2013
FARM SURVEY
INDEX
Introduction
Own Result
Comparative Figures for Each District
Explanation of Key Financial Ratios
used in the Farm Survey
Farm Statistics
The Business of Farming
Tax Facts, Budget Snapshot and ACC
2013
Interpretation of Farm Survey Results
and the Farming Business
69 Tarbert Street
PO Box 267
Alexandra 9340
Tel: 03 440 0100
Fax: 03 448 6329
[email protected]
www.iclca.co.nz
5 June 2013
2013
Introduction
IntroductionTo
ToThe
TheFarm
Farm Survey
Survey
th
This year is our 28
28th
FarmSurvey
Surveyofoffarm
farmincome
incomeand
andexpenditure,
expenditure,calculated
calculatedon
onaastock
stockunit
unitand
andper
per
Farm
hectare
hectare basis.
basis. The
The objective
objective of
of this
this survey
survey isis to
to highlight
highlight the
thefinancial
financialand
andon-farm
on-farmperformance
performancelevels
levels
being achieved by other farmers
farmers within
withinyour
yourfarm
farmclass.
class.
To
To do
do this
this the
the figure
figure used
used for
for comparison
comparison purposes
purposes is the farm
farm surplus per stock unit. This
This isis derived
derived after
after
deducting farm working
stock unit
unit from total
working expenses
expenses per stock
total farm
farm income
income per
perstock
stock unit.
unit. This
Thiseffectively
effectively
means that
that debt
costs, plant
plant replacement,
replacement, tax and drawings
drawings do
do not
not influence
influence the
debt servicing, lease costs,
comparison.
We
We would
would point
pointout
outthat
thatall
allfigures
figuresare
arebased
basedon
ontotal
totalopening
openingstock
stockunits
units(TSU),
(TSU),unless
unless stated
stated otherwise.
otherwise.
For example, wool sales and
and sheep
sheep sales
saleshave
havebeen
beenstated
statedper
peropening
openingsheep
sheepstock
stockunit
unit(SSU),
(SSU),and
andcattle
cattle
sales are calculated on
on aa per
per opening
opening cattle
cattle stock
stock unit
unit (CSU).
(CSU). This
This year’s
year’s survey
survey is
is compiled
compiledon
onaaGST
GST
exclusive basis.
basis.
The return
by valuing
valuing land
land and
and buildings
buildingsat
at$700/opening
$700/opening stock
stockunit.
unit. The return
return on
on assets
assets is calculated by
return on
on
assets
the return
return on total
as ifif aa manager
manager was
was employed.
employed. This is calculated
calculated by
by taking
taking the
the farm
farm
assets isis the
total assets
assets as
surplus, deducting an allowance for wages of
of employing
employing aa manager,
manager, deducting depreciation and dividing
this by the total
total opening
opening value
value of
of land,
land, buildings,
buildings, stock
stock and plant and farm related
related shares.
shares.
We
graphs and
and added
addedaanew
newgraph
graphto
tothe
the farm
farm survey
survey this
this year.
year.
We have
have changed
changed some graphs
We
We have
have included
included aa graph on the
the return
returnon
onassets
assets from
from the
thefarming
farmingoperations
operationsand
andaareturn
returnon
oninvestment
investment
from
from land
land ownership
ownershipand
and this
this isis graphed
graphed for
for the
the last
last 88 years.
years. The
Thecombined
combinedannual
annualreturn
returnisis10%
10% per
per
annum.
annum.
We
We trust
trustthat
thatthis
thisFarm
FarmSurvey
Survey will
willprovide
provideyou
youwith
withaauseful
usefultool
toolininyour
yourendeavours
endeavourstotoachieve
achievemore
more
profitable
profitableresults
resultsfrom
fromyour
yourfarm
farmbusiness.
business.Once
Onceagain,
again,we
wewould
wouldappreciate
appreciateany
anycomments
commentstotoassist
assist us
us
with
providing
more
meaningful
informationininthe
thefuture.
future.
with
providing
more
meaningful
information
Yours
Yours sincerely
sincerely
ICL
Limited
ICL Limited
George Collier
Director
Janette Matheson
Director
Cam Dykes
Director
Simon Wearing
Director
Blair Pedofsky
Director
Otago Flat Otago Flat
Area: (Hectares) Opening Sheep Stock Units (SSU) Opening Cattle Stock Units (CSU) Total Opening Stock Units (TSU) Stocking Rate / Per Hectare Income
Sheep Gross Profit/SSU Wool Sales /SSU Cattle Gross Profit/CSU Deer Gross Profit/DSU Crop/Grazing Profit/CGSU Total Gross Profit 709
3,780
523
4,581
6.5
675
3,191
556
3,955
5.9
517 3,017 292 3,332 6.4 688
2,944
543
3,807
5.5
140.73
29.75
147.77
120.37
145.08
161.56
119.84
26.52
96.76
123.75
139.61
134.07
120.88 17.90 103.34 0.00 145.11 135.56 94.70
17.18
81.52
40.86
107.71
106.32
7.67
5.46
6.29 3.98
169.23
1,099
139.53
820
141.85 908 110.31
607
Farm Expenses
Wages Shearing Costs Contract Work & Plant Hire Weed and Pest Control Fertiliser Seeds Feed, Haymaking & Grazing Animal Health & Breeding Power Freight General Farm Expenses Property R & M Fencing Vehicle and Fuel Insurance ACC Levies Rates Water Rates General Admin & Phone 1.11
9.46
5.94
2.54
11.39
2.30
7.28
5.40
1.55
2.16
1.35
5.79
1.38
8.17
3.00
0.18
1.42
1.50
3.00
2.18
7.93
4.65
1.71
8.76
1.77
6.55
5.26
1.27
2.51
1.57
5.67
3.06
7.80
2.34
0.98
1.84
1.26
3.49
0.76 6.12 5.25 1.24 7.55 1.92 3.86 6.15 1.22 1.51 1.02 2.95 2.10 8.42 1.95 0.93 1.49 1.39 3.53 2.47
6.23
3.63
1.64
6.98
1.96
5.40
4.47
1.22
1.85
0.92
4.04
2.32
7.83
2.07
0.57
1.64
1.25
3.41
Total Farm Working Expenses/SU Total Farm Working Expenses/Ha 73.30
476
69.27
409
58.92 377 58.80
323
Farm Surplus / (Deficit)/SU Farm Surplus / (Deficit)/Hectare 95.93
623
70.25
411
82.94 531 51.51
284
Debt Servicing/SU
Interest Paid Pastoral Lease Costs Lease Costs 10.85
0.00
0.50
15.24
0.08
1.33
13.75 0.00 1.78 15.96
0.08
1.83
Total Debt Servicing 11.32
16.64
15.53 17.87
Surplus after Debt Servicing/SU 84.61
53.61
67.41 33.63
Personal Expenses
Personal Drawings Personal Allowance Life Insurance Taxation Funds Introduced 20.63
2.03
0.79
5.50
(0.88)
18.54
2.10
1.30
6.93
(4.39)
19.70 3.91 1.15 2.83 (3.78) 15.74
2.46
1.36
2.24
(6.73)
Total Personal Expenses 28.06
23.66
23.82 15.08
Total Net Capital Expenditure 26.42
16.18
7.94 9.44
Business Result 30.13
13.78
35.65 9.12
Plus
Sundry Farm Income/ SU Total Gross Income/ SU Total Gross Income/ Hectare FARM SURVEY 2013
2012
2011
Average
Average
Average
Average
Top 20%
Top 20%
Otago Flat Otago Flat
2012
2011
Average
Average
Average
Average
Top 20%
Top 20%
Other Useful Indicators
Return on Total Farm Assets 9.0%
6.7%
8.9% 4.4%
Total Farm Working Expenses
as a % of Gross Farm Income 43%
49%
41% 56%
7%
12%
11% 17%
Magic Index 50%
62%
53% 78%
Closing Debt per Stock Unit $176
$207
$163 $216
$3,422,389
$2,903,393
$1,684,330 $1,970,624
80%
77%
77% 68%
$324,925
$190,964
$177,957 $97,160
Personal Drawings as % of Taxable Income
29%
39%
33%
62%
Taxable Inc. as % of Gross Farm Income 43%
35%
42% 27%
4.1
6.2
9.1 5.5
25,270
18,602
17,110 15,209,
$4.41
$4.74
$3.36 $3.51
6.77
5.63
5.40 4.78
$124.47
$147.66
$131.41
$115.95
$140.27
$114.48
$118.41 $128.77 $97.52 $105.69
$95.62
$97.88
Sheep Deaths or Missing (% opening sheep) 4.9%
7.7%
9.0% 8.0%
Lambing % (Assuming 2th &
Older Ewes have been Mated) 146%
135%
136% 122%
$710
$1,106
$1,132
$895
$659
$1,000
$1,119
$857 $617 $867 $1,031 $0 $492
$772
$961
$754
Cattle Deaths or Missing (% opening cattle) 2.9%
3.6%
1.8% 5.0%
Calving % (Assuming all breeding
Cows have been mated) 96%
85%
96% 78%
Net Average Price per Hind Net Average Price per Fawn Net Average Price per Stag $0
$353
$378
$0
$408
$0
$0 $0 $0 $251
$234
$540
Deer Deaths or Missing (% opening deer) 0.3%
2.0%
0.0% 4.2%
Fawning % (assuming yearlings mated) 98%
94%
0% 59%
Debt Servicing (Interest & Lease Costs)
as a % of Gross Income Total Closing Equity Closing Equity as a % of Assets Taxable Income pre family distributions Plant Efficiency Ratio (GFI/BV of Plant) Production Figures
Total Wool Kilos Sold Net Average Price Per Kilo Wool Weight (KG/SSU) Net Average Price Per Lamb Net Average Price per Hogget Net Average Price per Ewe FARM SURVEY 2013
Net Averge Price per Calf Net Averge Price per Heifer Net Averge Price per Steer Net Averge Price per Cow Southland Southland
West Otago West Otago
Area: (Hectares) Opening Sheep Stock Units (SSU) Opening Cattle Stock Units (CSU) Total Opening Stock Units (TSU) Stocking Rate / Per Hectare Income
Sheep Gross Profit/SSU Wool Sales /SSU Cattle Gross Profit/CSU Deer Gross Profit/DSU Crop/Grazing Profit/CGSU Total Gross Profit 590
4,742
549
5,878
10.0
517
4,696
568
5,547
10.7
674 6,257 508 6,921 10.3 541
4,677
691
5,847
10.8
121.15
22.74
91.31
99.27
145.05
132.11
110.54
20.70
115.48
99.27
144.95
126.17
129.58 23.73 92.62 0.00 195.84 152.41 110.90
20.17
94.94
0.00
127.48
127.36
11.18
5.46
0.91 2.85
143.29
1,433
131.63
1,408
153.33 1,579 130.21
1,406
Farm Expenses
Wages Shearing costs Contract Work & Plant Hire Weed and Pest Control Fertiliser Seeds Feed, Haymaking & Grazing Animal Health & Breeding Power Freight General Farm Property R & M Fencing Vehicle and Fuel Insurance ACC Levies Rates Water Rates General Admin & Phone 6.65
4.61
0.60
0.94
13.64
1.09
4.20
4.60
0.43
0.27
1.40
3.71
1.82
6.22
1.60
0.49
2.11
0.00
3.22
9.24
6.46
4.29
1.38
15.64
1.44
2.71
5.15
0.61
1.17
1.02
6.50
3.01
7.52
1.65
0.71
2.27
0.09
3.53
7.68 7.82 0.77 1.53 12.05 1.89 3.43 5.25 0.48 1.50 0.78 3.12 2.99 5.37 0.93 0.87 1.73 0.00 2.40 8.23
7.79
3.56
1.62
11.54
1.68
3.25
4.51
0.57
1.56
0.87
5.10
3.61
6.57
1.37
0.57
2.10
0.06
3.45
Total Farm Working Expenses/SU Total Farm Working Expenses/Ha 57.57
576
74.39
796
59.67 615 66.72
720
Farm Surplus / (Deficit)/SU Farm Surplus / (Deficit)/Hectare 85.72
857
57.24
612
93.65 964 63.49
686
Debt Servicing/SU
Interest Paid Pastoral Lease Costs Lease Costs 15.08
0.00
2.00
16.50
0.00
0.85
21.95 0.00 0.00 19.56
0.00
0.32
Total Debt Servicing 17.08
17.35
21.95 19.88
Surplus after Debt Servicing/SU 68.64
39.89
71.70 43.62
Personal Expenses
Personal Drawings Personal Allowance Life Insurance Taxation Funds Introduced 12.51
2.68
1.07
22.52
(5.49)
12.84
2.27
0.90
12.14
(3.68)
11.66 0.98 0.47 11.94 0.00 11.77
1.44
0.65
3.63
(1.64)
Total Personal Expenses 33.29
24.46
25.05 15.85
Total Net Capital Expenditure 20.00
15.47
4.60 5.28
Total Gross Cash Expenditure
127.94
131.67
111.28
107.73
15.35
(0.04)
42.05 22.48
Plus
Sundry Farm Income/ SU Total Gross Income/ SU Total Gross Income/ Hectare Business Result FARM SURVEY 2013
2012
2011
Average
Average
Average
Average
Top 20%
Top 20%
Southland Southland
West Otago West Otago
2012
2011
Average
Average
Average
Average
Top 20%
Top 20%
Other Useful Indicators
Return on Total Farm Assets 9.2%
5.5%
12.1% 7.0%
Total Farm Working Expenses
as a % of Gross Farm Income 40%
59%
39% 53%
Debt Servicing (Interest & Lease Costs)
as a % of Gross Income 12%
13%
14% 16%
Magic Index 52%
72%
53% 68%
Closing Debt per Stock Unit $175
$238
$286 $268
$3,936,213
$3,398,673
$3,461,903 $2,710,746
80%
73%
59% 62%
$333,246
$179,231
$470,638 $217,555
Personal Drawings as % of Taxable Income
20%
29%
17%
31%
Taxable Income as % of Gross Farm Income 41%
26%
43% 28%
4.9
4.8
8.0 6.4
32,185
23,303
37,980 23,736
$4.34
$4.31
$3.79 $4.06
5.27
4.83
6.22 4.98
$130.91
$0.00
$111.02
$113.68
$118.34
$118.48
$114.78 $0.00 $106.76 $109.88
$99.55
$101.81
Sheep Deaths or Missing (% opening sheep) 6.3%
7.1%
6.5% 6.1%
Lambing % (assuming 2th &
Older Ewes have been Mated) 140%
133%
148% 133%
$550
$906
$1,022
$824
$732
$1,046
$1,027
$797
$521 $689 $960 $755 $576
$928
$1,095
$812
Cattle Deaths or Missing (% opening cattle) 5.7%
8.3%
4.8% 3.7%
Calving % (Assuming all breeding
Cows have been mated) 98%
97%
98% 104%
Net Average Price per Hind Net Average Price per Fawn Net Average Price per Stag $320
$272
$392
$315
$268
$385
$0 $0 $0 $0
$0
$0
Deer Deaths or Missing (% opening deer) 0.4%
0.4%
0.0% 0.0%
Fawning % (assuming yearlings mated) 98%
98$
0% 0%
Total Closing Equity Closing Equity as a % of Assets Taxable Income pre family distributions Plant Efficiency Ratio (GFI/BV of Plant) Production Figures
Total Wool Kilos Sold Net Average Price Per Kilo Wool Weight (KG/SSU) Net Average Price per Lamb Net Average Price per Hogget
Net Average Price per Ewe FARM SURVEY 2013
Net Averge Price per Calf Net Averge Price per Heifer Net Averge Price per Steer Net Averge Price per Cow Merino
Merino
High Country High Country
Area: (Hectares) Opening Sheep Stock Units (SSU) Opening Cattle Stock Units (CSU) Total Opening Stock Units (TSU) Stocking Rate / Per Hectare Income
Sheep Gross Profit/SSU Wool Sales /SSU Cattle Gross Profit/CSU Deer Gross Profit/DSU Crop/Grazing Profit/CGSU
Total Gross Profit 3,867
6,144
597
6,867
1.8
5,353
6,476
1,136
7,879
1.5
8,639 7,557 456 8,013 0.9 5,457
6,385
960
7,665
1.4
75.69
67.49
72.40
0.00
145.00
122.25
52.75
63.13
62.55
110.64
145.07
104.22
53.11 65.59 40.22 0.00 0.00 114.88
41.68
48.16
56.39
0.00
0.00
87.44
5.36
2.35
2.60 2.06
143.72
259
110.28
165
117.48 106 89.50
125
3.92
9.13
3.66
2.45
6.95
1.23
4.14
4.64
1.28
0.92
0.86
5.73
2.52
4.37
1.34
0.69
1.54
0.21
3.24
5.08
9.68
3.12
3.20
6.78
1.30
4.73
4.37
1.14
1.17
1.08
4.18
1.53
5.41
1.47
0.56
1.39
0.35
3.37
4.44 10.45 4.25 1.43 4.94 1.60 4.66 3.86 1.13 1.63 0.79 3.43 1.26 5.65 1.60 0.40 1.49 0.37 3.03 4.97
8.58
2.85
2.92
5.44
1.26
4.73
4.35
0.96
1.19
0.97
3.15
1.24
5.43
1.50
0.32
1.39
0.38
2.98
Total Farm Working Expenses/SU Total Farm Working Expenses/Ha 57.95
104
58.35
88
55.71 50 53.37
75
Farm Surplus / (Deficit)/SU Farm Surplus / (Deficit)/Hectare 85.77
155
51.93
77
61.77 56 36.12
50
Debt Servicing/SU
Interest Paid Pastoral Lease Costs Lease Costs 14.76
0.00
1.52
10.63
0.34
1.60
21.40 0.88 1.04 14.10
0.40
1.00
Total Debt Servicing 16.27
12.57
23.32 15.49
Surplus after Debt Servicing/SU 69.49
39.35
38.45 20.63
Personal Expenses
Personal Drawings Personal Allowance Life Insurance Taxation Funds Introduced 10.76
1.84
0.75
9.08
(1.46)
9.74
1.61
0.86
4.41
(1.23)
9.10 1.40 0.57 4.51 (2.41) 8.62
1.36
0.95
1.83
(1.33)
Total Personal Expenses 17.30
12.93
13.17 11.43
Total Net Capital Expenditure 10.78
7.82
7.87 7.08
Total Gross Cash Expenditure
102.31
91,67
100.07
87.37
41.41
18.61
17.41 2.13
Plus
Sundry Farm Income/ SU Total Gross Income/ SU Total Gross Income/ Hectare Farm Expenses
Wages
Shearing Costs Contract Work & Plant Hire Weed and Pest Control Fertiliser Seeds Feed, Haymaking & Grazing Animal Health & Breeding Power Freight General Farm Expenses Property R & M Fencing Vehicle and Fuel Insurance ACC Levies Rates Water Rates General Admin & Phone Business Result FARM SURVEY 2013
2012
2011
Average
Average
Average
Average
Top 20%
Top 20%
Merino
Merino
High Country High Country
2012
2011
Average
Average
Average
Average
Top 20%
Top 20%
Other Useful Indicators
Return on Total Farm Assets 10.9%
5.8%
6.1% 2.8%
Total Farm Working Expenses
as a % of Gross Farm Income 40%
54%
47% 60%
Debt Servicing (Interest & Lease Costs)
as a % of Gross Income 14%
13%
22% 18%
Magic Index 53%
66%
69% 79%
Closing Debt per Stock Unit $182
$138
$149 $164
$4,973,674
$3,308,901
$4,599,281 $4,181,999
79%
84%
80% 77%
$414,194
$244,569
$63,867 $68,902
Personal Drawings as % of Taxable Income
15%
32%
32%
64%
Taxable Income as % of Gross Farm Income 42%
30%
31% 18%
6.0
6.7
4.8 5.9
Total Wool Kilos Sold 33,782
31,943
36,449 27,767
Net Average Price Per Kilo $12.51
$12.46
$13.72 $10.95
5.52
5.08
5.21 4.48
$113.92
$144.46
$79.09
$104.26
$131.05
$81.41
$100.08 $90.98 $89.88 $96.83
$89.91
$81.06
Sheep Deaths or Missing (% opening sheep) 5.4%
7.2%
5.0% 6.6%
Lambing % (Assuming 2th &
Older Ewes have been Mated) 95%
80%
84% 78%
Net Averge Price per Calf Net Averge Price per Heifer Net Averge Price per Steer Net Averge Price per Cow $391
$997
$963
$715
$502
$963
$1,126
$761
$604 $918 $1,027 $744 $519
$884
$954
$791
Cattle Deaths or Missing (% opening cattle) 2.1%
4.9%
3.5% 3.7%
Calving % (Assuming all breeding
Cows have been mated) 91%
90%
81% 91%
$0
$0
$0
$418
$0
$0
$0 $0 $0 $0
$0
$0
0.0%
3.7%
0.0% 0.0%
0%
85%
0% 0%
Total Closing Equity Closing Equity as a % of Assets Taxable Income pre family distributions Plant Efficiency Ratio (GFI/BV of Plant) Production Figures
Wool Weight (KG/SSU) FARM SURVEY 2013
Net Average Price per Lamb Net Average Price per Hogget Net Average Price per Ewe Net Average Price per Hind Net Average Price per Fawn Net Average Price per Stag Deer Deaths or Missing (% opening deer) Fawning % (assuming yearlings mated) Hill Country Hill Country
Area: (Hectares) 2,934
4,885
Opening Sheep Stock Units (SSU) 5,752
7,678
Opening Cattle Stock Units (CSU) 1,487
3,028
Total Opening Stock Units (TSU) 7,326
11,614
Stocking Rate / Per Hectare 2.5
2.4
Income
Total Stock Purchases
Sheep Gross Profit/SSU 120.66
95.30
Wool Sales /SSU 31.31
29.15
Cattle Gross Profit/CSU 77.04
67.58
Deer Gross Profit/DSU 87.40
99.48
Crop/Grazing Profit/CGSU 144.24
145.17
Total Gross Profit 136.66
109.43
Plus
Sundry Farm Income/ SU 2,871 4,202 1,690 7,712 2.7 4,693
7,393
2,918
11,122
2.4
0.00
115.26 24.57 57.95 69.44 0.00 124.44 0.00
89.04
21.86
61.37
68.96
0.00
99.19
3.67
2.91
2.74 2.97
140.33
351
112.34
270
127.17 343 102.16
245
Farm Expenses
Wages Shearing Costs Contract Work & Plant Hire Weed and Pest Control Fertiliser Seeds Feed, Haymaking & Grazing Animal Health & Breeding Power Freight General Farm Expenses Property R & M Fencing Vehicle and Fuel
Insurance ACC Levies Rates Water Rates General Admin & Phone 2.35
8.27
2.45
3.35
10.32
1.96
3.59
4.58
1.06
1.86
1.11
3.31
0.75
5.29
1.61
0.82
1.69
0.50
2.32
5.37
8.05
2.49
3.06
9.51
1.84
3.78
4.66
0.93
1.47
1.15
3.77
1.99
5.52
1.42
0.54
1.45
0.35
2.20
1.31 6.72 2.04 3.12 9.18 1.33 6.99 4.29 0.85 1.59 0.98 4.09 0.90 5.43 1.31 0.60 1.73 0.24 2.42 5.13
6.97
2.24
2.34
9.02
1.87
4.92
3.97
0.95
1.32
1.05
3.43
1.55
5.01
1.33
0.46
1.36
0.30
2.37
Total Farm Working Expenses/SU Total Farm Working Expenses/Ha 55.43
139
57.18
137
53.28 144 53.72
129
Farm Surplus / (Deficit)/SU Farm Surplus / (Deficit)/Hectare 84.90
212
55.16
132
73.90 200 48.44
116
Debt Servicing/SU
Interest Paid Pastoral Lease Costs Lease Costs 5.55
0.20
1.43
9.19
0.12
0.89
2.99 0.00 1.37 9.07
0.11
0.76
Total Debt Servicing 7.00
10.16
4.36 9.94
Surplus after Debt Servicing/SU 77.90
45.01
69.53
38.51
Personal Expenses
Personal Drawings Personal Allowance Life Insurance Taxation Funds Introduced 13.28
1.30
1.26
15.74
(0.17)
6.69
1.24
0.72
6.99
(0.75)
13.14 2.63 0.57 11.36
(2.17) 9.10
1.60
0.56
4.50
(2.80)
Total Personal Expenses 25.85
14.38
25.54 12.96
Total Net Capital Expenditure 12.55
8.77
8.85 7.48
Total Gross Cash Expenditure
100.83
90.49
92.04
84.30
39.50
21.86
35.14 17.85
Total Gross Income/ SU Total Gross Income/ Hectare Business Result FARM SURVEY 2013
2012
2011
Average
Average
Average
Average
Top 20%
Top 20%
Hill Country Hill Country
2012
2011
Average
Average
Average
Average
Top 20%
Top 20%
Other Useful Indicators
Return on Total Farm Assets 10.0%
5.8%
8.0% 4.8%
Total Farm Working Expenses
as a % of Gross Farm Income 40%
52%
41% 54%
5%
10%
4% 10%
45%
62%
45% 65%
$75
$118
$35 $121
$6,161,372
$9,230,233
$5,305,165 $6,712,091
92%
87$
95% 83%
$516,894
$369,833
$456,566 $283,503
Personal Drawings as % of Taxable Income
20%
25%
22%
29%
Taxable Income as % of Gross Farm Income 51%
33%
48% 30%
5.9
6.6
5.5 5.3
32,835
38,708
21,521 34,267
$5.50
$5.55
$4.35 $4.43
5.62
5.09
5.21 4.68
$112.92
$149.70
$112.39
$108.17
$144.69
$102.70
$109.30 $99.50 $114.28 $104.12
$97.67
$100.68
Sheep Deaths or Missing (% opening sheep) 5.1%
7.0%
5.6% 6.5%
Lambing % (Assuming 2th &
Older Ewes have been Mated) 137%
118%
130% 115%
$529
$1,018
$1,154
$918
$544
$973
$1,091
$830
$568 $864 $1,109 $834 $542
$802
$978
$735
Cattle Deaths or Missing (% opening cattle) 1.8%
3.4%
3.8% 4.3%
Calving % (Assuming all breeding
Cows have been mated) 94%
92%
92% 91%
Net Average Price per Hind Net Average Price per Fawn Net Average Price per Stag $0
$0
$591
$408
$353
$0
$433 $0 $411
$387
$350
$0
Deer Deaths or Missing (% opening deer) 3.5%
4.8%
0.6% 4.0%
Fawning % (assuming yearlings mated) 98%
91%
97% 83%
Debt Servicing (Interest & Lease Costs)
as a % of Gross Income Magic Index Closing Debt per Stock Unit Total Closing Equity Closing Equity as a % of Assets Taxable Income pre family distributions Plant Efficiency Ratio (GFI/BV of Plant) Production Figures
Total Wool Kilos Sold Net Average Price Per Kilo Wool Weight (KG/SSU) Net Average Price per Lamb Net Average Price per Hogget Net Average Price per Ewe FARM SURVEY 2013
Net Averge Price per Calf Net Averge Price per Heifer Net Averge Price per Steer Net Averge Price per Cow Explanation of Key Financial Ratios Used in the Farm Survey
The following financial benchmarks are in no particular order. The benchmarks have been derived from the
performance of the top 20% of clients. They indicate the key financial drivers which are leading to a very sound
financial performance for these top 20% of farmers on an ongoing basis.
There are top farmers who can go outside one of the financial benchmarks and still generate healthy financial
performances on an ongoing basis however breaking two key benchmarks over a reasonable period, could
severely challenge even the top farmers’ ongoing viability.
The key point with ratios is to analyse them over a number of years to identify the trends.
Key Financial Ratios
Total Farm Working Expenses As A Percentage Of Gross Farm Income
This is a measure of the amount of farm related expenses required to generate gross income
(farm working expenses excludes interest, plant replacement and depreciation).
The benchmark in this area is 50-55% of GFI, unless development expenditure is being undertaken.
For example:
Gross Farm Income/SU
*Farm Working Expenses/SU
$150
$75
$120
$60
Cash Farm Surplus/Stock Unit
$75
$60
*Farming Working Expense to GFI = 50%
Debt Servicing As A Percentage Of Gross Farm Income
(Debt servicing represents interest and lease costs).
The benchmark in this area is a maximum of 20% of gross farm income.
A debt servicing percentage to GFI below 15% is really the benchmark required going forward, given
lower interest rates, especially if farm working expenses to gross farm income are above 55%.
This is a combination of farm working expenses and debt servicing (including rental payments). Ideally this ratio
would not exceed 75%. For farming business that has a gross income in excess of $800,000, then this ratio could
be as high as 80%.
The lower the ratio the better the magic in terms of profitability and cash farm surplus. The amount left after farm
working expenses and debt servicing is required for personal drawings, taxation, plant replacement, life insurance
and cash surplus or principal repayment
Return On Total Farm Assets
This is the interest that would be earned on the total farm assets if a manager was employed.
This is calculated by taking the farm surplus after deducting farm working expenses, deducting an allowance
for wages of employing a manager, ($30,000 to $100,000 depending on property size), deducting depreciation
FARM SURVEY 2013
Magic Index
of plant and machinery and dividing this figure by the estimated value of the total assets employed re land,
buildings, stock and plant and farm related shares. All land and buildings, including leased land, was estimated to
have a value of $700/stock unit (1 July 2011). Stock and plant were taken at opening book value.
Gross Farm Income To Book Value Of Plant & Machinery Assets
This ratio measures the amount of capital tied up in plant and machinery at year end, compared to
the gross income generated.
This ratio for sustainable profitability and efficiency needs to be for:
Hill Country Sheep & Beef
Downlands/Flat Sheep & Beef
Cropping
4.5
4.0
2.75
plus
plus
plus
The benchmark in this area should be in excess of two.
Where the ratio is below two, or even up to three, we find it means that either there is insufficient gross farm
income or there is an over capitalisation of plant and machinery on the property. Sometimes it is a combination of
the two, and sooner or later it will mean that too much of the gross and net income is tied up in plant replacement.
For those farmers with ratios below two, it maybe important to consider that even though good vehicles and plant
are the engine room of New Zealand agriculture, you need to have a handle on the true annual costs of vehicle
and plant depreciation and replacement, and the relativity these costs have to your gross farm income and your
cost of production.
To get a feel for the true annual cost to maintain plant and machinery at the same basic quality and productive
capacity at years end, as it was at the beginning of the year, then a farming business should multiply the book
value of their vehicles and plant by 15% to 17.5%.
Another way of measuring the ratio is to look at the depreciation charge of vehicles compared to gross income.
A depreciation charge above 8% of gross income would tend to indicate either there is insufficient gross farm
income or there is an over-capitalisation of plant and machinery.
Key Production Ratios
Lambing, Calving & Fawning Percentage Calculations
FARM SURVEY 2013
The lambing percentage for ewes is calculated on the basis of lambs sold and retained, divided by total ewes
wintered. If two-tooth ewes are not mated this would therefore, reduce the lambing percentage and if ewe
hoggets are mated, this would increase the lambing percentage.
Calving percentage for cows is calculated on the basis of calves sold and retained, divided by cows wintered. If
rising two year heifers are mated this would increase the calving percentage.
Fawning percentage for hinds is calculated on the basis of all hinds wintered including the rising two year
(yearling) hinds.
Crop Grazing Income
Where crop and grazing income is part of the farming system, we have included crop units to give a per crop unit
measure of income. This also ensures other measures based on total stock units are more accurate.
Interpretation of Farm Survey Results
The following are some observations of the results from the 2012 Accounting Farm Survey.
We have combined all the farm surveys to come up with an overall average result.
• Income is the highest ever recorded, $120.99/su, compared to $103.3/su last year (+17%).
• Farm working expenses continued to increase from $56.29/su to $62.52/su, (+11%).
• Farm surplus before debt servicing increased from $47.08/su to $58.48/su (+24%).
• The average debt loading per stock unit reduced to $160. For the average 7,800 stock unit property,
debt loading is $1,248,000.
• Debt loading for the top 20% of properties is noticeably lower at $144/su.
• The magic index for the top 20% of farmers is 50% and the average is 64%, both well inside the magic index benchmark of 75% (combination of debt servicing and farm expenses combined), to gross farm income.
Average
Top 20%
Average
Farm Performance
Difference
Top 20%
Gross Farm Income/Stock Unit
Farm Working Expenses/Stock Unit
Farm Surplus/Stock Unit
Farm Surplus For Average 7,800 SU Property
Final Business Result
$149.45
$61.23
------------
$88.22
$688,000
------------
$274,000
$120.99
$62.52
------------
$58.47
$456,000
------------
$129,000
+ $28.46
- $1.29
-----------+ $29.75
+ $232,000
-----------+ $145,000
Debt Loading & Ratios
Return On Total Assets
9.9%
6%
+ 3.9%
Debt Loading Per Starting Stock Unit
$144
$160
- $16
Debt & Lease Servicing To GFI%
9%
12%
- 3%
Farm Working Expenses to GFI%
41%
52%
- 11%
------------
50%
------------
------------
64%
------------
------------ 14%
------------
Magic Index
(Debt Servicing & FWE/GFI%)
Characteristics Of Top Quartile Farmers
• Earn more per stock unit from higher production levels (over 20% more) and high value for most classes of livestock and wool sold.
• Spend the same or less per stock unit and therefore have much better efficiencies of production.
• Debt servicing and debt loading is lower per stock unit. Once again top quartile farmers are rapidly repaying
debt and some are now debt free.
• Achieve a farm surplus 50% higher than the average, (before debt servicing).
• The final business result after all income and expenses is over twice the average.
• Capital expenditure has been higher and this is reflected in a higher investment in plant and machinery
relative to Gross Income.
FARM SURVEY 2013
The 2012 year was a stand out year.
2013
FARM STATISTICS
2001
2003
Debt Servicing
2002
FARM SURVEY 2013
-20%
0%
20%
40%
60%
80%
100%
2004
2006
Farm working expenses
2005
2007
2009
2010
Surplus after FWE & Debt Servicing
2008
2011
Debt
Servicing & Farm Working Expenses as % of total Gross Farm Income
Debt Servicing & Farm Working Expenses as % of total Gross Farm Income
2012
-$200,000
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
2001
2002
FARM SURVEY 2013
2004
Gross Income
2003
Farm Surplus
2005
2006
2008
Surplus After Debt Servicing
2007
Business
Results2001-2012
2001 - 2012
Business Results
2009
Business Result
2010
2011
2012
2001
2002
FARM SURVEY 2013
0
100
200
300
400
$/SU 500
600
700
800
900
1000
2003
2004
2006
Total Assets
2005
Equity
2007
2008
Debt
2009
Assets, Equity
and Debt 2001 - 2012
Assets, Equity and Debt 2001 - 2012
2010
2011
2012
-
20.00
40.00
60.00
80.00
100.00
120.00
140.00
1993
1994
1995
1996
FARM SURVEY 2013
1997
1998
1999
2000
2002
Year
2003
2004
Lambing Percentage Achieved
Net Average Price per Lamb
2001
2005
2006
Lambing % and Lamb
Prices
Lambing % and
Lamb Prices1993
1993-2012 - 2012
2007
2008
2009
2010
2011
2012
20
2.0
4.0
6.0
-
2005
0
2005
5
10
15
8.0
10.0
25
12.0
14.0
30
0
2005
5
10
15
20
25
30
16.0
35
2006
2006
2006
FARM SURVEY 2013
% Increase
35
% Increase
Axis
Title
2007
2007
2007
2008
2008
2008
2009
2009
2009
2010
2010
2010
ROI & Increase in Land Value
ROI & Increase in Land Value
2011
ROI & Increase in Land Value
ROI & Increase in Land Value
2011
2011
2012
Increase in Land value
2012
2012
Return on Investment
Return on Investment
Return on Investment
Increase in Land value
Increase in Land value
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
1993
1994
1995
1996
FARM SURVEY 2013
1997
1998
1999
2000
2003
Year
2002
2004
Avg Net Price per Kilo of Wool
2001
Wool Price 1993-2012
Wool Price 1993 - 2012
2005
2006
2007
2008
2009
2010
2011
2012
The Business of Farming
The 2012/2013 season has been a mixed bag with late but good Spring growth, a drier Summer and much
lower sheep meat and crossbred wool returns.
The fine wool industry has some stability with an offering of wool and meat contracts. With the lower volume
of lambs expected this coming season, supply will be tight and sheep meat returns should improve.
The dairy industry seems to be going from strength to strength.
Irrigation Nutrient Caps & the National Fresh Water Standards
The regulations associated with irrigation and fresh water management are changing rapidly.
The Government’s policy around National Fresh Water Standards is now being delivered through Regional
Council plans nationally.
The significance of this is reflected in the recent Otago Regional Council Plan change 6a. This plan change
limits water run-off (including irrigation) and places limits on nutrient leaching.
The implications to irrigated farming systems are significant. With little ability for water run-off, most wild flood
and some border dyke irrigation will have to be converted to spray irrigation.
The cap on nutrient leaching will effectively impose a production cap limiting the amount and type of fertilizer able
to be applied, and may in some cases limit the type of farming system able to be undertaken.
In addition to this, irrigation mining rights will come to an end in 2021 and irrigation consents will need to be applied
for, which will require efficient methods of water application (generally spray irrigation).
The combined effects of the National Fresh Water Standards and mining privileges coming to an end in 2021
will result in large scale changes to many existing irrigation systems on farm.
To justify a change to more efficient irrigation systems, (generally spray irrigation) will in most cases require
significant capital expenditure and increased on-going irrigation costs (pumping etc).
To justify the extra capital investment and on-going costs will require in some situations a more intensive farming
system or a change in land use.
The implications for many Central Otago irrigated farming systems will be very significant.
Return on Farm Operating Business, Return on Land Investment
2.The land ownership business is a hidden return and is reflected in capital gains over time. The returns from
the land ownership business over time can often be higher than the return from the farming business.
3.We have graphed the returns generated from the farm operating business compared to the land ownership business for the last 8 years and added this into our statistics. This has leapt up over the last couple of years
to around 6%, but on average has been 2% per annum.
4.The average return for the farm operating business has been 2%/annum.
5.The average return for the land ownership business has been 8%/annum.
6.The combined average return from the farm operating business and the land ownership business has been
10% for the last 8 years.
FARM SURVEY 2013
1.Farming businesses are made of up two different businesses - the farming operating business, and the land ownership business.
Tax Facts
Individual Basic Rates For Year Ended 31 March 2013 and 2014
Level Of Income
Annual Tax Rates
$0 - $14,000
10.5%
$14,001 - $48,000
17.5%
$48,001 - $70,000
30%
$70,001 and higher
33%
Company
-
Trust
-
-
Resident and Non-Resident 28% Flat Rate
On trustee’s taxable income 33%
Beneficiaries taxed at own rates (excepting beneficiaries under 16 years
are taxed at trustees tax rate of 33%).
Provisional Tax, Use Of Money Interest & New Provisional Tax Payment Dates
You should be aware that if this year’s taxable income is expected to be greater than last year then you may
be liable for use of money interest (at 8.4%) on the shortfall between the actual tax payable and the
Provisional Tax paid.
Remember that your Provisional Tax instalment can be revised at any time up to the third instalment date
(28 July for those with a 30 June balance date).
The Provisional Tax dates are the fifth, ninth and thirteenth month after balance date. For a 30 June balance
date these dates are: 28 November, 28 March, 28 July.
Income & Tax Thresholds For Use Of Money Interest Charges To Apply
For Year Ended 31 March 2013
Income Threshold Level
Tax Payable
Individual
$ 179,030
$ 50,000
Company
$ 8,928
$ 2,500
Trust
$ 7,575
$ 2,500
Late Payment Tax Penalties
FARM SURVEY 2013
If tax is not paid on time (excluding provisional tax payments) the following apply:
• an initial late payment fee if one day late 1%
• if still unpaid 6 days later
4%
• for every month late
1% / month
Student Loan & Allowances
The overall interest rate on student loans is 6.4% for the 2012 and 2013 year. This is subject to a full or partial
write-off depending on your earnings or student status.
Student Loan Interest
The overall interest rate on student loans is 6.4% for the 2012 and 2013 year. This is subject to a full or partial
write-off depending on your earnings or student status. The late payment interest rate for 2013 is 7.89%.
Student Loan & Allowance Changes
From January 2013 • Student allowances will not be available beyond the first four years of study.
From 1 April 2013 • The loan repayment rate (for borrowers earning over the repayment threshold)
will increase from 10% to 12% of income.
• The voluntary repayment bonus (a 10% discount on voluntary payments) has been scrapped.
From 1 April 2014 • The definition of ‘income’ for student loan repayment purposes will be broadened
to include other types of income.
If you are going overseas you can apply for a one year repayment holiday for your student loan. You must apply before
leaving or within 183 days of being overseas. You must also provide an alternative contact person in New Zealand.
The parental income threshold for student allowances will remain frozen until 2016 and the Government will
implement an information match system between IRD and New Zealand Customs Service to identify student loan
borrowers in serious default.
Changes are designed to ensure the longevity of our Student Loan Scheme and provide better value for New
Zealanders.
Student Allowance Entitlements
Entitlements for the 2013/ 2014 Year
for students who are single with no children
Joint Parental Taxable Income
(Not taking into account any tax losses brought forward)
Full Entitlement – Per Week (Net of Tax)
For 18 & Over (Some 16-17 year olds are
also entitled to this).
At Home
$137.47 (Net)
Away From Home
$171.84 (Net)
For 24 Years & Over
At Home
Away From Home
$164.96 (Net)
$ 206.21 (Net)
Abated Back To:
Nil Entitlement
- Living At Home
- Away From Home
Up To $55,027.96
Exceptions:
(1) For each additional child studying aged 16-23, this increases by $7,000.
(2) $3,400 if parents live in separate houses.
$ 83,622
$ 90,771
Standard student weekly income limit (work while studying) is $208 gross/week. Any student income over
this amount reduces the student allowance by an equivalent amount.
Non-taxable allowance - accommodation benefit (up to $40/week - varies by region).
Student allowance not available to post-graduate students.
Therefore, take taxable income and add back:
(i)
Any business losses, ie sole trader or partnership.
(ii) Income held in a closely held company, ie profits that have been kept in the company where the parents are shareholders. Unfortunately the legislation refers to companies income as being the ‘net’ income of the company for the companies accounting year. This does not mean ‘taxable income’, the losses brought forward would not come into the calculation.
(iii) Trust income not distributed to beneficiaries where the parents are Settlors of the trust. The definition
of Settlor includes anyone who transfers assets, income or money to the trust.
(iv) Fringe benefits received, eg motor vehicles, life insurance.
(v) PIE income.
(vi) Income equalisation scheme deposits.
(vii) Other payments received greater than $5k which are from any other person/entity and used for the students day to day living expenses.
(viii) Amounts received from pensions and annuities – although not always taxable income a number of these need to be added into the calculation if any were paid out during the year. The one that may be relevant is a life insurance policy or private superannuation fund paid out.
(ix) Tax exempt income.
Working for Families Tax Credits
The family tax credit (previously called Family Support) is an entitlement to assistance based on your
income levels and the number of children in your care. The full entitlement in the 2012/2013 year is:
Eldest Dependent Child
16 & Over
Under 16
Additional Children
16 & Over
13,14 or 15
Under 13
Abatement Threshold From
$ 5,303
$ 4,822
$ 4,748
$ 3,822
$ 3,351
$ 36,350
FARM SURVEY 2013
Student Allowance - Joint Parental Taxable Income Definition
(Same taxable income calculation as used for Working For Families)
In-Work Tax Credit
The in-work tax credit (previously called in-work payment) is available to eligible families that work a minimum
number of hours each week and are not receiving an income-tested benefit. The hours are currently set at 20 for
a single-parent family and 30 for a two parent household. It is also necessary to receive ‘eligible income’ in the
period, which essentially requires compensation to be received by the taxpayer. This will not cause problems for
PAYE employees or self-employed people because there is a direct link between effort and income; however it is
an important concept for shareholder-employees of a company as historically they may not have received income
in poor performing years.
Per Family (1-3 children)
$ 3,120
Per additional child $ 780
Upper Level Of Combined Family Income Where Some Assistance Ceases
Year Ended
31 March 2013
Year Ended
31 March 2014
1
$74,000
$73,724
2
$89,000
$89,493
3
$104,000
$105,262
4
$120,000
$124,702
Abatement Threshold From
$36,550
$36,350
25 cents/$1
20 cents/$1
Number of Children
Abatement Rate
Independent Earner Tax Credit
The Independent Earner Tax Credit is aimed at middle income earners who do not get any State assistance which
includes Working for Families (WFF) or superannuation. The rebate is $520/year and is available to those with
incomes over $24,000 and under $48,000. From $44,000 the rebate reduces at the rate of 13 cents
in the dollar, disappearing at $48,000.
FARM SURVEY 2013
Community Services Card Entitlement
As At 1 April 2012
As At 1 April 2013
You May Be Able To Get
A Card If You Are …
And Your Yearly
Income (Before Tax) Is …
And Your Yearly
Income (Before Tax) Is …
Single - living with others
$ 24,894 or less
$ 25,046 or less
Single - living alone
$ 26,393 or less
$ 26,554 or less
Married, civil union or
de facto couple - no children
$ 39,423 or less
$ 39,664 or less
Family of 2
$ 47,597 or less
$ 47,888 or less
Family of 3
$ 57,640 or less
$ 57,992 or less
Family of 4
$ 65,627 or less
$ 66,028 or less
Family of 5
$ 73,450 or less
$ 73,899 or less
Family of 6
$ 82,193 or less
$ 82,695 or less
For Families of more than 6, the limit goes up by $7,750 for each extra person.
By family, we mean parents (including sole parents) and children living together. Once a child is aged
18 years, they cannot use your card any more, but they can apply for their own.
Contributions And Tax On KiwiSaver
1 On 1 April 2012 tax was introduced on the full minimum 2% employer contribution. Previously tax only applied to employer contribution above 2%.
2 On 30 June 2012 the member tax credit will be halved from the current dollar for dollar contribution by
the Government, down to 50 cents. That means that the maximum member tax credit paid out by the Government will fall from $1,040 per annum to $521.
3 On 1 April 2013 employers will have their minimum contributions lifted from 2% to 3%. At the same time, workers will also be required to lift their minimum contributions from 2% to 3%.
4 The $1,000 kick start is unchanged.
From 1 April 2013 ‘kiwi savers’ will be able to evaluate and compare the performances of different funds. New
disclosure rules will ensure fund managers transparently disclose their ‘performance’ including returns, portfolio
holdings and fees.
It is unclear who will foot the bill for imposing such regulations – we could see a rise in fees to compensate.
The Government has also signalled a review of default provider arrangements to ensure fund managers operate
in the best interest of the investors.
2013 Budget Snapshot
ACC
Big reductions in ACC levies are proposed but you will have to wait for one or two years before the reductions
take effect.
ACC levies are a significant cost for businesses and households so a drop of up to 40% will be a welcome relief.
Currently ACC levies add another 1.7% to personal tax rates and are a substantial portion of annual motor
vehicle registrations.
The levies are scheduled to be cut by around $300 million in the 2014/15 year and $1.0 billion in 2015/16.
Student Loans
The Government is cracking down on Student Loan borrowing and has announced a number of changes:
• Eligibility for over 65’s has been removed
• If over 40, stricter limits will be put in force
• Those living overseas will face fixed repayment obligations and higher repayment thresholds
• Introduction of an information sharing agreement between Inland Revenue and Internal Affairs to collect contact details from passport applications.
Taxation of Property Investments
Inland Revenue will receive additional funding of $7.0 million a year so it can better pursue tax compliance in the
area of property investments. This is expected to return about $45 million a year in additional tax revenue from
property speculators who are not complying with their tax obligations.
It is timely to remind people that where a person acquires land and/or buildings with the intention or purpose of
disposing of that property then any profit derived from the disposal is taxable, even though New Zealand does not
have a capital gains tax.
The Budget confirms $80 million in funding to facilitate the Crown’s investments in regional water storage and
irrigation infrastructure schemes in the 2013/14 year. This amount is likely to see a number of regional water
storage proposals progress in the coming financial year.
Further funding beyond the initial $80 million is proposed subject to finding the right partners to invest with the
right irrigation schemes to achieve a more efficient and better water supply which will lead to improved agriculture
and a richer NZ economy.
Tax Relief for ‘Black Hole’ Expenditure
After many years of discussion, the Government has determined to provide tax deductions for various areas
of “black hole” expenditure, i.e. costs that are currently not deductible. These include:
• Deductions for legal and administration costs in applying for patents or plant variety rights.
• Making certain fixed-life resource consents are depreciable for tax purposes.
• Allowing deductions for the costs of abandoned resource consents that haven’t been lodged.
• Allow deductibility of the costs of annual general meetings.
FARM SURVEY 2013
Irrigation
2013 National Average Market Values For Livestock
Types Of Livestock
Class Of Livestock
SHEEP
Ewe Hoggets
Ram & Wether Hoggets
Two-Tooth Ewes
M/A Ewes (Rising 3 & 4 Yr)
Rising 5 Year & Older Ewes
Mixed-Age Wethers
Breeding Rams
Average Market Values Per Head
2012 Values
2013 Values
Change
$
$
$
119
78
- 41.00
101
69
- 32.00
191
121
- 70.00
166
102
- 64.00
138
82
- 56.00
78
63
- 15.00
305
273
- 32.00
BEEF CATTLE
Rising 1 Yr Heifers
Rising 2 Yr Heifers
Mixed-Age Cows
Rising 1 Yr Steers & Bulls
Rising 2 Yr Steers & Bulls
Rising 3 Yr & Older St & Bulls
Breeding Bulls
558
807
1025
665
921
1100
1992
456
724
872
546
837
1048
2098
- 102
- 83.00
- 153.00
- 119.00
- 84.00
- 52.00
+ 106.00
DEER
Red Deer
Wapiti, elk & rltd
Rising 1 Yr Hinds
Rising 2 Yr Hinds
Mixed-Age Hinds
Rising 1 Yr Stags
Rising 2 Yr & Older Stags (n/b)
Breeding Stags
Rising 1 Yr Hinds
Rising 2 Yr Hinds
Mixed-Age Hinds
Rising 1 Yr Stags
Rising 2 Yr & Older Stags (n/b)
Breeding Stags
243
413
455
276
497
1464
286
469
506
323
540
1447
188
369
416
235
414
1298
227
409
585
286
464
1492
- 55.00
- 44.00
- 39.00
- 41.00
- 83.00
- 166.00
- 59.00
- 60.00
+ 79.00
- 37.00
- 76.00
+ 45.00
DAIRY CATTLE
Friesian & Related
Jersey & Other
Rising 1 Year Heifers
Rising 2 Year Heifers
Mixed Aged Cows
Rising 1 Year Steers
Rising 2 Year Steers
Rising 3 Year Steers & Bulls
Breeding Bulls
Rising 1 Year Heifers
Rising 2 Year Heifers
Mixed Aged Cows
Rising 1 Year Steers
Rising 2 Year Steers
Breeding Bulls
1234
1806
2155
521
822
1077
1526
955
1620
1923
412
662
1198
892
1560
1873
442
736
1007
1337
668
1343
1627
342
597
1091
- 342.00
- 246.00
- 282.00
- 79.00
- 86.00
- 70.00
- 189.00
- 289.00
- 277.00
- 296.00
- 70.00
- 65.00
- 107.00
FARM SURVEY 2013
National Standard Costs For Specified Livestock Determination
Types Of Livestock
Class Of Livestock
National Standard Cost
2012
2013
Change
SHEEP
Rising 1 Yr
28.30
34.70
+ 6.40
DAIRY CATTLE
Purchased Bobby Calves
186.70
171.40
Rising 2 Yr
93.80
119.20
Rising 2 Yr
Rising 1 Yr
$
19.80
473.30
$
22.60
$
+ 2.80
- 15.30
487.60
+ 14.30
+ 25.40
BEEF CATTLE
Rising 1 Yr
302.10
339.20
+ 37.10
Rising 3 Yr Male - Non Breeding
166.70
190.10
+ 23.40
DEER
Rising 2 Yr
Rising 1 Yr
Rising 2 Yr
166.70
109.80
52.80
190.10
114.80
56.50
+ 23.40
+ 5.00
+ 3.70
Accident Compensation Corporation
Employees Earner Levy is included in PAYE deductions. Employers pay the employer levy for employees.
Shareholders and self employed add all levies together, ie $4.81/$100 earning in 2011/12.
Levies for Farmers
2012/2013
2013/2014
(GST Excl)
Levies/$100 Of Earnings
(GST Excl)
Levies/$100 Of Earnings
Earner Levy (Cover non-work accident)
Employer Levy (Cover work accident)
Residual
Health & Safety
$ 1.47
$ 2.56
$ 0.43
$ 0.005
$ 1.47
$ 2.56
$ 0.43
$ 0.005
ACC Changes
Experience rating starts from 1 April 2011. The levy that each business pays for their cover, may in part
be determined by their particular workplace claims history.
How It Works - Two Methods - No Claims Discount Or Experience Rating Programme
1 Pay less than $10,000 in levies annually - no claims discount programme.
No Claims Discount Programme for those paying levies of less than $10,000 annually.
• 10% no-claims discount provided no employee was paid weekly compensation and there were no fatal claims.
•
•
One to 70 weekly compensation days paid, there will be no change to your levy.
More than 70 weekly compensation days paid, or any fatal claims, there will be a 10% loading.
2 Pay more than $10,000 in levies annually - experience rating programme.
(For further information contact your accountant or ACC).
10% ACC Discount
ACC’s safety discount is still available as well as the experience rating. The discount applies to the work levy for the
agriculture sector. To receive this you need to attend a relevant safety course by Farm Safe (www.farmsafe.co.nz 0800-545-747) or Assure Quality (www.assurequality.com - 0508-001-122).
CoverPlus Extra
ACC is now promoting CoverPlus Extra (CPX) as an alternative to the normal compulsory ACC cover. They
have been offering a more flexible system with regards to the ACC cover you require. This is an opportunity
to reconsider your ACC options, which may enable you to achieve some of the following.
• Reduce unnecessary ACC cover with consequent savings in ACC Levies.
• Raise the level of ACC cover where taxable earnings are at an artificially low level.
• Fix a level of ACC cover without having to establish loss of earnings from your farm.
• Provide ACC cover in the first year of a new business.
• Return to work on reduced hours but still able to receive ACC payments.
We can help arrange ACC CoverPlus Extra and discuss with you the best arrangement for your circumstances.
Private insurance options are also available. Some income protection policies are designed specifically for farmers.
They provide regular income to you should you suffer a sickness or injury that prevents you from working. There
may be other benefits which take care of those unforeseen extras including hospitalisation, rehabilitation and
getting home from overseas. Other benefits under this type of policy can include:
• Partial Disability Benefit
• Recurring Disability Benefit
• Hospitalisation/Nursing Care Benefit
• Rehabilitation Expenses Benefit
• Vocational Training Benefit
• Specified Sicknesses Benefit
• Death Benefit
• Homecoming Costs Benefit
Where private insurance is used there is the option to consider having a stand down period where no payments
are received for a certain period of time, eg 4 weeks, or 8 weeks or 12 weeks. By having a stand down period this
has a huge effect on reducing the private income protection insurance premium. In the event of an accident ACC
payments can be made in the event of death to the deceased dependents children if they are 16 years of age or under.
This could be reduced with private insurance.
Options To Consider For Eliminating ACC Or Significantly Reducing ACC Charges
ACC is charged on wages, shareholder salaries, directors fees and self employed income, (not including interest and
dividends). Income from a business can be paid via interest payments on current account advances rather than as wages
or salary, and therefore, no ACC charges are due. Please note that if you choose to have income via interest or dividends
rather than wages or salary, then you will not be entitled to any income related compensation. Companies can declare
dividends which do not attract ACC charges.
Another alternative to consider where a shareholder salary is being paid, is to apply for ACC CoverPlus Extra at a
prescribed level, or alternatively for the minimum level ($21,732) and then arrange for a top up from private insurance
cover (designed specifically for farmers), which may be able to cover both accident and sickness work related compensation.
Using the correct ACC code is important in determining the ACC Levy that will be charged. For example, if the duties
of the shareholder/employee include less than 5% farming activities and 95% plus of administration activities, then the
administration code can be used.
FARM SURVEY 2013
Income Protection Insurance
Blair Pedofsky
Chartered Accountant, BCom
Blair assists a range of small to medium-sized businesses and says there
are many untapped opportunities in the region. “With ever-advancing business
technology location is no longer a barrier to successful business. It is about
working smarter and enjoying the lifestyle that Central Otago has to offer.”
After many years on school boards and local committees, his focus is now
on lowering his golf handicap, socialising and enjoying the great outdoors.
George Collier
Chartered Accountant, BCom(Ag)
George is an agribusiness specialist with particular interest in succession
planning, business growth and governance. “I’m passionate about
business growth and performance and like helping clients to achieve
both.”He is a member of the Regional Advisory Group for the Institute of
Chartered Accountants and coaches junior cricket. In the little spare time
available he enjoys exploring the outdoors on foot, bike and by boat.
Janette Matheson
Chartered Accountant, B.B.S.
Janette enjoys dealing with people involved in interesting business
ventures. “I like to see how I can add value and provide complementary
skills.” Her professional expertise includes business restructuring,
succession planning and trust administration, and benchmarking.
Cam Dykes
Chartered Accountant, B.Com(Ag)
Cam works with a range of farming and commercial clients throughout
Otago and also assists with business start-ups.“I really enjoy dealing
with the rural community, they are smart down to earth business people.”
Out of work involvements include the Dunstan High School Board of Trustees
and the management and coaching of primary school rugby and cricket.
Simon Wearing
Associate:
Rob Roy
B.Com., C.A.
Chartered Accountant, BCom(Acc)
Consultant:
Simon provides a range of specialist expertise including business appraisals, tax
planning and succession planning, across a range of industries. “Being entrusted
to advise people with their business and assisting them achieve their business
and personal goals is a real privilege”. He applies his professional expertise in
the local community as a trustee of Community House Trust; Friends of Dunstan
Hospital treasurer and Terrace School Board of Trustees chairman.
Bill Cooney
Alexandra Office:
69 Tarbert Street
PO Box 267
Alexandra 9340
Central Otago
Tel: (03) 440 0100
Fax: (03) 448 6329
[email protected]
B.Com., C.A., T.E.P.
Ranfurly Office:
11 Charlemont Street
Ranfurly, Central Otago
Tel: (03) 444 9158
[email protected]
www.iclca.co.nz
Disclaimer: The contents of this farm survey are not
intended as a substitute for specific professional advice on
any matter and should not be relied upon for that purpose.
Reproduction of any material contained within this survey is
prohibited without the written permission of the authors.