Discussion groups are meeting up around now to discuss Profit Monitor results for 2017. While not without its flaws, it’s still the best comparison of common costs that we have, and more farmers (even those not in groups) should be using it.
The Profit Monitor will tell you what the net profit is for the dairy enterprise. This is different to what is in the bank account as it includes stock inventory (which could be positive or negative) and depreciation.
The net profit figure can be misleading as it doesn’t reflect what cash was made.
It doesn’t include any debt repayments, tax or drawings/own labour.
Furthermore, it doesn’t include all costs on the farm, as some costs will be assigned to replacement heifer or beef enterprises.
In summary, the net profit figure can be misleading as it doesn’t reflect what cash was made, or lost. However, if the net profit figure is low, the cash surplus figure will be low also.
The figures should be looked at in three ways: the total figure, the per-hectare figure (all hectares farmed) and per kg of milk solids. Looking at c/litre is a waste of time as everyone is getting a different milk price depending on percentage solids.