Farm Running Cost Calculator

New Zealand dairy farm operating costs can be broken down into several key categories. Feed and grazing typically account for 25 to 35% of total farm working expenses (FWE), reflecting the cost of supplementary feed, grazing-off, and silage. Labour (including owner-operator labour value) accounts for 15 to 20%. Repairs and maintenance on plant, buildings, and infrastructure represent 8 to 12%. Fertiliser makes up 10 to 15% depending on the programme. Interest and rent are significant additional costs, typically 15 to 25% of total costs. Overall, total farm working expenses for NZ dairy farms typically range from $5.20 to $6.50 per kg of milksolids (MS), with significant variation by region, farm system, and season. DairyNZ publishes annual benchmarks through its Economic Survey. Source: DairyNZ Economic Survey (dairynz.co.nz).

Total operating costs on New Zealand sheep and beef farms vary considerably by farm class, region, and intensity of management. As a general guide, total costs (excluding owner draw and interest) typically range from $380 to $600 per hectare for sheep and beef properties. Labour and management costs are the single largest variable, particularly on properties that employ staff. Fertiliser, animal health, and vehicle and plant costs are other significant expense lines. Interest costs and depreciation are additional to operating costs and can add $50 to $150 per hectare for owner-operators with debt. Beef + Lamb New Zealand conducts an annual Farm Survey that provides regional cost benchmarks broken down by farm class (hard hill country, easy hill country, finishing). These benchmarks help farmers compare their cost structure to peer properties. Source: Beef + Lamb New Zealand Farm Survey (beeflambnz.com).

Farm working expenditure (FWE) is the total of all cash operating costs on a dairy farm, excluding interest, rent, lease payments, and depreciation. FWE is the primary benchmark used in New Zealand dairy farming to assess farm efficiency and compare farms across the industry. It is expressed as a cost per kilogram of milksolids (kg MS) produced, allowing farms of different sizes to be compared on a like-for-like basis. DairyNZ sets a target of below $5.50 per kg MS as a guide for an average well-managed NZ dairy farm, though this varies with farm system and region. A farm with FWE above industry average needs to identify where costs are higher than peers and whether those extra costs are generating proportionate income. FWE analysis is a routine part of any farm finance review with a bank or farm consultant. Source: DairyNZ Economic Survey (dairynz.co.nz).

New Zealand farmers can benchmark their costs against industry averages through two main surveys. For dairy farms, DairyNZ conducts an annual Economic Survey covering farm working expenses, income, and profitability broken down by farm system (1 to 5) and region. For sheep and beef farms, Beef + Lamb New Zealand publishes an annual Farm Survey with cost and income data by farm class and region. To use these benchmarks effectively, compare your costs in the same categories (e.g., feed, labour, fertiliser) and the same unit of measure (per kg MS for dairy; per hectare or per SU for sheep and beef). If your costs are higher than average, investigate which specific categories are above the benchmark. Your bank, farm consultant, or rural accountant can assist with a formal benchmarking exercise. Participating in discussion groups with other farmers also helps identify cost-reduction opportunities. Source: DairyNZ (dairynz.co.nz); Beef + Lamb New Zealand (beeflambnz.com).