Qld Dairy Accounting Scheme
Background to Dairy Farm Accounting in Queensland
The first on-farm cost analyses were undertaken in 1974. These variable cost analyses were done by dairy advisers for their farmers to help answer the question, " is the production of extra manufacture milk profitable?" These farmers were located in areas that little or no access to the capital city market milk trade.
The initial data was collected from cheque butts, factory statements and invoices. It was a manual system with analysis completed using a hand held calculator. There was limited scope to produce regional averages, investigate different production systems or conduct benchmarking exercises.
In 1980, the farm accounting system was computerised and the Queensland dairy accounting scheme (QDAS) was made available to all Queensland farmers. In 2003, cooperators in Northern NSW joined the scheme.
Over the years the scheme was been revised and improved. In 2007, 150 dairy farmers supplied data for analysis. The scheme has grown from a variable cost analysis system to one that provides reports based on the four business traits:
- Liquidity
- Profitability
- Solvency and
- Efficiency.
Analysis concentrates on 14 key performance indicators (KPI's). These together with benchmarking details are explained in this years report, Balancing dairy production profits in Northern Australia.
How Do You Become a Member of QDAS
To become a member of QDAS you simply ask your local adviser or processor representative for the necessary input sheets. They will explain the system and assist in getting you started. Many of the original farmers are still in the scheme, having used QDAS for more than 20 years.
There is no charge for the service, and all individual records and reports are confidential. Each farm has a code that is known only to the co-operator and his adviser.
All cooperators in QDAS now use on-farm computers to collate monthly accounts, produce Business Activity Statements (BAS) and/or provide compiled data for taxation preparation. Co-operating farmers use a coding system that is compatible with all these statements and uses. It is simply a matter of printing a cash flow for the financial year and entering this on an input sheet.
Using the Scheme
Local advisers help farmers interpret the data when conducting farm visits and district, regional trends are discussed at discussion group meetings, field days and are also widely reported in farm related papers and journals. The reports also assist researchers formulate proposals and monitor economic progress of demonstrations and trials.
Initially the emphasis is on your figures and how the KPI's have changed on your farm. These are unique to your property and management and are therefore the starting point for you to build on and improve.
Average figures for other farm groups and production systems are used as a guide for you to access where you stand in the industry. The overriding importance of QDAS and benchmarking is that you set the goals as they relate to your farming operation.
Together with your adviser, you can draw up a management plan to achieve your personal goals - which may be totally different to other local farmers. Both physical and financial data is required.
Physical data
- Litres of milk production, butterfat and protein - shown on factory statements,
- Cow and heifer details,
- Areas used for the milking herd and heifers - including agisted areas,
- Labour details,
- Quantities of grain, hay, silage on hand at the start and end of the accounting period and the tonnages used throughout the year. This allows QDAS to accurately calculate feed costs and to calculate accurately profit ratios.
Financial data
Financial data is taken from computer records and entered under the following headings:
- Cash receipts - milk, cattle, other dairy related income, other farm income,
- Cash payments - variable costs, administration and overhead costs, labour costs, financial costs, capital costs, personal living costs (optional).
Output
Major reports include the following:
- Annual Cash flow report,
- Annual Gross margin report,
- Five year statistical summary, and cashflow summary
- Profit map and
- Data from the "Top 25%" - based on operating profit per cow.
These reports together with the district summaries contain the results for the 14 vital management KPI's.
For further information contact:
Graeme J Busby
Principal Extension Officer (Dairy Farm Business Management)
DPI, Box 102
TOOWOOMBA Q 4350
AUSTRALIA
Phone: 07 4688 1254 or 0418 790 837 | Fax: 07 4688 1197