Investor Presentaiton
28
The dairy industry in Tasmania
Table 14: Farm conversion assumptions
Cows milked
Farm area
Number
700
Replacements off-farm
1 000
Total farm area
ha
330
475
Total effective area
ha
297
428
Irrigation area (50 per cent)
ha
149
214
Milk production
Per cow
kgMS
375
375
Total
kgMS
262 500
375 000
Pasture consumed'
Irrigated area
tDM/ha
12.0
12.0
Dryland area
tDM/ha
6.0
6.0
Average
tDM/ha
9.0
9.0
t/cow
0.7
0.7
Grain fed per cow
Labour required
Total units
FTE
6.4
Cows
per labour unit
Cows/FTE
110
130
Cost per kg milk solids
$/kgMS
$1.25
$1.03
738
7.7
Bare land value
Dryland
$ per ha
$7 000
$7.000
Irrigated²
$ per ha
Capital investment
Land and improvements - initial
$ million
$2.45m
$3.65m
Water purchase
$ million
$1.14m
$1.65m
Irrigation development
$ million
$0.67m
$0.96m
Rotary dairy³
$ million
$1.38m
$1.45m
Other farm improvements*
$ million
$0.78m
$0.98m
Stock
$ million
$1.25m
$1.79m
Plant and machinery
$ million
$0.27m
$0.38m
Working capital
$ million
$0.29m
$0.41m
Total capital
$ million
$8.24m
$11.27m
Per total ha
$ per ha
$24.977
$23 736
Per effective ha
$ per ha
$27 752
$26 373
Per cow
$ per cow
$11 775
$11 275
Per kg milk solids
$ per kgMS
$31.40
$29.67
Milk price
Average for season
$/kgMS
$5.20
$5.20
1. Overall pasture utilisation here is assumed to be slightly less than for a current farm in a more traditional area. Higher figures are achievable.
2. None purchased. Water purchase and irrigation development are assumed to be part of the conversion process.
3. Includes all equipment, milk silo, grain silos and feeding system, power installation, effluent system, and tanker access road.
4. Includes extra house, calf shed, fencing, laneways, water supply, capital fertiliser and pasture renovation.
Source: Macquarie Franklin, April 2017
A guide for investors
29
On a per cow basis, the total capital
investment indicated is similar to that
required to buy an equivalent, currently
operating dairy farm, on a walk-in-walk-
out basis.
For example, the Tasmanian Dairy
Business of the Year results for 2015-16
show an average farm asset of $11 596
per cow over 31 farms. For the top
10 per cent of all farms the figure
is $9 616.
Also, see section on "buying a farm"
with above average farms with total
assets of $12 400 to $13 500 per cow
with all replacements reared
on-farm.
This number will be lower with
replacements agisted off-farm and
more cows milked.
In addition a fully set up new dairy
conversion farm should be 'state of the
art' and therefore perform better than
an average farm, especially from
a labour cost point of view.View entire presentation