm
Number o f Farms w i t h
Purchased Hay
- Average No. o f Purchased
Bales
Number o f Farms Making S i l a g e
- Average No. o f tonnes o f
S i l a g e Made
Number o f Farms w i t h Home
Grown Grain
- Average No. o f tonnes o f
Home Grown Grain
South I s l a n d
New Zealand
76
76
152
69
73
142
2,735
4,085
3,429
32
47
1,846
2,410
79
2,182
63
381
0
0
Number o f Farms w i t h Purchased
5
Grai n
- Average tonnes o f Purchased
Grain
26.8
Number o f Farms w i t h
Purchased Dai ry Meal
- Average tonnes o f D a i r y
Meal Purchased
6.9
Number o f Farms Growing a
Forage Crop
- Average Hectares Grown
31
3.39
17
a These r e s u l t s do n o t i n c l u d e weighted means. The average i s
c a l c u l a t e d according t o t h e number o f p r a c t i s i n g farms.
TABLE 14
Run-Of f Area a
- -
North I s l a n d
South I s l a n d
Number o f Farms Surveyed
76
76
152
Number o f Farms w i t h a Run-off
43
44
87
-
27.4
Run-Off Area (ha)
Distance from Home Farm
t o Run-Of f ( km)
-
-
New Zeal and
6.3
a These r e s u l t s do n o t i n c l u d e weighted means. The average i s
c a l c u l a t e d according t o t h e number o f p r a c t i s i n g farms.
TABLE 15
Non-Fanii l y Adul t Worker ' s Annual Wage Paid and
Years o f E x ~ e r i e n c ea
North I s 1and
Number Surveyed
76
South I s 1and
76
New Zeal and
152
Non-Family A d u l t Workers:
-
a
Number o f Farms With a
Worker f o r a F u l l Year
Annual Average Wage
Paid ( $ )
Previous Years o f D a i r y
Experi ence
15,054
14,573
14,822
5.9
6.5
6.2
These r e s u l t s do n o t i n c l u d e weighted means. The average i s
c a l c u l a t e d according t o the number o f p r a c t i s i n g farms.
3.4.4.
D a i r y and Other Stock Balances
I n Tables 16 & 17 t h e New Zealand d a i r y and o t h e r stock
balances are l i s t e d . The stock standard values u s e d ' i n these t a b l e s
are d e t a i l e d i n Appendix 8.
TABLE 16
Dai r v Stock Balances
New Zeal and
Opening Stock
Average No.
Per Farm
A l l Cows
Hei f e r s - i n-Cal f
Other D a i r y Stock
118.2
27.9
52.2
Sub- t o t a l
198.3
New Zeal and
Value
$
14,775
2,790
5,721
Closing Stock
Average No.
Per Farm
A1 1 Cows
124.5.
Heifers-in Calf
28.4
Other D a i r y Stock 56.1.
Sub-total
Value
$
15,563
2,840
6,393
209 .O
Purchases :
Cows and i n - c a l f
Heifers
5.3
Others Purchases
2.5
Natural Increases
Calves Bred (No.) 86.3
Dairy Stock P r o f i t
13,407
Openi ng Bal ance
40,117
292.4
2,746
678
C u l l Cows Sold
Others Sold
18.7
60.2.
Deaths, M i s s i ng
4.5
Closing Balance
292.4
7,209
8,112
40,117
TABLE 17
Beef and Sheep Stock Balances
New Zeal and
Opening Stock
New Zeal and
Average No.
Per Farm
Value
Closing Stock
Average No.
Per Farm
Value
$
26.6
15.2
266
134
Ewes
Other Sheep
37.9
11.3
379
110
7.1
1,020
$
Sheep :
Ewes
Other Sheep
Beef :
Beef:
Beef C a t t l e
- -
6.5
416
--
-
Sub-total
48.3
- -
-
Sub-total
Purchases:
Sheep Purchased
Beef C a t t l e
Purchased
Beef C a t t l e
56.3
Sales:
3.8
61
0.8
29
Natural Increase
Number
31 .O
Other Stock P r o f i t
1,039
Opening Bal ance
1,945
83.4
Sheep Sold
23.6
Beef C a t t l e Sold 0.4
Deaths, M i s s i ng
etc.
3.1
Closing Balance
83.4
337
99
CHAPTER 4
FINANCIAL DATA
4.1
Introduction
Many o f t h e t a b l e s i n t h i s Chapter have r e s u l t s presented on a
p e r farm,
p e r average December m i l k i n g cow and a per d a i r y p r o d u c t i v e
hectare b a s i s.
The re1 i a b i l it y of t h e survey estimates a r e presented i n
Appendix C. Some compari sons w i t h t h e r e s u l t s from t h e p r e v i o u s f i v e
years a r e presented i n Appendix E.
4.2
Capital Structure
D e t a i l s of t h e procedures adopted i n assessing t h e c a p i t a l
value o f assets and 1 i a b i l it i e s a r e 1 is t e d i n Appendix 8.
They a r e
s i m i l a r t o those f o l l o w e d i n previous surveys.
4.2.1.
Value of a l l Assets
The t o t a l value o f a l l assets on t h e average 75.19 f r e e h o l d
hectare New Zealand survey farm was $601,340 o r $7,422 p e r d a i r y
p r o d u c t i v e hectare (see Table 1 8 ) . T h i s was twelve p e r c e n t lower than
t h e 1984-85 asset value o f $8,308 p e r d a i r y p r o d u c t i v e hectare.
For
each December m i l k i n g cow t h e r e were $5,462 o f assets.
The average North I s l a n d farm had an a l l assets t o t a l o f $8,676
p e r d a i r y p r o d u c t i v e hectare. T h i s was 51 per c e n t h i g h e r than
the South I s l a n d f i g u r e o f $5,753 per hectare.
I n 1983-84 t h e
d i f f e r e n c e i n asset value p e r farm between t h e two I s l a n d s was $2,396
per d a i r y p r o d u c t i v e hectare, and i n 1984-85 i t was $2,745,
b u t by
1985-86 i t had increased t o $2,923 per d a i r y p r o d u c t i v e hectare. T h i s
t r e n d h i g h l i g h t s t h e more r a p i d r i s e i n North I s l a n d l a n d values.
In
F i g u r e 8 t h e t o t a l farm assets from t h e l a s t f i v e years surveys a r e
1 i sted.
.
FIGURE 8
F i v e Years T o t a l Farm Assets p e r D a i r y Productive Hectare
ASSETS SUM
Year
Total Farm Assets per Dairy Prod. Ha
TABLE 18
Capital Structure
- Value o f a l l Assets and L i a b i l i t i e s
North I s l a n d
Total L i t r e s Produced
Cows i n M i l k i n
Dec. 1985
D a i r y Prod. h e c t a r e s
Per
Cow
Per D a i r y
Prod. ha
Per
Farm
Per
Cow
Per D a i r y
Prod. ha
Per
Farm
Per
Cow
Per D a i r y
Prod. ha
522,809
4,523
6,824
506,105
4,975
5,768
516,188
4,688
6,371
$
522,070
24,320
10,549
20,967
11,986
25,941
25,275
2,330
1,863
-
New Zealand
Per
Farm
115.60
76.61
Assets
F r e e h o l d Land
( v a l u e d a t 31.12.85)
Farmer' s House
(1/2 Book Value)
Other Farm Houses
Farm Bui 1 d i n g s
P l a n t and Equipment
Farm V e h i c l e s
D a i r y Stock
Other Stock
Company Shares
-
South I s l a n d
-
101.72
87.75
$
s
$
4,516
6,815
210
91
181
104
225
219
20
16
--
317
138
274
156
338
330
31
24
-
353,321
20,528
6,463
23,498
19,935
27,334
24,066
258
2,872
---
110.10
81.02
9
9
3,473
4,026
202
64
231
196
269
237
2
28
234
74
268
227
311
274
3
33
--- -
$
F
455,226
4,135
$
5,618
22,818
8,931
21,969
15,135
26,493
24,796
1,509
2,263
20 7
81
199
137
24 1
225
14
21
282
110
27 1
187
327
306
19
28
--
T o t a l Farm Assets
Cash a t Bank
Sundry Debtors
Other C u r r e n t Assets
645,301
8,102
8,178
3,079
5,582
7U
71
27
8,423
106
107
40
478,275
11,536
8,269
6,723
4,702
113
81
66
5,450
131
94
77
579,140
9,463
8,214
4,523
5,260
86
75
41
7,148
117
101
56
T o t a l A l l Assets
664,660
5,750
8,676
504,803
4,962
5,752
601,340
5,462
7,422
( T a b l e 18 c o n t ....)
TABLE 18 ( c o n t . )
Capital Structure
-
Value o f A l l Assets and L i a b i l i t i e s
North I s l a n d
Per
Farm
C u r r e n t L i a b i 1 it i e s
Bank O v e r d r a f t
Sundry C r e d i t o r s
Other C u r r e n t L i a b i 1 it i e s
Per
Cow
South I s l a n d
Per D a i r y
Prod. ha
Per
Farm
Per
Cow
New Zealand
Per D a i r y
Prod. ha
Per
Farm
Per
Cow
Per D a i r y
Prod. ha
8;365
2,902
72
25
109
38
91524
5,480
94
54
109
62
8;824
3,922
80
35
109
48
T o t a l F i x e d L i a b i 1i t i e s
148,490
1,285
1,938
129,693
1,275
1,478
141,042
1,281
1,741
T o t a l A1 1 L i a b i 1 it i e s
Equi t y
168,952
495,708
1,462
4,288
2,205
6,471
152,257
352,546
1,497
3,466
1,735
4,018
162,335
439,005
1,474
3,988
2,004
5,418
Total
664,660
5,750
8,676
504,803
4,963
5,753
601,340
5,462
7,422
Total Current
L i a b i 1 it i e s
F i x e d L i a b i 1 iti es
Rural Bank Mortgages
Trading Bank ~ o r t ~ a ~ e s
B u i l d i n g Society
Mortgages
Insurance Company Loans
Stock F i r m Loans
Finance Company Loans
S o l i c i t o r s Loans
Family Mortgages
Other L i a b i 1 iti es
4.2.2.
Value o f a l l L i a b i l i t i e s
The average North I s 1and farm of 69.05 freehold hectares had a
c u r r e n t and f i x e d l i a b i l i t i e s t o t a l o f $168,952 o r $2,205 p e r d a i r y
p r o d u c t i v e hectare (see Table 18). The South I s l a n d f i g u r e was
$152,257
($1,735 p e r h e c t a r e ) .
The
New Zealand value o f a l l
1iabi 1 i t i e s decreased compared w i t h t h e previous y e a r as d i d t h e New
I t decreased by 13 per c e n t from $6,197
to
Zeal and e q u i t y value.
$5,418 dai ry p r o d u c t i ve hectare.
Figure
two Islands.
9 l i s t s t h e v a r i o u s types o f f i x e d l i a b i l i t i e s f o r
the
I
FIGURE 9
Fixed Liabilities per Farm in Both Islands
DOLLARS SUM
Liabilities
ISLAND
Building Soc.
NORTH
SOUTH
Fami I y Utges
NORTH
SOUTH
Finance Co.
NORTH
I
P
SOUTH
lnsuronce Cos
I
NORTH
P
SOUTH
Other
NORTH
SOUTH
Rural Bank
NORTH
I
SOUTH
Solicitors
NORTH
SOUTH
Stock Firms
Trading Banks
NORTH
I
1
P
1 1 13
SOUTH
1381
NORTH
17378
SOUTH
11714
0
20000
40000
O o l lare
60000
80000
4.3
Gross Revenue
4.3.1.
Gross Revenue per Farm
Total gross revenue i n Table 19 f o r the average New Zealand
farm increased by e i g h t per c e n t from $1,688 per d a i r y p r o d u c t i v e
hectare t o $1,826 per hectare. T o t a l gross revenue per m i l k i n g cow was
$1,343.
M i l k sales represented 85.7 p e r c e n t o f t h e t o t a l gross revenue
f o r the average farm. The New Zealand f i g u r e o f $1,565 per hectare f o r
m i l k sales was above t h e 1984-85 f i g u r e by 12 per cent.
Livestock
standard values were maintained a t t h e same l e v e l as the previous
survey
.
The t o t a l North I s l a n d gross revenue per farm was $152,947 o r
$1,996 per d a i r y productive hectare. T h i s was 25 per c e n t h i g h e r than
t h e South I s l a n d t o t a l of $1,598 per hectare. The t o t a l South I s l a n d
gross revenue was $140,243 per farm. I n m i l k sales per cow t h e South
I s 1and average farm performed marginal l y b e t t e r ( a t $1,379 per cow)
compared w i t h the average North I s l a n d farm ($1,323 per cow).
4.3.2.
Types of M i l k Payments Received
The average North I s l a n d farmer received $1,148 f o r quota m i l k
per d a i r y productive hectare (see Table 20). T h i s was 26 per c e n t
g r e a t e r than the amount received per hectare f o r quota m i l k by South
I s l a n d producers.
North I s l a n d producers a1 so received 20 per c e n t
more payment per hectare f o r t h e i r surplus m i l k . However t h e South
Is l and producers r e c e i ved more in speci a1 a1 1owances, premi ums and farm
c h i l l i n g allowances per farm.
TABLE 19
Gross Revenue Components
North I s l a n d
Per
Farm
Total Li t r e s Produced
522,809
Cows i n Milk i n Dec. 1985
115.60
Uai ry Prod. Hectares
76.61
South I s l a n d
New Zealand
Per
Cow
Per Dairy
Prod. ha
Per
Farm
Per
Cow
Per Dairy
Prod. ha
Per
Farm
Per
Cow
Per Dairy
Prod. ha
4,523
6,824
506,105
101.72
87.75
4,975
5,768
516,188
110.10
81.02
4,688
6,371
1,323
1,996
140,243
1,379
1,598
147,914
1,343
1,826
Milk S a l e s
Produce Sold
Wool and Skins Sold
Contracting Fees
Rent and Lease Fees
Employee's House
Livestock P r o f i t
- Dairy
- Other Stock
Other Revenue
Gross Revenue
152,947
TABLE 20
Types o f i d i l k Payments Received
North I s l a n d
Number Surveyed
T o t a l L i t r e s Produced
Cows i n M i l k i n
December 1985
Oai ry P r o d u c t i v e Hectares
South I s l a n d
New Zeal and
76
522,809
76
506,105
152
516,188
115,60
76.61
101.72
87.75
110.10
81.02
Per
Farm
$
Per
Dairy
Prod. Ha
Per
Per
Uai r y
Farm Prod. Ha
Per
Farm
Per
Dairy
Prod. Ha.
$
$
$
$
$
1,715
119,672
1,364
126,753
1,565
Payment Received f o r M i l k
P a i d a t Quota P r i c e s
Payment Received f o r
Milk Paid a t
Surplus P r i c e s
Speci a1 P r o d u c t i on
A1 1owances
Premi ums Received o r
Penal t i e s P a i d
Farm C h i l l i n g
A1 1owances
End o f Season,
R e t r o s p e c t i v e and
Other Payments
T o t a l M i 1 k Payments
Recei ved
4.4
131,401
Expenditure
4.4.1.
Farm Expendi t u r e
F o r t h e average New Zeal and farm, t o t a l e x p e n d i t u r e i n c r e a s e d
from $1,311 p e r d a i r y p r o d u c t i v e h e c t a r e (1984-85) t o $1,413 p e r
hectare, an i n c r e a s e of 8 p e r c e n t ( T a b l e 21). The l a r g e s t s e c t o r
percentage i n c r e a s e p e r h e c t a r e was overhead expenses which r o s e 16 p e r
c e n t f o l 1owed by 1 abour, admini s t r a t i on, and o p e r a t i on expenses.
Among t h e o p e r a t i n g expenses f o r t h e average New Zealand town
m i l k farm l a r g e r i s e s p e r h e c t a r e were recorded f o r c o n t r a c t o r s ( u p 42
p e r c e n t t o $42 p e r h e c t a r e ) , e l e c t r i c i t y expenses (up 25 p e r c e n t t o
$35 p e r h e c t a r e o r $26 p e r cow), and g r a z i n g expenses (up 17 p e r c e n t
t o $27 p e r h e c t a r e ) .
Reductions were recorded f o r weed and p e s t
expenses and i r r i g a t i o n . The 1 a r g e s t o f a1 1 i n d i v i d u a l expenses p e r
cow were i n t e r e s t ($176 p e r cow), f o l l o w e d by r e p a i r s and maintenance
($116) and v e h i c l e expenses ($89 p e r cow).
Fann Expendi t u r e Components
North I s l a n d
Per
Farm
522,809
115.60
76 - 6 1
T o t a l L i t r e s Produced
Cows i n M i l k i n Oec.'85
Dai r y Prod. Hectares
Labour
.
Sub-Total Labour
--
-
Per
Dai r y
Prod. ha.
4,523
6,824
$
$
2,219
468
19
4
1U,231
3,441
439
Per
Dec.
Cows
Per
Farm
5U6,105
101.72
87.75
New Zealand
Per
Oai r y
Prod. ha
Per
Farm
516,188
110.10
81.02
Per
Dec
Cow
5,768
$
$
$
29
6
3,739
611
37
6
42
7
2,821
524
25
5
35
7
88
30
4
133
45
6
7,709
4,446
532
76
44
9,232
3,839
476
84
35
4
114
47
5
88
51
6
16,798
145
219
17,037
168
194
16,892
153
209
55,369
479
723
56,984
560
6 49
56,008
509
691
$
4,688
Per
Uai r y
Prod. ha.
4,975
$
F a m i l y Labour
Fami 1y Casual Labour
Non-Family Permanent
& Casual Labour
Unpaid F a m i l y Labour
Labour Accommodation
Per
Oec.
Cows
South I s l a n d
$
6,371
$
6
--
Operating
Animal Heal t h
Breeding & Herd T e s t i n g
Contractors
D a i r y Shed Expenses
Electricity
F e r t i l i s e r 8 Seed
Feed
Grazing Expenses
Freight
geed & P e s t Expenses
V e h i c l e Expenses
Repai r s 6 :4ai @Itenance
I r r i g a t i o n Expenses
S u b - t o t a l Operati ng
Tab1 e 2 1 c o n t i n u e d
...
L2'
nL
-7
aJ
-a
n a o
b4
NWLn
h m o
o w m
N W N N
m 4 w m
mcoww
*cod-V)
?2'-%*n
4
N W N N
FIGURE 10
Farm Expenditure Sub-groups
per D a i r y P r o d u c t i v e Hectare i n Both I s l a n d s
DOLLARS SUM
l SLAND
NORTH A d m i n i s t r a t i o n
47
Labour Expenses
219
Net D e p r e c i a t i o n
117
Operat i n g
723
Overheads
SOUTH A d m i n i s t r a t i o n
I-
Labour Expenses
Net D e p r e c i a t i o n
Operating
649
Overheads
273
71--7.7--l--'-l-rl--T-rT?
0
100 200 300 400 500 600 700 800
D o l l o r s per D a i r y P r o d u c t i v e H e c t a r e
Comparing t h e per cow r e s u l t s from t h e two Islands, t h e N o r t h
I s l a n d farmer spent more on grazing, non-family labour, f e r t i l i z e r and
seed, r e n t and i n t e r e s t . N o r t h I s l a n d g r a z i n g expenses ( a t $27 p e r
cow) were n e a r l y f o u r times g r e a t e r than t h e South I s l a n d r e s u l t p e r
cow ( $ 7 ) .
Non-family l a b o u r expenses i n t h e North I s l a n d were 16 p e r
c e n t h i g h e r p e r cow ($88 compared w i t h $76 i n t h e South).
Fertilizer
and seed expenses ($82 per cow) were 22 per c e n t h i g h e r i n t h e North.
Rent a t $50 p e r cow was 100 p e r c e n t h i g h e r than i n t h e South.
I n t h e South I s l a n d t h e major percentage c o s t d i f f e r e n c e s p e r
cow were i r r i g a t i o n (seven do1 1a r s per cow compared w i t h one do1 l a r ) ,
f a m i l y l a b o u r (95 p e r c e n t h i g h e r ) , feed c o s t s ( 7 3 per c e n t above t h e
North I s l a n d a t $88 per cow), c o n t r a c t i n g (57 p e r c e n t h i g h e r ) , and
f r e i g h t (67 p e r c e n t g r e a t e r a t $10 p e r cow). Other South I s l a n d c o s t s
w i t h l a r g e . . percentage d i f f e r e n c e s p e r cow were insurance (up 44 p e r
c e n t ) , v e h i c l e expenses (up 3 1 p e r c e n t ) , and d e p r e c i a t i o n ( a t $95 p e r
cow o r 22 p e r c e n t h i g h e r than the North I s l a n d per cow r e s u l t ) .
Operating expenses p e r m i 1k i n g cow a r e compared between t h e two I s l a n d s
i n F i g u r e 12.
For both Islands the largest cost items per productive hectare
were interest followed by repairs and maintenance, non-family labour,
f e r t i l iser and seed, vehicle expenses, depreciation, and feed.
The
biggest cost was interest a t $280 per hectare in the North and $187 per
hectare i n the South - a 50 per cent difference, followed by repairs
and maintenance ($163 and $151 per hectare - an eight per cent
difference) , non-family labour ($133 and $88 - a 51 per cent
difference), f e r t i l i s e r and seed ($123 and $78 per hectare - 58 per
cent difference), vehicle expenses ($121 and $122 per hectare - almost
no difference) and depreciation ($117 per hectare i n the North Island
and $110 per hectare in the South - a six per cent difference).
--
Expenditure per December milking cow for the past five surveys
i s l i s t e d i n Figure 11.
FIGURE 11
Five Years Expenditure per December Milking Cow
EXPEND SUM
Year
1981-82
E x p e n d i t u r e p e r Dec. M i l k i n g Cow
FIGURE 12
Operating Expenses per December Milking Cow
in Both Islands
WE
Animal I i o a l T
ISLAND
m b y l
Snulh
Brtsding
North
Sou t h
Contractors
Horth
South
Dairy Shsd
Horth
South
Elsctricity
North
South
Fetd
Fort.
Horth
South
t
Sssd
North
1
South
Freight
North
Soulh
Grazlng Expsnnsa
North
1
South
Irrigolion
North
South
Repair, k Moinl.
Vehicle Expent81
I
Horlh
South
7
North
South
Vssd k Peat
4.4.2.
Horth
b
Oeureciation of Farm Assets
Net depreciation (Table 22) f e l l by 15 per cent compared w i t h
the previous survey year from $10,558 t o $9,214 f o r the average New
Zealand farm. The f a l l was g r e a t e r i n the North Island (down by 18 per
c e n t ) compared with the South Is1 and (down by 10 per c e n t ) .
Total gross depreciation f o r New Zealand f e l l by 16 per cent t o
$9,948 compared with the previous 1984-85 year. The average North
Island f a m had a decrease of 22 per cent with the South Island average
farm showing a smaller f a l l of 9 per cent. Gross depreciation r e s u l t s
f o r the two Islands a r e compared in Figure 13.
TABLE 22
Depreciation
o f Farm Assets
North I s l a n d
Number Surveyed
Total L i t r e s Produced
Cows i n M i l k i n
December 1985
Dai ry Productive Hectares
South I s l a n d
New Zeal and
76
522,809
115.60
76.61
Farm Bui 1d i n g s
P l a n t ti Equi pment
Farm Vehicles
2,388
2,161
5,092
Gross Depreci a t i on
Less Personal Car
Depreciation
Less D e p r e c i a t i o n
Recovered
9,641
Net D e p r e c i a t i o n
8,948
9,620
9,214
17,845
19,896
18,656
Cost of New Assets
427
266
4.5
Farm Income
4.5.1.
Net Farm Income
New Zeal and net farm income (before taxation) averaged $33,403
in 1985-86 on a 81.02 dairy productive hectare area. This was 4.5 per
cent higher than the previous years per farm r e s u l t of $31,960 (84.75
dairy productive hectares). The net farm income per dairy productive
hectare for 1985-86 was $412 per hectare and t h i s was nine per cent up
on the previous year ($377 per hectare). Two years before in 1984-85
the net farm income per hectare f o r the average New Zealand farm had
been $319 per hectare. (See Figure 1 5 ) .
In Figure 14 detail s of gross revenue and net farm income
dairy productive hectare are drawn f o r the two Islands.
per
The New Zealand net farm income per December milking cow was
$303. The North Island r e s u l t ($311 per cow) was seven per cent higher
than in the South ($290 per cow). This difference was due t o the
higher expenses per cow in the South. Revenue per cow in both Islands
was 4-2 per cent d i f f e r e n t ($1,323 and $1,379 per cow) b u t expenditure
in the South Island was 7.6 per cent greater ( a t $1,089 compared with
$1,012 per cow in the North). Survey results from f i v e years net farm
income per December milking cow are detailed in Figure 16.
In the North Island total net farm income ( f o r a 76.61
productive hectare farm) was $35,976. This was 5.6 per cent l e s s than
the previous year (82.72 productive hectare area). The increase in the
S o u t h Island was more substantial (30 per, cent). The average South
Island 87.75 productive hectare farm had a net farm income of $29,480.
In the previous year a similar average sized farm (87.88 hectares) had
an income of $22,704.
FIGURE 13
Gross Depreciation of Farm Assets i n Both Islands
DOLLARS SUM
l SLAND
TYPE
-
North Buildings
Plant h Equip
Vehicles
South Buildings
u
Plant & ~ ~ u i ~ l
Vehicles
3
1
Dol lars
TABLE 23
Net Farm Income Components
North
522,809
4,523
6,824
115.60
76.61
152,947
116,971
Net Farm Income
Per
Farm
506,105
New Zealand
Per
Per
Dec.
Dairy
Cows Prod. ha
4,975
5,768
101.72
87.75
5
Gross Revenue
Total Expenditure
South Island
Per
Per
Dec.
Dairy
Cows Prod. ha.
Per
Farm
Total Litres Produced
Cows in Milk in
Uec. 1985
Dairy Prod. Hectares
Island
$
$
1,323
1,012
1,996
1,527
469
35,976
311
Per
Farm
Per
Dec
Cow
516,188
4,688
5
$
$
140,244
110,764
1,379
1,089
1,598
1,262
29,480
290
336
$
147,913
114,510
33,403
$
1,343
1,040
303
I
FIGURE 14
Net Farm Income Components
per Dairy P r o d u c t i v e H e c t a r e i n Both I s l a n d s
DOLLARS SUM
TYPE
NORTH Gross Revenue
1996
T o t a l Expend.
1527
Gross Revenue
F'
T o t a l Expend.
7
Net l ncome
SOUTH
6,371
110.10
81.02
I
l SLAND
Per
Dairy
Prod. ha.
1598
1
Net Income
336
D o l l a r s per D a i r y Prod. Hectare
$
1,825
1,413
412
FIGURE 15
Five Years Net Farm Income per Dairy Productive Hectare
INCOME SUM
Year
1981-82
1982-83
1983-84
1984-$5
1985-86
Net Income per Dairy Productive Hectare
FIGURE 16
Five Years Net Farm Income per December Milking Cow
Year
-I
1981-82,
'
-
N e t Farm l ncome per D e c .
Mi l k i n g
Cow
4.5.2.
Cash Surplus
D e t a i l s o f t h e cash s u r p l u s a v a i l a b l e t o farmers a f t e r t h e
y e a r ' s f a r m i n g a r e l i s t e d i n Table 24. Imputed revenue and c o s t
con~ponents such as a1 1owances f o r t h e employee' s house and f a m i l y
l a b o u r a r e excluded. T a x a t i o n has n o t been deducted.
Cash s u r p l u s from f a r m i n g f e l l s l i g h t l y t o $44,225.
T h i s was
1ess t h a n t h e p r e v i o u s survey r e s u l t s ($45,060).
The N o r t h I s 1and
r e s u l t decreased from $51,053 t o $45,507.
The South I s l a n d i n c r e a s e d
from $35,847 t o $42,271.
Cash r e c e i p t s f o r t h e average New Zealand farm were up by two
p e r c e n t w i t h cash expenses i n c r e a s i n g by 3.6 p e r cent. I n t h e N o r t h
I s l a n d cash r e c e i v e d f e l l m a r g i n a l l y b u t cash spent r o s e by 4.5 p e r
c e n t . I n t h e South b o t h cash r e c e i v e d and cash spent i n c r e a s e d ( t h e
former by 2.3 p e r c e n t and t h e l a t t e r by 6.5 p e r c e n t ) .
D a i r y c a t t l e s a l e r e c e i p t s showed a decrease over t h e p r e v i o u s
y e a r . F o r t h e average New Zealand farm, d a i r y c a t t l e s a l e s decreased
from $16,652 t o $12,392.
4.5.3.
Farm Incomes Less Imputed I n t e r e s t Rates
I n Table 25 an imputed i n t e r e s t r a t e (eg. 3.5 p e r c e n t ) was
a p p l i e d f i r s t t o t h e e q u i t y o f t h e farmer. The r e s u l t i n g f i g u r e was
then deducted from t h e n e t farm income. The a c t u a l i n t e r e s t p a i d was
l e f t i n as an expense.
S i m i l a r l y an imputed i n t e r e s t was a p p l i e d t o t h e t o t a l v a l u e o f
farm assets.
The r e s u l t i n g f i g u r e was then deducted from t h e sum o f
n e t farm income p l u s a c t u a l i n t e r e s t paid.
T h i s second approach
e l i m i n a t e s any d i f f e r e n c e s t h a t o c c u r r e d i n n e t farm incomes due t o
a c t u a l i n t e r e s t payments and assumes t h a t t h e farms were d e b t f r e e .
TABLE 24
Cash Surplus from Farming
( $ per Farm)
-
North Is1 and
Number Surveyed
76
522,809
Total L i t r e s Produced
Cows in Milk i n
December 1985
115.60
Dai ry Producti ve Hectares
76.61
1.
South Island
New Zeal and
76
506,105
152
516,188
101.72
87.75
110.10
81.02
Cash Received
Milk Sales
Dairy C a t t l e
Sales
Sheep and Beef
Sales
Bobby Cal f
Sales
Other Farm
Income
131,401
119,672
126,753
12,228
12,642
12,392
170
832
432
3,554
3,028
3,346
5,708
7,086
6,254
Total Recei ved
153,061
143,260
149,177
100,989
104,952
2.
Cash Spent
Labour and Operating
Overhead and Admi n.
Dairy Purchases
Sheep and Beef C a t t l e
Purchases
Total Spent
Cash Surplus from
Farmi ng
68,286
35,856
3,087
325
107 ,554
45,507
TABLE 25
Net Farm Income Less Imputed I n t e r e s t on E q u i t y and
T o t a l Assets
North I s l a n d
Number Surveyed
T o t a l L i t r e s Produced
Cows i n M i l k i n
December 1985
Dairy Productive
Hectares
76
522,809
Equi t y
Net Farm Income
495,708
35,976
A.
Net Farm Income
l e s s Imputed
I n t e r e s t on E q u i t y
a t Rate o f : 3.5%
5%
7%
T o t a l Farm Assets
Net Farm Income
I n t e r e s t Paid
B.
Net Farm Income
l e s s Imputed
I n t e r e s t on T o t a l
Farm Assets a t
Kate o f : 3.5%
5%
7%
South I s l a n d
New Zeal and
76
506,105
152
516,188
115.60
101.72
110.10
76.61
87.75
81.02
18,626
11,191
1,276
645,301
35,976
21,446
34,836
25,157
12,251
4.5.4.
Measures of Economic P r o f it a b i 1 it y
An attempt has been made i n Table 26 t o a l l o w a comparison o f
r e s u l t s from t h i s town m i l k survey w i t h t h e r e s u l t s pub1 ished i n t h e NZ
Meat and Wool Board's Economic Service Survey o f sheep and beef farms
Most o f t h e terms used here a r e p a r t i c u l a r t o t h i s t a b l e and a r e n o t
found e l sewhere i n t h i s r e p o r t . They are d e f i n e d i n Appendix B.
."
The c a l c u l a t e d r a t e of r e t u r n on farm c a p i t a l i n v e s t e d f o r t h e
The
average New Zealand town m i l k farm was 4.96 per c e n t (Table 26).
North I s l a n d r e t u r n was 4.94 per c e n t and t h e South I s l a n d 4.99 p e r
c e n t (See F i g u r e 17).
The c a p i t a 1 turnover percentage i s the r a t i o o f gross revenue
( l e s s worker's house) t o t o t a l farm c a p i t a l expressed as a percentage.
I n 1985-86 t h e average New Zealand farm had a c a p i t a l t u r n o v e r
percentage o f 20.33 per cent.
The l a b o u r and management r e s i d u a l i s an assessment o f what t h e
farmer earns as a reward f o r h i s own labour and management, given t h a t
he pays i n t e r e s t a t 12.0 per c e n t on h i s own e q u i t y c a p i t a l , i n
a d d i t i o n t o t h e i n t e r e s t he already pays on borrowed c a p i t a l . The New
Zeland average town m i l k r e s i d u a l was - $36,815.
4.6
P r i n c i p a l Revenue and E x ~ e n dt iu r e Corn~onents
M i l k sales represented 86 per c e n t o f t o t a l revenue i n
c u r r e n t survey (Table 27). This was more than the 1984-85 survey
per c e n t )
.
the
(83
The major expenditure sub-group
was o p e r a t i n g
expenses.
Operating expenses make up h a l f the t o t a l expenses on t h e average town
m i 1k farm.
The next major
expenditure sub-group was overheads,
followed by l a b o u r expenses.
As a percentage o f t o t a l expenses a l l expenditure
f o r the two i s l a n d s were s i m i l a r t o those o f 1984-85.
6
sub-groups
New Zealand Meat and Wool Board's Economic Service, Sheep &
Beef Farm Survey, 1984-85 p.56.
TABLE 26
Measures o f Economic P r o f i t a b i l i t y
North I s l a n d
South I s l a n d
New Zeal and
76
69.05
76
84.54
152
75.19
71,923
72,232
72,044
22,399
19,820
21,377
94,322
92,052
93,421
7,857
7,668
7,782
661,222
415,840
564,014
31,516
11,986
29,960
19,936
30,900
15,135
15,393
16,786
15,945
97,223
82,787
91,505
Number Surveyed
Freehold Land Area ( h a )
$
A.
Return on C a p i t a l
1.
Worki ng Expenses
( l e s s imputed c o s t s )
P l u s assessed
Manageri a1 Reward
2.
3.
4.
T o t a l Adjusted Working
Expenses (1+2)
Worki ng C a p i t a l
(8.33% o f 3 )
Freehol d, Rented and
Grazi ng-Out Land
Bui 1 d i ngs ( 1ess
Farmer's House)
P l a n t & Equipment
Farm V e h i c l e s ( l e s s
Car a t $10,548)
L i v e s t o c k a t Market
Val ue
5.
Farm C a p i t a l
817,340
565,309
717,499
6.
T o t a l Farm C a p i t a l
(4+5)
Net Farm Income
P l u s I n t e r e s t Paid
P l u s Rent P a i d
825,197
35,976
21,446
5,762
572,977
29,480
16,388
2,556
725,281
33,403
19,442
4,491
63,184
48,424
57,336
22,399
19,820
21,377
40,785
28,604
35,959
7.
8.
9.
10.
11.
12.
13.
Sub-total (7+8+9)
Less Managerial
Reward ( 2 )
Economic Farm Surplus
( 10-11 )
Rate o f Return
percentage ( 12/6)
4.94%
( T a b l e 26 c o n t i n u e d
4.99%
...)
4.96%
TABLE 26 continued
Measure o f Economic P r o f i t a b i l i t v a
North I s l a n d
k.
South I s l a n d
New Zeal and
Capi t a l Turnover Percentage
$
14.
15.
16.
Gross Revenue
( 1ess Worker' s
152,535
house)
Total Farm
825,197
Capital ( 6 )
Capi t a l Turnover
Percentage (14115) 18.48%
C.
Labour & Management
Kesources
17.
T o t a l Farm
Capital ( 6 )
Plus Cash a t Bank,
Sundry Debtors &
Other Current
Assets
18.
19.
20.
21.
Sub-total (17+18)
Less F i x e d
Liabilities
Less Current
Liabilities
825,197
572,977
725,281
19,359
26,528
22,200
844,556
599,505
747,481
148,490
129,694
141,042
20,462
22,564
21,293
675,604
447,247
29,480 .
585,146
33,403
53,670
70,218
-24,190
-36,815
22.
Total E q u i t y Capi t a l
23.
Net Farm Income ( 7 )
35,976
Less 12 .OX o f E q u i t y
Capital (22)
81,073
Labour & Management
Resi dual (23-24)
-45,097
( 19-20-21 )
24.
25.
a
Most o f the terms used i n t h i s t a b l e a r e p a r t i c u l a r t o t h i s
alone; they are defined i n Appendix B.
table
47
FIGURE 17
Two Measures o f Economic P r o f it a b i l it y
i n Both I s l a n d s
SUM
lSLAND
TYPE
-
N o r t h C a p i t a l Turnover
l-----A
Rat. on C a p i t a l
South C a p i t a l Turnover
R e t . on C a p i t o l
Percent
TABLE 27
Revenue and E x ~ e n dt iu r e P r o ~ o r t i o n s
Number o f Farms
North
South
Is1 and
I s1 and
New
Zeal and
76
76
152
%
%
%
100
100
100
100
100
100
Gross Revenue
M i l k Sales
Livestock P r o f i t
Other Revenue
T o t a l Revenue Percentage
Expenditure
Labour
Operating
Admini s t r a t i o n
Overheads
Depreciation
T o t a l Expenditure Percentage
Expenditure/Revenue
R a t io
APPENDIX A
PRODUCER ASSOCIATIONS INCLUDED I N SURVEY
NORTH ISLAND
Bay o f I s l a n d s Co-op M i l k Producers' L t d
Whangarei ~ q i l kProducers L t d
N o r t h Shore Co-op M i l k Producers L t d
Auckland Co-op M i l k Producers L t d
Tne New Zeal and Co-op D a i r y Co. L t d , Auckland
F r a n k l i n Co-op M i l k Producers L t d
Tharnes Val 1 ey M i 1 k Producers L t d
Hamilton M i l k Producers Co. L t d
Aestern Bay o f P l e n t y (Co-op) M i l k Producers L t d , Tauranga
E a s t e r n Bay o f P l e n t y (Co-op) M i l k Producers L t d , Whakatane
Rotorua Co-op M i l k Producers Co. L t d
Tokoroa Co-op M i l k Producers Co. L t d
Gisborne Co-op M i l k Producers Assn L t d
Hawkes Bay N i l k Producers Co-op L t d
New Plymouth Town K i 1 k Co-op L t d
Egmont Town M i l k Co-op L t d
Wanganui Co-op M i l k Supply Co. L t d
Manawatu Co-op M i l k Producers Co. L t d
Wairarapa Town M i l k L t d
We1 1 i n g t o n D a i r y Farmers Co-op Assn L t d
SOUTH ISLAND
hiel son Co-op M i l k Producers Assn L t d
Blenheim Co-op M i l k Supply Co. L t d
Bul le r Co-op M i 1 k Producers Assn L t d
Grey D i s t r i c t Co-op M i l k Producers Assn L t d
Canterbury Dai ry Farmers L t d
Metropol i t a n M i l k ( ChCh) L t d
Ashburton Town M i 1 ~Producers Co-op Co. L t d
South Canterbury Co-op M i l k Supply Co. L t d , Timaru
N o r t h Otayo Co-op M i l k Supply Co. L t d , Oarnaru
D a i r y Fanners Co-op M i l k Supply Co. L t d , Dunedin
South1 and Co-op M i 1 k Producers L t d , I n v e r c a r g i l l
SURVEY DEFINITIONS AND TREATMENT OF OATA
The same basic survey p r i n c i p l e s and procedures have been
adopted as i n surveys o f previous years. The f o l l o w i n g d e f i n i t i o n s and
p r i n c i p l e s were adopted i n e x t r a c t i n g data from each farm.
FARM AREA:
T o t a l Farm Area
T h i s was the t o t a l area farmed by t h e producer d u r i n g h i s
1985-86 f i n a n c i a l year. I t i n c l u d e d r e n t e d l a n d and r u n - o f f u n i t s , b u t
d i d n o t i n c l u d e any ' g r a z i ng o u t ' land.
Productive Farm Area
The p r o d u c t i v e area o f t h e farm i n c l u d e d the l a n d t o which
stock had r e g u l a r access. I t was t h e area grazed by stock, l e s s t h e
area i n roads, yards, races and farm b u i l d i n g s . The p r o d u c t i v e area o f
r u n - o f f u n i t s was a1 so included. Areas under swamp, steep g u l l i e s ,
r i v e r b e d s and dense bush were excluded.
Productive Farm Area Used f o r Dairy Stock
This was the estimated t o t a l p r o d u c t i v e area o f l a n d used f o r
pasture and fodder production f o r d a i r y stock grazing d u r i n g t h e income
year. Estimated areas used f o r beef c a t t l e and sheep g r a z i n g have been
deducted.
A l l grazing o u t areas used by farmers d u r i n g t h e y e a r have
been converted t o an annual grazing area and are i n c l u d e d i n t h e
estimated area.
Run-Off U n i t s
Run-off u n i t s were l a n d areas separated from the main farm and
were mainly used t o r e a r young d a i r y stock o r c a r r y o t h e r stock from
time t o time. Run-off u n i t s were i n c l u d e d i n t h e t o t a l frarn area.
LABOUR
Labour U n i t s
A labour u n i t was defined as a worker, whether owner o r
employee, who worked on t h e farm f u l l t i m e over t h e survey p e r i o d .
F r a c t i o n a l u n i t s o f labour were used when i n c l uding work c a r r i e d o u t on
a p a r t year o r p a r t t i m e basis. Any work c a r r i e d o u t by c h i l d r e n under
12 years was ignored. The f a r m e r ' s spouse, cadet and student workers
were assessed according t o t h e amount o f u s e f u l work c a r r i e d out.
QUOTA
T h i s was the average d a i l y quota p e r farm f o r
1985-86 f i n a n c i a l year.
the
farmer's
MILK GRADES
M i l k grades are d e f i n e d by t h e N.Z.
M i l k Board as f o l l o w s :
F i n e s t Grade: For m i l k which passes a f i v e - h o u r reductase t e s t
w i t h t h e accepted n a t i o n a l
and which, whi 1e general l y complyi ng
standard of 4.3 per c e n t f a t f o r town m i l k , does n o t f a l l below 3.5 p e r
cent f a t .
F i r s t Grade: For m i l k which passes a three-hour reductase t e s t
b u t f a i l s t o pass t h e f i v e - h o u r t e s t and / o r which c o n t a i n s 3.25 p e r
c e n t f a t b u t n o t 3.5 per c e n t f a t .
Second Grade:
F o r m i l k which f a i l s t o pass a
reductase t e s t and/or c o n t a i n s l e s s than 3.25 per c e n t f a t .
three-hour
REVENUE
Total M i l k Sales
The value o f a l l m i l k sales was e x t r a c t e d from each s e t o f
accounts and checked a g a i n s t t h e monthly m i l k payments as provided by
M i 1k r e c e i p t s in c l ude a1 1 re1evant speci a1
each producers company.
payments made by t h e producer company d u r i n g t h e farm's f i n a n c i a l year.
Produce Sold
Proceeds from the s a l e o f o t h e r farm produce, e.g.
cereals, hay
etc.
C o n t r a c t i n g Fees
Gross proceeds frorn c o n t r a c t i n g work undertaken by t h e
o r h i s employees e.g.
fencing, haybal ing, b u l l dozing etc.
farmer
Rent and Lease Fees
Grazing fees o r r e n t received from farm cottages o r land.
E m ~ovee
l
' s House and Produce
T h i s value i s the sum o f t h e annual imputed r e n t a l o f $1,560
f o r t h e farm employee's house and $190 per annum allowance f o r each
m a r r i e d non-family permanent worker f o r produce used. The f i g u r e o f
$190 per annum f o r produce used p e r f u l l - t i m e married l a b o u r u n i t was
adopted t o cover m i l k , meat, vegetables and firewood used.
This
allowance was n o t extended t o the owner o r members o f t h e farm f a m i l y .
The value o f produce used was a l s o included i n labour accommodation
expenses.
Livestock P r o f i t
Stock p r o f i t from t h e l i v e s t o c k t r a d i n g accounts. The survey
standard values were a p p l i e d t o a l l l i v e s t o c k . Stock balances were
d e r i v e d w i t h t h e a i d o f t h e farmer and farm accounts.
Other Revenue
Sales o f timber, posts, and sundry items, and i n t e r e s t from
Dai r y Company shares and investments. Government 1 ivestock s u b s i d i e s
and drought r e l i e f payments a r e a l s o i n c l u d e d .
Gross Revenue
Sum o f a1 1 t h e above income items.
been assessed i n t h e survey.
Non-farm income
has
not
I t does
not
EXPENDITUKE
Family Permanent Labour
Actual wages p a i d t o permanent f a m i l y members.
i n c l u d e any s a l a r y o r management f e e p a i d t o owner.
Value o f Labour U n i t
A standard wage o f $13,145 p e r annum, w i t h t h e p r o v i s i o n o f a
house, was assumed f o r t h e imputed wage o f a d u l t workers o v e r 20 y e a r s .
T h i s f i g u r e was based on t h e a d u l t award wage f o r d a i r y farm workers
from 1 September 1985 o f $8,978 p e r annum. A f u r t h e r $4,167 was added
t o cornpensate f o r t h e 12 months m i l k i n g requirement on a town-milk farm
and t h e p r o x i m i t y o f a l t e r n a t i v e employment o p p o r t u n i t i e s . The imputed
wage based on a 54 hour week f o r youths between 12 and 20 y e a r s o f age
was t h e award r a t e f o r 18 y e a r 01 ds o f $7,371 p e r annum. The mean New
Zeal and adul t annual wage p a i d on surveyed town m i 1 k farms i n 1984-85
was $11,519.
Non-Fami l y Permanent and Casual Labour
Wages p a i d t o permanent and casual n o n - f a m i l y members. Casual
wages in c l ude wages p a i d f o r r e 1 ie f mi 1 k i n g , casual f e e d i n g , haymaki ng
e t c . d u r i n g t h e year. C o n t r a c t o r s ' work i s excluded.
Unpaid Fanii l y Labour
The v a l u e o f unpaid f a m i l y l a b o u r was assessed as f o l l o w s :
A d u l t s o v e r 20 y e a r s o f age
12-20 y e a r o l d y o u t h s and g i r l s
Chi1 dren under 12 y e a r s
$4.68 p e r hour
$2.63 p e r hour
N i1
The t i m e worked by f a m i l y members up t o a maximum o f 54 hours
per week was assessed and an imputed t o t a l wage c a l c u l a t e d . I f a wage
was p a i d and l i s t e d i n t h e accounts, t h i s was n o t e d under f a m i l y l a b o u r
and deducted frorn t h e assessed t o t a l . Any balance was l i s t e d as u n p a i d
family labour.
I f two b r o t h e r s worked f u l l - t i m e as a p a r t n e r s h i p , t h e
farm was a d j u s t e d t o a s o l e ownership e n t e r p r i s e and one b r o t h e r was
a l l o c a t e d an imputed wage o f $13,145 p e r annum.
Labour Accommodation
T h i s was c a l c u l a t e d as the sum o f t h e imputed r e n t a l value o f
the farm c o t t a g e of $1,560 per annum and $190 per annum f o r produce
used by non-family permanent workers.
F u l l board was assessed a t
$1,000 per y e a r per person.
C o n t r a c t i nq
Payment t o c o n t r a c t o r s f o r work done, such as
fencing, c u l t i v a t i o n , hay o r s i 1age making and harvesting.
bulldozing,
Animal Heal t h
Thi s amount i n c l udes a1 1 v e t e r i n a r y fees
c o n t r o l and f a c i a l eczema c o n t r o l .
and
drugs,
bloat
Breeding and Herd T e s t i n g
A r t i f i c i a1 breedi ng , herd t e s t i n g and pedigree expenses.
Shed Expenses
Rubberware, ropes, buckets, cleansers and miscellaneous
f o r sheds. Rebates have been deducted where a p p l i c a b l e .
items
Electricity
Electricity
domestic account.
used
on
t h e farm and up t o
one-quarter
of
the
F e r t i l i s e r and Seed
Includes c o s t o f f e r t i l i s e r , seeds
Subsides and rebates have been deducted.
and
spreading
charges.
Feed
Purchases o f hay, straw, dai r y i ng meal , g r a i ns, mineral s, c a l f
food and miscellaneous items such as b a l e r twine.
Rebates were
deducted where appl icab1 e.
Grazi na E x ~ e n s e s
Grazing fees i n c u r r e d d u r i n g the year.
Weed and Pest Control
T h i s amount includes c o s t o f m a t e r i a l s and spraying work.
some cases where i t i s n o t itemi sed t h e c o s t o f spraying work
i n c l u d e d i n c o n t r a c t i n g expenses.
In
is
V e h i c l e Expenses
I n c l udes f u e l , r e p a i r s , 1icences, r e g i s t r a t i on, i n s u r a n c e and
- so on f o r a l l v e h i c l e s i n c l u d i n g farm b i k e s . Personal allowances f o r
v e h i c l e r u n n i n g have been deducted where t h e y were shown i n accounts.
Repai r s and Mai ntenance
R e p a i r s t o b u i l d i n g s , p l a n t , fences, water supply, races e t c .
T h i s item a1 so i n c l u d e s 25 p e r c e n t o f r e p a i r s t o t h e f a r m e r ' s house.
I f t h i s amount i s d e t a i l e d i n t h e f a r m e r ' s accounts,
been combined w i t h Repairs and Maintenance i n t h e r e s u l t s .
it
has
I r r i g a t i o n Expenses
Repairs
electricity.
t o i r r i g a t i o n equipment and r u n n i n g c o s t s f o r f u e l
or
Accountancv
Accountancy fees p a i d on a1 l farm accounts.
Pel ephone
Tel ephone r e n t a l s and t o 1 1 s.
General Admi n i s t r a t i on
Admini s t r a t i o n iterns n o t a1 l o c a t e d
e l sewhere, e.g.
farm
advi sory services, 1egal fees, s u b s c r i p t i o n s , t r a v e l 1 ing expenses and
sundry o t h e r admi n i s t r a t i on iterns.
Insurance
General insurance o f farm assets.
Interest
The i n t e r e s t p a i d i s t h a t 1 is t e d i n t h e accounts. I t does n o t
i n c l u d e any c a l c u l a t e d i n t e r e s t on t h e f a r m e r ' s e q u i t y c a p i t a l
.
Rates
The amounts p a i d t o County Council, Harbour Board,
Board, R a b b i t Board o r Drainage Board.
Catchment
Rent
Fees p a i d f o r Crown l e a s e o r o t h e r r e n t i n g .
i n t e r n a l r e n t s p a i d t o f a m i l y t r u s t s and companies e t c .
Excludes
all
D e p r e c i a t i o n o f Farm Bui 1 d i ngs
The o r i g i n a l c o s t val ues o f a1 1 farm b u i l d i n g s were used
determine d e p r e c i a t i o n .
Ordinary b u i l d i n g
depreciation rates
to
as
claimed f o r
depreciation
farm.
tax
purposes were
applied.
The
normal
taxation
r a t e was a p p l i e d t o t h e c o s t values o f a l l houses on t h e
D e p r e c i a t i o n o f Other Assets
D e p r e c i a t i o n on a l l o t h e r a s s e t s except farm b u i l d i n g s was a l s o
based on r a t e s used f o r t a x a t i o n purposes. A l l personal allowances f o r
d e p r e c i a t i o n ( e g motor c a r ) were deducted from t h e gross d e p r e c i a t i o n .
Net D e p r e c i a t i o n
I n c l u d e s a l l s p e c i a l and o r d i n a r y d e p r e c i a t i o n as c l a i m e d f o r
t a x purposes p l u s any l o s s on s a l e o f an a s s e t and l e s s any p r o f i t on
s a l e o f an asset.
T o t a l F a r n ~Expendi t u r e
Sum o f a l l t h e above e x p e n d i t u r e items.
Net Farm Incorne
Gross farm revenue 1ess t o t a l farin expenditure.
Cash Surplus frorn Farming
T h i s i s t h e d i f f e r e n c e between t h e cash r e c e i v e d and t h e cash
spent. lmputed revenue and c o s t components such as allowances f o r t h e
employee's house and f a m i l y l a b o u r a r e excluded. T a x a t i o n has n o t been
deducted.
CAPITAL STRUCTURE
-
ASSETS
Freehol d Land
The most r e c e n t Government c a p i t a l v a l u a t i o m f o r each farm was
o b t a i n e d from t h e farmer. T h i s was then updated t o December 1985 u s i n g
t h e New Zeal and A1 1 Farml and P r i c e Index pub1 ished by t h e V a l u a t i o n
Department.
Next, t h e opening book v a l u e o f each f a r m e r ' s b u i l d i n g s
was s u b t r a c t e d t o a r r i v e a t t h e updated l a n d value.
Land Val ue I n d i c e s
Year Ended
3 1 Uec.
N .Z. Farm1and
P r i c e Index
(June 1980 = 1,000)
Updating
Factor
Report o f t h e V a l u a t i o r l Departrnent f a r t h e
ended 31 March 1986, p.8.
year
57
Farmer s House
Half the average book value of the farmer's house i s included.
Dairy and Other Stock
Numbers of dairy and other stock i n the various c l a s s e s were
determined partly from the farm accounts and partly from discussions
w i t h the farmer. The following standard values per head were applied
t o the various c l a s s e s of stock:
Dairy Stock
A11 Cows
Hei f e r s - i n-cal f
Hei f e r
Year1 i ngs
Calves
$125
$100
$80
$50
$20
Young Bulls
Bull s
Sheep
Ewes
Hoggets - Ewe
- Ram
- Wether
Wethers
Rams
Beef C a t t l e
Cows
Heifer
-
calves
1 year
2 year
$125
$50
$50
$125
Steers - calves
- 1 year
- 2 year
Bulls - calves
- other
$50
$50
$125
$50
$200
In order t o allow comparisons of r e s u l t s w i t h previous surveys
the standard values applied t o a l l stock were the same a s f o r the
previous two surveys.
Cash a t Bank
Average value of a l l current accounts held a t banks
farm's financial year.
f o r the
Sundry Debtors
Average value of general sundry debts t o the farm account.
Most of this amount i s monthly milk payments due from the Producer
companies
.
Other Current Assets
The sum of a l l current and long term farm a s s e t s .
CAPITAL STRUCTURE
-
LIABILITIES
Current L i abi 1 it i e s
The average balance taken from t h e f a r m e r ' s balance sheets f o r
the various c u r r e n t 1 i a b l iti t i e s .
Fixed L i a b i l i t i e s
The average balance f o r a l l t h e f i x e d
mortgages and l o n g term loans.
liabilities
such
as
Equity
T h i s value i s obtained by s u b t r a c t i n g t h e value o f t o t a l
c u r r e n t and f i x e d 1 i a b i l i t i e s from t h e t o t a l value o f a l l assets.
TERMS USED I N MEASURES OF ECONOMIC PROFITABILITY'
Working Expenses
( e x c l udi ng imputed 1abour
Cash
payments f o r 1abour
accommodati on val ues) o p e r a t i ng and admi n i s t r a t i ve expenses.
and
Assessed Manageri a1 Reward
This i s an assessment of the payment t h a t should be imputed t o
an owner/operator f o r h i s own 1abour and management s k i 11. Cal c u l a t e d
by adding each quota group's imputed value o f farm worker's wage and
one per c e n t o f Farm C a p i t a l .
Working C a p i t a l
This i s estimated t o be one t w e l f t h o f the t o t a l a d j u s t e d
working expenses.
Since town supply farms have monthly m i l k cheques
bei ng p a i d i n t o t h e i r c u r r e n t accounts, one twel f t h , o f these expenses
i s considered a l a r g e enough p r o p o r t i o n . The Sheep and Beef Survey
a l l o w s 50 p e r c e n t o f these expenses, as income may be r e c e i v e d
infrequently.
Farm C a p i t a l
T h i s i s the sum of the c a p i t a l value o f l a n d and b u i l d i n g s
( e x c l u d i n g homestead), p l a n t and machinery, farm v e h i c l e s ( e x c l u d i n g
p r i v a t e c a r valued a t $10,548) and a l l l i v e s t o c k (valued a t market
val ues)
.
T o t a l Farm C a p i t a l
Thi s i s the sum o f Working and Farm C a p i t a l
NZ Meat and Wool Board's Economic Service.
Sheep and Beef Farm Survey 1984-85, p.56.
.
I n t e r e s t Paid
T h i s i s t h e i n t e r e s t p a i d from t h e annual accounts.
Kent- P a i d
This i s the actual r e n t paid.
Economic Farm Surplus
Thi s i s t h e d i f f e r e n c e between t h e sum o f n e t farm income,
s a l a r i e s paid, i n t e r e s t and r e n t , and t h e assessed managerial reward.
Rate o f Return
T h i s i s t h e r a t i o of t h e Economic Farm Surplus t o
Farm C a p i t a l expressed as a percentage.
the
Total
C a p i t a l Turnover Percentage
T h i s i s t h e r a t i o of Gross Revenue t o T o t a l Farm C a p i t a l
expressed as a percentage. It g i v e s an i n d i c a t i o n o f t h e r a t e a t which
a c a p i t a l investment reproduces i t s e l f i n t h e form o f gross income.
Labour and Management Residual
T h i s i s an assessment o f what t h e farmer earns as a reward f o r
h i s own l a b o u r and management.
The sum o f 12.0 p e r c e n t i n t e r e s t
( s i m i l a r t o t h e Economic S e r v i c e Survey) i s a p p l i e d t o E q u i t y C a p i t a l
i n a d d i t i o n t o t h e i n t e r e s t a1 ready p a i d on borrowed c a p i t a l
The sum
of 12.0 p e r c e n t of t h e c a l c u l a t e d E q u i t y C a p i t a l i s s u b t r a c t e d from
t h e sum o f Net Farm Income and Managerial S a l a r i e s paid.
.
RELIABILITY OF SURVEY ESTIMATES
Estimates o f farm c h a r a c t e r i s t i c s based on a sample o f farms
a r e l i k e l y t o d i f f e r from t h e f i g u r e s which would have been o b t a i n e d
had i n f o r m a t i o n been c o l l e c t e d from a l l farms i n t h e p o p u l a t i o n .
The
magnitudes o f these d i f f e r e n c e s o r sampling e r r o r s o f survey e s t i m a t e s
i n t h i s r e p o r t a r e presented i n t h i s Appendix i n t h e form o f r e l a t i v e
The
standard e r r o r s (RSE) o f t h e e s t i m a t e s i n percentage terms.
r e l a t i v e standard e r r o r i s d e f i n e d as t h e standard e r r o r d i v i d e d by t h e
mean. The s m a l l e r t h e r e l a t i v e standard e r r o r , t h e more r e 1 i a b l e t h e
estimate.
Table 28 s e t s o u t t h e mean and r e l a t i v e standard e r r o r f o r key
survey v a r i a b l e s . For example, Tab1 e 28 shows t h a t f o r New Zealand t h e
survey e s t i m a t e o f average n e t farm income was $33,403 w i t h a r e l a t i v e
standard e r r o r (RSE) o f 6.19 p e r cent. I n o t h e r words, i t i s 95 p e r
c e n t c o n f i d e n t t h a t t h e t r u e v a l u e o f average n e t farm income l i e s
w i t h i n t h e range o f 1.96 x 6.19 p e r c e n t x $33,403 e i t h e r s i d e o f t h e
R e l a t i v e standard
e s t i m a t e d value. That i s w i t h i n $33,403 2 $4,053.
e r r o r s o f e s t i m a t e s o f t h e means f o r t h e v a r i o u s s t r a t a t e n d t o be
l a r g e r t h a n f o r t h e New Zealand e s t i m a t e s because t h e sample s i z e i s
smaller.
Hence, more c a u t i o n should be e x e r c i s e d i n making i n f e r e n c e s
from t h e i n d i v i d u a l s t r a t a .
TABLE 28
Re1 iabi 1 i ty of Survey Estimates
North Island
Quota Size ( l i t r e s )
201-600
601-1000
South Island
Quota Size (1 it r e s )
lO0lt
A1 1
201-600
601-1000
1001t
A1 1
New Zealand
C
Number of Farms
December Cows Milked
- mean (Cows)
-
RSE ( % )
Dairy Productive Hectares
mean (hectares)
- RSE ( % )
-
Gross Revenue
mean ( $ )
-
-
RSE ( % )
Total Expenditure
- mean ( $ 1
- RSE ( % )
Net Farm Income
- mean ( $ )
-
RSE ( % )
81.4
6.44
113.7
6.99
154.4
11.92
115.60
5.52
79.9
6.90
104.8
5.62
155.2
6.28
101.72
3.75
110.10
3.76
51.17
5.78
73.97
5.19
107.42
9.59
76.61
4.52
69.27
9.25
84.29
7.07
144.44
9.14
87.75
5.06
81.02
3.37
86,712
5.23
147,716
2.85
230,539
8.12
152,947
3.82
98,286
'4.96
145,509
4.77
244,264
6.11
140,244
3.18
71,264
10.04
110,169
2.3$
175,556
8.64
116,971
4.21
78,059
7.33
120,201
4.72
181 ,800
7.62
110,764
3.88
'
147,913
2.67
114,510
2.99
Estimation Mattiematics a
In addition to forming the usual estimates i t was necessary to
define the population of fanns e l i g i b l e f o r the survey since ( a s noted
in Chapter 2 ) not a l l i n e l i g i b l e farms could be eliminated fror" the
total population prior to selecting the sample.
Definitions
-
Nh
N;
"h
m
h
Ch
the apparent stratum size (known).
.
the number of farms in stratum h which s a t i s f y the
el igibil ity c r i t e r i a (unknown) .
-
the number o f e l i g i b l e farms (farmers) which provided data
in stratum h ( known).
-
the number o f inel igible farms drawn in the course of
obtaining n ( known) .
-
the number of e l i g i b l e farms (farmers) who declined to
provide data (known).
- ih*/i*,
the fraction
h
of e l i g i b l e fdr~nsin the total
population caning from stratum h .
n;
6h,ohZ
- the urlknown mean and variance of the el i g i b l e farms i n
X- h ;Sh
-
1-1
-
- lfihih, the
-x
- ~ f i , the
stratum h .
the mean a n d variance of the sampled el igibl e units i n
stratum h .
unknown mean of the c h a r a c t e r i s t i c under study
over a l l el igible units.
-
sample estimate of
u
a The AEKU acknowledges the useful discussions held w i t h Mr J Jowett
of the MAF in formulating the s t a t i s t i c a l procedures used i n t h i s
survey.
Sampling P r o p e r t i e s of Estimated Stratum Sizes:
2
Wh
e s t . var.
=
^wh
n
h
+
h
ch t m h
-
n +
Ah
A
W h (l-Li )
-
=
- 1
c
"
+ c,
1
.
unbiased e s t i m a t o r o f Wh.
( n
; (1- h
(
+ rnh -2
+
ch+mh
Nh
A
unbiased e s t i m a t o r o f t h e v a r i a n c e o f Wh
.
The e s t i m a t e d s t r a t u m s i z e i s :
A
= NhWh w i t h e s t i m a t e d v a r i a n c e equal t o ~ ~ 2
mu1 t i p 1 i e d by e s t . var. Wh.
A
Ni;=
e s t . var.
A
W
h
2
N h e s t . var.
o f the Survey Estimates:
Mean and Standard E r r o r ( s .e.)
=
En"* x where
h h
Nt
A
I?;
=
4*
( e s t . var. Nh)
J
"*
.
/ I N h
(X,
-
X)
-l
1
1
1
The f i r s t term in the equation for estimating the standard
error (s.e.) of the survey mean i s the normal estimate from a
stratified sample. The other two terms relate t o the uncertainty in
relative stratum sizes.
The recorded s t a t i s t i c s re1 ating t o the
estimated stratum sizes are presented in Table 29.
TABLE 29
Estimation of Stratum Sizes
Stratum
North Is1 and
201-600 1 itres
601-1000 1 i t r e s
1001+ l i t r e s
124
185
115
21
38
17
3
3
2
2
3
1
114
172
109
0.1744
0.2630
0.1665
201-600 1i t r e s
601-1000 1i t r e s
1001+ l i t r e s
135
92
49
26
34
16
2
3
2
2
126
87
46
0.1921
0.1332
0.0708
Total New Zealand
700
152
South Island
2
1
1.0000
APPENDIX D
SURVEY RESULTS BY REGION AND QUOTA
GROUP
Page
Tab1 e
No.
Average Areas o f Town Supply Farms
U t i l i s a t i o n o f Farm Area
I r r i g a t i o n Use
Types o f Labour U n i t s
M i 1 k P r o d u c t i on
Capital Structure
Liabilities
-
Value o f a l l Assets and
Gross Revenue Components
Types o f M i l k Payments Received
Farm Expenditure Components
D e p r e c i a t i o n o f Farm Assets
Net Farm Income Components
Cash Surplus From Farming
Net Farm Income Less Imputed I n t e r e s t on E q u i t y
and T o t a l Assets
Measures o f Economic P r o f i t a b i 1 ity
Supplementary Feed Use
Run-Off Area
Non-Fami l y A d u l t Workers ' Annual Mage Pai d
TABLE 30
Average Areas o f Town Supply Farms
by Region and Quota Group
Quota L i t r e s
North I s l a n d
201-600 601-1001 1001+
Number o f Farms
Surveyed
21
38
17
(ha)
(ha)
(ha)
Freehol d Area
Crown i Maori Lease
Rented Area
54.48
0.18
7.75
69.18
1.87
7.53
84.10
3.70
29.31
T o t a l Farm Area
Less Unproductive
Area
62.41
78.58
117.11
4.94
4.18
4.35
P r o d u c t i v e Area
Less Estimated
Sheep, Beef and
Cash Crop Area
P l u s Estimated
' G r a z i n g ' Out Area
57.47
74.40
112.76
8.19
4.91
16.40
1.89
4.48
11.06
Dai r y P r o d u c t i v e Area
Utilised f o r Milk
51.17
Production
73.97
107.42
South I s l a n d
201-600 601-1000
/
I
1001+
26
34
16
(ha)
(ha)
(ha)
U t i l is a t i o n of Farm Area
By Region and quota Group
Quota Litres
Number Surveyed
Proportion o f .
Farm Area under:
- Dairy P a s t u r e
- Forage Crops
- Sheep & Beef
Cattle Pasture 8
Cash Crops
- Unproductive
Land
Total
North I s l a n d
201-600
601-1001
South I s l a n d
1001+
201-600
601-1000
1001+
21
38
17
26
34
16
%
%
%
%
%
%
76.6
2.4
87.1
1.4
81.0
1.3
84.3
1.1
90.2
1.0
83.3
1.3
13.1
6.2
14.0
8.4
4.4
8.3
7.9
5.3
3.7
6.2
4.4
7.1
100.0
100.0
100.0
100.0
100.0
100 .O
TABLE 32
I r r i g a t i o n Use
by Region and Quota Group a
North I s l a n d
Quota Li tres
Number Surveyed
Number of Farms
Using I r r i g a t i o n
201-600
South I s l a n d
601-1001
1001+
201-600
601-1000
1001+
21
38
17
26
34
16
2
5
2
11
16
10
77%
55%
- Percentage of
Dai ry Productive
Area I r r i g a t e d
- Estimated Total
Hours I r r i g a t i n g
17%
37%
58%
71%
450
400
972
879
1,689
a These r e s u l t s do not i n c l u d e weighted means. T h e average i s
c a l c u l a t e d according t o t h e number of p r a c t i s i n g farmers.
1,418
TABLE 33
Types o f Labour U n i t s
By Region and Quota Groups
Quota L i t r e s
Number Surveyed
North I s l a n d
South I s l a n d
201-600 601-1001 1001+ 201-600 601-1000
21
1001+
38
17
26
34
16
Farmer
Permanent Family
Casual Family
0.97
0.60
0.00
0.91
0.31
0.03
0.90
0.45
0.04
1.OO
0.36
0.09
0.95
0.65
0.10
0.95
0.83
0.03
Total Family Labour
Units
1.57
1.25
1.39
1.45
1.70
1.81
Permanent Non-Family
Casual Non-Fami l y
0.10
U.13
0.60
0.07
1.15
0.05
0.08
0.06
0.39
0.12
1.41
0.06
T o t a l Labour U n i t s
1.80
1.92
2.59
1.59
2.21
3.28
P r o p o r t i o n of
Permanent Labour
Proportion o f
Family Labour
93%
95%
97%
91%
90%
97%
87%
6 5%
54%
91%
77%
55%
TABLE 34
M i l k P r o d u c t i o n bv Keoion and Ouota G r o u ~
N o r t h I s 1and
Quota L i t r e s
Number Surveyed
D a i l y Quota ( 1 )
Dairy Productive
Hectares ( ha)
M i 1k P r o d u c t i o n
Sold a t Quota
P r i c e s (1)
M i 1k P r o d u c t i o n
Sold a t S u r p l u s
Prices (1)
Total L i t r e s
Produced (1)
201-600
21
429
601-1001
601-1000
1001+
17
1,259
26
486
34
751
16
1,302
1U7.42
69.27
84.29
144.44
176,190
320,643 492.357
198,932
304,749
544,252
i44,933
188,203 263,621
171,204
221,325
293,471
321,123
508,846 755.978
370,136
526,074
837,723
51.17
38
77'1
South I s l a n d
1001+ 201-600
73.97
c
P r o p o r t i on o f T o t a l
Sold a t Quota
Prices (%)
55
Average No. M i 1k i n g
75.7
Cows i n Feb 1985
Apr 1985
67.9
Jun 1985
59.5
Aug 1985
65.2
Oct 1985
77.0
Dec 1985
81.4
Total L i t r e s
Converted t o 4.18%
Milk Fat (kg)
13,423
Kg M i l k F a t I D a i r y
P r o d u c t i v e ha ( k g )
264
Litres/Uecember
M i l k i n g Cows (1)
3,945
L i tres/Dai ry
P r o d u c t i v e ha (1) 6,276
Uecember CowsIDai ry
P r o d u c t i v e ha (No.) 1.59
TABLE 35
C a p i t a l S t r u c t u r e - Val ue o f a1 1 Assets and L i a b i 1 it i e s
by Kegion and Quota Group
North I s l a n d
201-600 601-1001 1001+
Quota L i t r e s
21
Number Surveyed
Total L i t r e s
Produced
Cows i n M i l k i n
December 1985
Uai r y P r o d u c t i v e
Hectares
Freehold Area ( h a )
38
South I s l a n d
201-600 601-1000
17
26
321,123
508,846
755,978
81.4
113.7
154.4
79.9
107.42
88.40
69.27
63.70
51.17
54.48
73.97
69.18
1001t
34
370,136 526,074
104.8
84.29
81.01
16
837,723
155.2
144.44
147.80
Assets
Freehold Land
(valued a t
31.12.1985) a
Farmer's House
(112 Book Value)
Other Farm Houses
Farm Bui 1 d i n g s
P l a n t & Equipment
Farm V e h i c l e s
D a i r y Stock
Other Stock
Company Shares
T o t a l Farm Assets
Cash a t Bank
Sundry Debtors
Other C u r r e n t
Assets
460,905
638,851
848,505 339,035
494,510 825,810
6,991
4,409
7,066
7,685
10,901
12,900
9,473
5,271
4,764
8,213
29,892
16,514
2 ,U36
3,087
4,160
4,250
11,277
4,864
474,341
656,689
-
T o t a l A1 1 Assets
----
876,466 358,029
518,764 877,080
-
a D e t a i l s o f t h e u p d a t i n g o f l a n d values a r e l i s t e d i n Appendix 9.
(Tab1 e 35 c o n t
...)
TABLE 35 ( c o n t ...)
Capital Structure
-
Value o f a1 1 Assets and L i a b i lit i e s
North I s l a n d
Quota L i t r e s
South I s l a n d
201-600
601-1001
1001+
201-600
601-PO00
1001t
$
$
$
$
$
$
C u r r e n t L i a b i 1 iti es
4,688
3,850
9,601
7,181
13,272
14,962
5,261
6,195
9,725
10,640
9,727
16,460
1,698
3,227
3,647
3,629
9,360
3,197
10,236
20,009
31,881
15,085
29,725
29,384
Total Fixed
Liabilities
105,482
157,925
178,612
114,239
140,752 150,834
Total A l l
Liabilities
Equi t y
115,718
358,623
177,934
478.755
210,493
665,973
129,324
228,705
170,477 180,218
348,287 696,862
Total
474,341
656,689
876,466
358,029
518,764 877,080
Bank O v e r d r a f t
Sundry C r e d i t o r s
Other C u r r e n t
Liabilities
Total Current
Liabilities
Fixed L i a b i l i t i e s
Rural Bank
Mortgages
Trading Bank
Mortgages
Building.Society
Mortgages
Insurance Company
Loans
Stock F i r m Loans
Finance Co. Loans
S o l i c i t o r ' s Loans
Family Mortgages
Other L i a b i 1 iti es
TABLE 36
Gross Revenue Components by Region and Quota Group
Quota L i t r e s
Number Surveyed
Total L i t r e s
Produced
Cows i n M i l k i n
December 1985
Uai ry P r o d u c t i v e
Hectares
North lsland
201-600 601-1001
21
321,123
81.4
51.17
38
1001+
17
508,846 755,978
113.7
South I s l a n d
201-600 601-1000
26
370,136
154.4
79.9
107.42
69.27
147,716 230,539
98,286
73.97
34
1001+
16
526,074 837,723
104.8
84.29
155.2
144.44
M i l k Sales
Produce S o l d
Wool 8 Skins S o l d
C o n t r a c t i ny Fees
Rent & Lease Fees
Empl oyee ' s House
L i vestock P r o f i t
- Dairy
- Other Stock
Other Revenue
Gross Revenue
86,712
145,509 244,264
TABLE 37
Types o f M i l k Payments Received by Region and Quota Group
Quota L i t r e s
Number Surveyed
Total L i t r e s
Produced
Cows i n M i l k i n
Uecernber 1985
Oai ry P r o d u c t i v e
Hectares
North Island
201-600 601-1001 1001+
21
321,123
81.4
51.17
Payment Received f o r
M i 1 k P a i d a t Quota
46,916
Prices
Payment Received f o r
Milk Paid a t
Surpl us P r i c e s
18,558
Speci a1 P r o d u c t i o n
A1 1owances
261
Premiums Received o r
-356
Penal t i e s Pai d
Farm Chi 11ing
A1 1owances
62
End o f Season,
R e t r o s p e c t i v e and
10,204
Other Payments
T o t a l M i l k Payments
Recei ved (Mi 1k
Sal es)
75,645
38
South I s l a n d
201-600 601-1000
17
26
508,846 755,978
370,136
113.7
34
1001+
16
526,074 837,723
154.4
79.9
107.42
69.27
84.29
144.44
85,666 134,440
53,425
82,677
147,378
25,689
42,535
22,U66
29,150
36,591
1,410
3,638
1,245
2,509
3,868
392
269
-74
234
1,521
94
227
105
135
597
12,251
17,971
7,019
10,801
16,178
125,502 199,080
83,786
73.97
104.8
155.2
125,506 206,133
TABLE: 38
Farm Expenditure Components by Region and Quota Group
Quota L i t r e s
Number Surveyed
Total L i t r e s
Produced
Cows i n M i l k i n
December 1985
Oai ry P r o d u c t i v e
Hectares
North I s l a n d
201-600 601-1001 1001+
21
321,123
Labour
Fami l y Labour
Family Casual
Labour
Non-Family Permanent
& Casual Labour
Unpaid Fami l y
Labour
Labour Accommodation
Sub-Total Labour
81.4
38
17
508,846 755,978
113.7
South I s l a n d
201-600 601-1000
26
370,136
1001+
34
16
526,074 837,723
154.4
79.9
104.8
107.42
69.27
84.29
155.2
51.17
73.97
$
$
$
$
$
$
1,893
2,204
2,582
2,355
4,736
5,618
443
717
562
418
18,854
3,051
7,383
20,972
2,582
279
5,524
309
7,476
1,641
8,984
18,514
36,125
64
751
2,829
9,676
5,232
83
2,5U4
395
10,101
15,530
3,U47
882.
25,808
144.44
Animal Heal t h
Breeding & Herd
Testing
Contractors
U a i r y Shed Expenses
Electricity
F e r t i l is e r & Seed
Feed
Grazing Expenses
Freight
Weed & P e s t Expenses
Vehi c l e Expenses
Repairs and
Maintenance
I r r i g a t i o n Expenses
(Table 38 c o n t
...)
77
TABLE 38 ( c o n t
...)
Farm E x p e n d i t u r e Components by Region and Quota Group
Quota L i t r e s
North Island
201-600 601-1001 1001+
$
$
$
South I s l a n d
201-600 601-1000
$
1001+
$
$
Adrni n i s t r a t i on
Accountancy
Telephone
General
Admi n i s t r a t i o n
957
439
1,238
654
1,675
1,036
864
516
1,170
651
1,611
793
1,319
1,659
2,027
842
1,729
2,735
Sub-Total
Adrni n i s t r a t i on
2,715
3,551
4,738
2,222
3,550
5,139
Insurance
Interest
Rates
Rent
1,165
12,962
1,909
2,179
1,951
21,695
3,084
3,119
2,539
29,935
4,463
13,684
1,498
13,320
2,117
1,581
2,178
16,924
2,787
2,828
4,952
23,711
3,816
4,690
Sub-Total
Overheads
18,215
29,849
50,621
18,516
24,717
37,169
T o t a l Cash
Expenses
Net D e p r e c i a t i o n
65,119
6,145
101,625 163,036
8,544 12,520
70,565
7,494
110,606 166,361
9,595 15,439
Total Expenditure
71,264
110,169 175,556
78,059
120,201 181,800
Overheads
TABLE 39
D e p r e c i a t i o n of Farm Assets by Region and Quota Group
Quota L i t r e s
Number Surveyed
Total L it r e s
Produced
Cows i n M i l k i n
December 1985
Dai ry P r o d u c t i v e
Hectares
North I s l a n d
201-600
601-1001
21
26
34
1001+
16
508,846
755,978
370,136
526,074
837,723
81.4
113.7
154.4
79.9
104.8
155.2
107.42
69.27
Gross
Uepreci a t i o n
Less Personal Car
Depreciation
Less Depreci a t i on
Recovered by Sales
Cost o f New Assets
17
South I s 1and
201-600
601-1001
321,123
Farm Bui 1d i ngs
Uepreci a t i on
P l a n t & Equipment
Depreciation
Farm V e h i c l e
Uepreci a t i on
Net D e p r e c i a t i o n
38
1001+
51.17
73.97
84.29
144.44
1,517
2,491
3,138
1,707
1,993
4,023
1,140
1,763
3,857
1,912
3,368
4,128
3,584
5,370
6,232
4,197
4,864
9,683
6,241
9,624
13,227
7,816
10,225
17,834
326
517
295
-
113
2,100
-
290
334
194
746
719
-
12
4
6,145
8,544
12,520
7,494
9,595
15,439
13,209
13,408
29,703
22,800
16,510
18,386
TABLE 40
N e t Farm Iricorne Cumponetits by Region and Quota Group
Quota L i t r e s
Nurnber Surveyed
Total L i t r e s
Produced
Cows i n M i l k i n
December 1985
Dai r y Produc ti ve
Hectares
North Island
201-600
601-1U01
21
38
1001+
17
South I s l a n d
201-600
601-1000
26
508,846
755,978
81.4
113.7
154.4
79.9
107.42
69.27
84.29
144.44
145,509
120,201
244,264
181,800
73.97
Gross Revenue
Total Expenditure
86,712
71,264
147,716
110,169
230,539
175,556
98,286
78,059
Net Farm Incon~e
15,448
37,547
54,983
20,227
Net Farm Income Per
Dai r y P r o d u c t i v e
Hectare
blet Farm Income Per
December M i 1 k i ng
Cow
16
321,123
51.17
370,136
34
1001+
526,074
837,723
104.8
155.2
25,308
62,464
302
508
512
292
300
432
190
330
356
253
241
402
TABLE 41
Cash S u r p l u s from Farming
by Region and Quota Group
quota L i t r e s
Number Surveyed
Total L i t r e s
Produced
Cows i n M i l k i n
December 1985
Oai r y P r o d u c t i v e
Hectares
1.
North I s l a n d
201-600 601-1001 1001+
21
321,123
81.4
51.17
38
17
508,846 755,978
113.7
South I s l a n d
201-600 601-1000
26
370,136
154.4
79.9
107.42
69.27
125,502 199,080
83,786
73.97
34
16
526,074 837,723
104.8
155.2
84.29
144.44
Cash Received:
M i l k Sales
Uai ry C a t t l e
Sales
Sheep and Beef
Sales
Bobby C a l f
Sales
Other Farm
Income
75,645
8,102
10,974
18,528
7,466
242
53
279
1,008
125,506 206,133
14,064
T o t a l Received
24,017
85 1
318
1,956
3,700
4,995
2,325
3,367
4,301
2,793
6,341
7,759
6,441
5,398
12,017
- - -
2.
1001t
- - -- - -
-- - - --
-
88,738
146,570 230,641
101,026
149,186 246,786
38,874
65,326 103,748
46,966
76,506 114,936
20,930
2,063
33,400
2,735
20,738
3,439
28,267
4,414
Cash Spent:
Labour and
Operating
Overhead and
Adnii n i s t r a t i o n
Dai ry Purchases
Sheep and Beef
C a t t l e Purchases
954
22
55,359
4,715
145
24
170
42,308
7,074
1,893
-
T o t a l Spent
62,821
Cash Surplus from
Farrni ng
25,917
101,483 163,967
45,087
66,674
71,167
29,859
109,357 166,211
39,829
80,575
TABLE 42
N e t Farm Income Less Imputed I n t e r e s t on E q u i t y and
T o t a l Farm Assets by Region and Quota Group
Quota L i t r e s
Number Surveyed
Total L i t r e s
Produced
Cows i n M i l k i n
December 1985
Dai ry P r o d u c t i v e
Hectares
Equity
Net Farm Income
A.
North Island
201-600 601-1001
21
38
1001+
South I s l a n d
201-600 601-1000
17
26
321,123
508,846
755,978
370,136
81.4
113.7
154.4
79.9
69.27
51.17
73.97
107.42
358,623
15,448
478,755
37,547
665,973
54,983
228,705
20,227
16
526,074 837,723
104.8
84.29
155.2
144.44
348,287 696,862
25,308 62,464
Net Farm Income
Less lmputed
I n t e r e s t on E q u i t y
a t Kate o f : 3.5%
5.0%
7.0%
-
2,896
2,483
9,656
20,791
13,609
4,034
31,674
21,684
8,365
12,222
8,792
4,218
T o t a l Farm Assets
Net Farm Income
I n t e r e s t Paid
460,905
15,448
12,962
638,851
37,547
21,695
844,505
54,983
29,935
339,035
20,227
13,320
12,278
5,365
- 3,853
36,882
27,299
14,522
55,220
42,493
25,523
21.681
16,595
9,815
B.
34
1001+
13,118
7,894
928
38,074
27,621
13,684
494,510 825,810
25,308 62,464
16,924 23,711
Net Farm Income
Plus I n t e r e s t Paid
Less Imputed
I n t e r e s t on T o t a l
Farm Assets a t
r a t e o f 3.5%
5.0%
7.0%
24,924
17,507
7,616
57,272
44,885
28,368
TABLE 43
Measures of Economic P r o f i t a b i l i t y by Region and Quota Group
North I s l a n d
Quota L i t r e s
South I s l a n d
201-600
601-1001
1001+
21
38
17
201-600
601-1000
1001+
26
34
16
Number Surveyed
Freehold Land
Area ( ha)
Rented and GrazingOut Area ( h a )
54.48
69.18
84.10
63.70
8 1. O 1
147.80
9.82
13.88
33 .O1
17.09
11.07
19 .OO
A. Return on Capital
1. uorki ng txpenses
( l e s s imputed c o s t s )
2. Plus a s s e s s e d
Manageri a1 Reward
41,589
68,877
108,486
49,188
80,056
120,075
16,954
21,803
29,039
17,375
21,198
23,864
58,543
90,680
137,525
66,563
101,254
143,939
4,877
7,554
11,456
5,545
8,434
11,990
623,341
961,926
300,994
423,809
712,703
31,579
36,453
24,467
29,710
45,349
11,368
15,194
17,848
24,481
16,501
10,970
18,524
14,534
31,921
36,822
98,100
128,000
60,800
84,800
138,700
3. Total Adjusted
Working Expenses
( 1 + 2)
4. Working C a p i t a l
(8.33% of 3)
Freehol d , Rented and
Grazi ng-Out Land
431,097
Bui 1d i n g s (1e s s
Farmer's house)
26,704
P l a n t & Equipment
Farm Vehicles
7,317
( l e s s c a r a t $10,548
7,010
Livestock a t Market
66,500
Value
5. Farm C a p i t a l
538,628
779,582
1,168,708
413.732
571,377
965,495
6. Total Farm Capital
( 4 + 5)
7. Net Farm Income
8. P l u s I n t e r e s t Paid
9. Plus Rent Paid
543,505
15,448
12,962
2,179
787,136
37,547
21,695
3,119
1,180,164
54,983
29,935
13,684
419,277
20,227
13,320
1,581
579,811
25,308
16,924
2,828
977,485
62,464
23,711
4,690
30,589
62,361
98,602
35,128
45,060
90,865
16,954
21,803
29,039
17,375
21,198
23,864
13,635
40,558
69,563
17,753
23,862
67,001
2.51%
5.15%
10. Sub-total (7+8+9)
11. Less Managerial
Reward ( 2 )
12. Economic Farm
Surpl us ( 10-11 )
13. Rate of Return
Percentage (1216)
5.89%
4.23%
4.12%
6.85%-
TABLE 43 ( c o n t
... )
Measures of Economic P r o f i t a b i l i t y by Region and Quota Group a
Quota L i t r e s
North Island
201-600
601-1001
lOOl+
South Island
201-600
601-1000
1001+
B. Capi t a l Turnover Percent
14. Gross Revenue
( 1e s s worker's
house
15. Total Farm Capital
(6)
16. Capital Turnover
Percentage ( 14/15)
C.
86,629
147,348
229,715
98,007
145,191
242,623
543,505
787,136
1,180,164
419,277
579,811
977,485
19.5%
23.4%
25 .O%
24.8%
15.9%
18.7%
Labour & Management Residual
Total Farm Capital
(6)
Plus Cash a t Bank,
Sundry Debtors &
Other Current
Assets
19. Sub-total (17+18)
20. Less Fixed
Liabilities
21. Less Current
Liabilities
543,505
787,136
1,180,164
419,277
579,811
977,485
13,436
17,838
27,961
18,994
24,254
51,270
556,941
804,974
1,208,125
438,271
604,065
1,028,755
105,482
157,925
178,612
114,239
140,752
150,834
10,236
20,009
31,881
15,085
29,725
29,384
627,040
37,547
997,632
54,983
308,947
20,227
433,588
25,308
848,537
62,464
75,245
119,716
37,074
52,031
101,824
-37,698
-64,733
-16,847
-26,723
-39,360
22. Total Equity
Capital (19-2U-21) 441,223
23. Net Farm Income ( 7 ) 15,448
24. Less 12.0% of
Equity Capital ( 2 2 ) 52,947
25. Labour & Management Residual
(23-24)
-37,499
a Most of the terms used i n t h i s t a b l e a r e p a r t i c u l a r t o t h i s t a b l e alone; they a r e
defined i n Appendix B.
TABLE 44
S u p ~ l e ~ n e n t a rFeed
y
Use by Reaion and Ouota G r o u ~
Worth I s l a n d
Quota L i t r e s
201-690
South I s l a n d
601-1001
1001+
601-1000
1001+
21
38
17
26
34
16
20
34
15
2,825
2,438
3,288
11
14
7
16
23
8
1,516
1,504
3,050
1,974
2,449
3,168
13
34
16
216
373
534
0
0
0
0
0
0
1
3
1
25 .O
16.3
60.0
-
Number Surveyed
Number o f Farms w i t h
Home Grown Hay
- Average No. o f
Home Grown B a l e s
p e r Farni
Number o f Farms w i t h
Purchased Hay
- Average No. o f
Purchased Ual es
Number o f Farms
Claki n y S i 1 age
- Average No. o f
tonnes o f S i 1age
made
Number o f Farms w i t h
klonie Grown G r a i n
- Average No. o f
tonnes o f Home
Grown G r a i n
Number o f Farms w i t h
Purchased G r a i n
- Average tonnes o f
Purchased G r a i n
Number o f Farms w i t h
Purchased Uai ry
Meal o r Bran
- Average tonnes o f
D a i r y Meal.
Purchased
6
8
3
12.4
11.5
8.7
Nuniber o f Farrns
Growing a Forage
Crop
- Hectares Grown
9
3.47
2.93
14
8
4.11
201-600
1
8
2.82
12
2.62
5
5.81
TABLE 45
Run-Off Area by Region and Quota Group
North I s l a n d
201-600
Quota L i t r e s
South I s l a n d
601-PO01
1001+
201-600
601-1000
1001+
Number Surveyed
21
38
17
26
34
16
Number o f Farms
w i t h a Run-Off
10
22
11
10
21
13
21.98
21.42
44.26
23.37
22.12
38.50
5.63
7.03
5.49
4.76
5.57
12.73
-
-
Run-Off Area
(ha)
Distance from
Home Farm t o
Run-Of f ( km)
TABLE 46
Non-Fami l y Adul t Worker's Annual Wage Paid and
Years o t t x ~ e r l e n c ebv Realon and Ouota G r o u ~
North Island
Quota L i t r e s
Number Surveyed
Non-Fami l y Adul t
Workers :
- Nurnber o f Farms
w i t h a worker f o r
a f u l l year
- Annual Average
Wage Paid ( $ 1
- Previous Years o f
Oai ry Experience
201-600
South I s l a n d
601-1001
1001+
201-600
601-1000
1001+
21
38
17
26
34
16
4
13
12
3
10
14
11,568
14,007
17,352
13,238
15,484
14,209
4.0
5.6
6.9
6 .O
6.4
6 -6
APPENDIX E
SURVEY RESULTS OF PREVIOUS YEARS
TABLE 47
Comparisons w i t h Survey R e s u l t s o f P r e v i o u s Years
NZ S u p p l i e r s (No.)
Survey Sample (No. )
(a)
1,309
152
1,278
152
1,247
152
1,214
152
86.55
786
87.93
772
83.59
763
84.75
795
81.02
7 74
101
108
498,797 473,153
108
474,217
112
531,539
110
516,188
Physical Characteristics
UairyProductiveArea(ha)
D a i l y Quota ( 1 )
Herd S i z e (No. M i l k i n g i n
Dec )
Milk Production ( l l f a r m )
L i t r e s p e r D a i r y Product i v e hectare ( l l h a )
L i t r e s p e r December
M i l k i n g Cow ( l / c o w )
.
(b)
1,377
152
F i narlcial Characteri s t i c s
T o t a l Farm Assets ( $ / f a r m )
T o t a l Farm Assets p e r
D a i r y Prod. ha ( $ / h a )
Gross Revenue ( $ I f arm)
Total Expenditure ($/farm)
E x p e n d i t u r e p e r December
M i 1 k i ng Cow ($/cow)
Net Farm Income ($/farm)
Net Farm Income ( c / l )
Net Farm Income p e r
D a i r y Prod. ha ( $ / h a )
5,763
5,381
5,673
6,272
6,373
4,945
4,380
4,390
4,742
4,693
RESEARCH REPORT
159. The Economics of lrrigation Development of the Amuri
Plains Irrigation Scheme, Glen Greer, 1984.
160. An Economic Survey of New Zealand Wheatgrowers:
Enterprise Analysis, Survey No. 8, 1983-84, R.D. Lough,
P.J. McCartin, 1984.
A Financialand Economic Survey of South Auckland Town
Milk Producers and Factory Supply Dairy Farmers, 198384, R.G. Moffitt, 1985.
Optimal Pricing and Promotion for Agricultural Marketing
Agencies, S.K. Martin, L. Young, A.C. Zwart, 1986.
161. An Economic Survey of New Zealand Wheatgrowers:
Financial Analysis, 1982-83, R.D. Lough, P.J. McCartin,
1984.
A Contractual Framework for Evaluating Agricultural and
Horticultural Marketing Channels, S.K. Martin, A.C. Zwart,
1986.
162.
An Integrated Framework for Analysing Agricultural
Marketing Issues, S.K. Martin, A.N. Rae, A.C. Zwart, 1986.
Farmland Pricing in an Inflationary Economy with
Implications for Public Policy, K.L. Leathers, J.D. Gough,
1984.
163. An Analysis of Production, Consumption and Borrowing
Behaviour in the North Island Hill Country Pastoral Sector,
A.C. Beck, J.B. Dent, 1984.
164.
New Zealand's Inshore Fishery: a Perspective on the
Current Debate, R.A. Sandrey, D.K. O'Donnell, 1985.
165. Land Policy and Land Settlement in New Zealand, J.R.
Fairweather, 1985.
166.
Farm Enlargement in New Zealand, J.R. Fairweather, 1985
168.
Market Prospects for Maize, S.A. Hughes, R.L. Sheppard,
1985.
169.
Factor Cost Analysis of a New Zealand Meat Processing
Company, M.D. Clemes, L.D. Woods. 1985.
170. An Economic Survey of New Zealand Wheatgrowers:
Enterprise Analysis, Survey No. 9, 1984-85, R.D. Lough,
P.J. McCartin, 1985.
171. An Economic Survey of New Zealand Wheatgrowers:
Financial Analysis, 1983-84, R.D. Lough, P.J. McCartin,
1985.
Labour Mobility Between New Zealand and Australia, R.L.
St Hill, 1986.
Survey of New Zealand Farmer Intentions and Opinions,
November 1985-January 1986, J.G. Pryde, P.J. McCartin,
1986.
A Financialand Economic Survey of South Auckland Town
Milk Producers and Factory Supply Dairy Farmers, 198485, R.G. Moffitt, 1986.
An Economic Survey of New Zealand Town Milk
Producers, 1984-85, R.G. Moffitt, 1986.
An Economic Survey of NZ Wheatgrowers: Financial
Analysis, 1984-85; R.D. Lough, P.J. McCartin, 1986
The Effect on Horticulture of Dust and Ash: Proposed
Waikato Coal-Fired Power Station, P.R. McCrea, October
1986
A Study of the Determinants of Fattening and Grazing
Farm Land Prices in New Zealand, 1962 to 1983. P.G.
Seed, R.A. Sandrey, B.D. Ward., December 1986
Farmers' Responses to Economic Restructuring in
Hurunui and Clutha Counties: Preliminary Analysis of
Survey Data. J.R. Fairweather, July 1987.
172.
Biological Control of Gorse: an ex-ante evaluation, R.A:
Sandrey, 1985.
173.
The Competitive Position of New Zealand Fresh Fruit
Exports, M.T. Laing, S.A. Hughes, R.L. Sheppard, 1985.
174.
Marketing Structures for the Horticultural industry, N.L
Taylor, R.G. Lattimore, 1985.
Economic Adjustment in New Zealand: A Developed
Country Case Study of Policies and Problems, R.G.
Lattimore, July 1987.
175. An Economic Survey of New Zealand Town Milk
Producers, 1983-84, R.G. Moffitt, 1985.
An Economic Survey of New Zealand Town Milk
Producers 1985-86, R.G. Moffitt, November 1987.
Survey of NZ Farmer Intentions and Opinions, OctoberDecember 1986. J.G. Pryde, P.J. McCartin, July 1987.
DISCUSSION PAPERS
Supply Response Parameters in New Zealand Agriculture
- a Literature Search, M. Wood-Belton, R.G.J. Lattimore,
1985.
Papers Presented at the Tenth Annual Conference of the
New Zealand Branch, Australian Agricultural Economics
Society, 1985.
Farmlands Grain (N.Z.) Society Ltd - A Marketing Audit
1980-84, R.G. Lattimore. 1986. (not available)
Proceedings of the New Zealand Rural Economy and
Society Study Group Seminar, J.R. Fairweather (ed.),
October 1986
An Examination of Alternative Marketing Structures - a
literature search, D.E. Fowler, R.L. Sheppard, S.A. Hughes,
1985.
Papers presented at the Eleventh Annual Conference of
the New Zealand Branch of the Australian Agricultural
Economics Society, Blenheim. Volume 1 and 2. December
1986
Farm Structure Change in New Zealand and Implications
for Policy, J.R. Fairweather, 1986.
Gorse and Goats: Considerations for Biological Control
of Gorse. R.A. Sandrey, January 1987.
Accounting Developments and Implications for Farm
Business, R.H. Juchau, 1986.
Red Deer: The Economic Valuation. R.A. Sandrey, January
1987.
Maori Fishing Rights in New Zealand: an Economic
Perspective, R.A. Sandrey, 1986.
Rural New Zealand; what next? Ralph Lattimore and Tim
Wallace (eds.), July 1987.
Government's Role in Adverse Events Assistance, T.E.
Dickinson, R.A. Sandrey, 1986.
Dairying in Japan and the Benefits of Adopting New
Zealand Pasture Grazing Techniques. R.G. Moffitt, April
1987.
The Treatment of Taxation in Capital InvestmentAppraisal,
N.T. Williams, 1986.
Selling New Zealand Products in Japan. R.G. Moffitt, July
1987.
Additional copies of Research Reports, apart from complimentary copies, are available at $20.00 each.
Discussion Papers are usually $15.00 but copies of Conference Proceedings (which are usually published
as Disc~~ssion
Papers) are $20.00. Discussion Paper No. 106 is $20.00 per volume and Discussion Paper
No. 109 is $29.70.