All comparison data in this tool are taken from the Beef + Lamb New Zealand Economic Service Sheep and Beef Farm Survey. All data are final for the years displayed.


Data retention

Data entered into this calculator is not collected or retained by any organisation. It is used solely for the purpose of calculating your profitability coefficients, and displaying those coefficients in graphical form for your information.

Data sources

You should be able to get all necessary financial data for this calculator from your farm accounts. You should be able to get your farm area from your rates demands.

Year

The data is for a "financial year" or "season". Around 75 per cent of Sheep and Beef Farms use a June ending financial year; a further 15 per cent end their financial year in March; and the remainder have a variety of balance dates. Because these financial years span two calendar years, the season is expressed with reference to both calendar years - for example: 2012-13.

Use the "year" that best matches your accounts. For example, if your accounts are for the year ending May 2013, then use the "2012-13" year.

Profit

In general, profit is your gross revenue (from farming operations) less the expenditure involved in those operations. Your accounts should show a profit figure and how this is derived. Unfortunately, account presentation varies tremendously so we need to look carefully at what is included in the profit figure.

The revenue side of profit should include:

  • revenue from all "farming" activities
  • cash rebates from farming activities (e.g. fuel, fertiliser)
  • the value change attributed to changes in livestock numbers

and exclude:

  • interest and dividends received
  • revenue from "non-farming" activities (e.g. horticulture)
  • wages and salaries earned off-farm
  • large "one-off" revenue items such as timber sales

Expenditure should include depreciation and exclude the purchase of capital items and expenditure on "non-farm" activities.

Optionally, you could adjust your farm profit (to bring it to a steady state owner-operator situation) to account for:

  • wages of management where the farm is not run on an owner-operator basis (add those wages back to profit to bring to an owner-operator equivalent)
  • abnormally high expenditure when there is a catch-up on deferred maintenance (add the "excess" maintenance expenditure back to farm profit to bring it to a "normal" state)
  • abnormally low expenditure when maintenance is deferred to a future period (reduce the farm profit by the amount that maintenance expenditure is less than "normal").

Note that the comparison distributions have not been adjusted for these optional factors.

Profit is a required entry.

Hectares

Note the entry screen separates out "owned" hectares from "rented" hectares. This is simply to ensure that we capture all relevant data.

We really want "effective" hectares in each box. Effective area excludes:

  • unusable area such as swamps, lakes, rivers, and reserves
  • ungrazed areas such as forest blocks
  • areas used for "non-farming" activities (such as horticulture).

It should include "agro-forest" areas (wide-spaced trees that are regularly grazed).

You must have hectares entered into the tool before you can do a calculation. However, the entry may be in either "owned" or "rented" hecatares (or both). Note that if you have a rented area, then you must have a corresponding rental figure (and vice-versa).

Interest

This is interest paid by the farm business. This includes both term and current account interest, but should exclude interest paid for "non-farming" activities.

This is not a required entry. However, for clarity, you should enter zero if you do not pay interest.

Rent

This is the rent paid for any rented land. This should exclude any rent paid for "non-farming" assets.

This is not a required entry per se, but IS required if you have specified a rented area.

Farm Class

The default comparison is against all Sheep and Beef Farms. However, you can restrict the comparison to "similar" farms by selecting the appropriate farm class and region using the filters below the chart.

Farm classes are defined in the 'Definitions' tab of the 'Lambing Calculator'. Click here to go to these definitions.

Notes

At a minimum, you must enter a profit figure (which could be zero, or could be negative), and an area figure. If the area is for rented land, then you must also include a rental figure.

If you don't pay interest, and you don't rent any farm areas, then all three "profitability" measures will be identical. Similarly, if you don't rent land, then your EBITR figure will be identical to your EBIT figure.

However, the overall distributions include farms with varying degrees of indebtedness and proportions of rented land. Therefore, each of the three measures produces a different distribution at the industry level.