Dairy farmers have three areas in their budget

• the cashflow grid showing the dollar movements, 
• the livestock grid showing stock events and quantities of animals
• the Dairy Forecaster for managing actual and projected income from this season's milk production

For New Zealand dairy farmers:

For Australian dairy farmers:

Settings

Click on the Settings cog in the top right-hand corner.

• Select the bank account that your milk income is paid to
• Select the dairy company you supply
• Select your ownership type
  • Owner/Operator
  • Sharemilker (and enter your share %)
  • Contract Milker
    (Note: if you are an Owner with a Contract Milker, select Owner/Operator and enter the monthly expected payment to your Contract Milker in the cashflow under Wages : Contract Wages)
• Tick the checkbox to include Step-up payment calculations automatically (Aus only)
• Add a Management Tag if required

These settings can be amended if your situation changes.

Enter this season's budgeted milk income

In the Dairy Forecaster enter the kilograms of milk solids (or either kgMS or litres in Australia) predicted to be produced each month.

The base advance rate paid each month can be manually entered, or if you supply to Fonterra, Westland or Synlait in New Zealand, the most recent forecast prices are loaded and can be pulled in by simply clicking the Update Prices button in the top right corner. If you're a Contract Milker enter your contracted rate.

TIPS:

• Retro (last season's deferred) payments are manually entered in the cashflow under Income > Milk Production > Last Seasons Deferred.

• Fixed Milk Price contract payments come through with the previous season's retro payments, whether there is a positive and negative impact, so this is budgeted for in the retro payments as above.

• Milk company dividends, or other additional payments or deductions (eg. Winter milk or industry levies) are also entered manually in the cashflow under the appropriate extended code.

• If you are creating a plan and the advance schedule is yet to be published, you will enter a predicted milk price.

• You can update the base rate to use a more optimistic rate, a more conservative or the rate the bank suggests. A Draft plan is a great way to explore alternative scenarios, as well as updating the Working Plan.

Actual milk production

The payments for this season's milk production pull through from your coded actuals as each month passes and the revision line moves forward.

A few tips for coding your actual milk production:

• Invoice date: When coding your milk income invoice/transaction it is common practice to put the invoice date on the last day of the month the milk was produced and the payment date on the date payment was made. This means the invoice date lines up with production month.
• Quantity: Ensure you enter your actual quantity produced each month in the quantity field. In New Zealand this is kilograms of milk solids and in Australia this can be kilograms of milk solids or litres, and whichever unit of measure is used it needs to be used consistently for the entire year.

In a revised working plan the actuals section cannot be edited, as that has come through from the coding of your invoice/transaction. You can click on the three vertical dots to view the actual invoice/transaction with your coding information.

If you have not yet received the milk income in a month, or if you haven't yet coded the transaction, or if you did not supply any milk the month prior you will have an alert to notify you there is no data for that particular month.

You can also edit the Management tag directly in the Dairy Forecaster if you wish to change the tag for your milk income. Click here to learn more about management tags.

Fonterra (NZ)

• We recommend you use the Fonterra Connector (Go to Settings > Connectors > Connect Fonterra)
• Match the income (bank transaction) with the milk payment, deductions and Farm Source invoices.
• The capacity adjustment calculation is not included in your dairy forecaster.
• Inland Revenue has granted Fonterra (NZ) an exemption, and Fonterra's invoice date (Issue date) is for the month of payment and not supply. When coding Fonterra invoices, you can use the invoice date and Farm Focus will automatically align the date of supply in the dairy forecaster (For example if the Issue date is 7th Sept and the payment date is 15th Sept, Farm Focus will infer August supply in the Dairy Forecaster). Some Fonterra clients still prefer to enter the invoice date on the last day of the month the milk was produced and the payment date on the date payment was made. Consult your accountant on what is best for you but always be consistent on the approach you use.

Tips and Tricks

• The dairy forecaster calculates milk payout for the current season. It does not include retro payments. You will need to calculate your retro payment yourself and include these in the plan. It's a simple calculation - say you produced 150,000kgMS in the season and in June you were paid $7.20/KgMS and in July you have a retro payment of $7.65/KgMS. Your retro payment in July will be: $0.45 /kgMS x 150,000kg = $67,500 (NB: $7.65 - $7.20 = $0.45)

• If the Dairy Forecaster is not working, check your code set-up. Go to Settings > Codes > Farm codes > This Seasons. This season's extended code needs to have the Type set as Milk Solids.