Presentations & Papers

Addendum to key determinants of profit for pasture-based dairy farms – South Africa versus Australia

By David Beca


The South Africa analysis comprises 244 sets of dairy farm data relatively equally spread across the four years of 2014/15, 2015/16, 2016/17 and 2017/18. The farms are primarily from two States; KwaZulu-Natal and Eastern Cape, although there are a small number of datasets from outside these states. South African dairy farmers experience a climate (due to latitude and altitude) that is similar to New South Wales and parts of Western Australia. The focus on domestic (not export) milk supply and the requirement for flatter milk supply curves also makes the conditions in South Africa similar to New South Wales, Queensland and Western Australia.

The great majority of the 244 sets of farm data were collected by Intelact South Africa (independent consultants), with the balance collected by Red Sky. All the sets of farm data were processed through Red Sky software, so they have all been analysed using a uniform methodology. The four years included years of high, medium and low milk prices, high and medium (not low) supplement prices, and good, average and poor weather (so average, higher than average and lower than average pasture harvest).

All graphs from the main paper, ‘Key Determinants of Profit for Pasture-based Dairy Farms’ (Beca 2020) are replicated in this addendum using the same figure numbers and titles, with the Australian (gold) and South African (green) graph of each ratio plotted side-by-side. All graphs are in USD, with the average foreign exchange rate for each year applied to that year. Unlike with the Australian dataset, there is some bias in the South African data, which is described in the paper.

It is recommended that this paper be read in conjunction with the published Australian paper, which explores the key determinants of profit for pasture-based dairy farms and the impact on business performance of changes in pasture harvest, milk production per cow and production system, as determined by pasture as per cent of cow’s diet. In addition, the paper defines a core group of ratios that can be used to reliably analyse farm business performance and identify which areas of a dairy farming business are performing well or poorly.

To view and download the ‘South Africa versus Australia’ paper please click here.

To view and download the published Australian paper from the Australasian Agribusiness Perspectives website please click here.

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