OVER ALL ECONOMY FOR MILK PRODUCERS 1 = 7.45 DKK Table 1. Farm income for all Danish dairy farms (conventional and organic) during the past five years Year 2011 2012 2013 2014 2015 Number of farms in sample 2,348 2,354 2,263 2,165 1,624 Number of farms in total 3,449 3,616 3,408 3,328 3,109 Number of cows 152 158 164 165 178 Number of Ha 138 145 153 157 165 In 1,000 DKK Gross Income 5,232 5,586 6,267 6,663 6,256 Unit related costs 2,553 2,860 3,195 3,165 3,349 Contribution margin 2,679 2,726 3,071 3,498 2,907 Cash capacity costs 1,435 1,526 1,649 1,787 1790 Depreciation 535 556 561 608 637 EBIT 708 644 862 1,103 480 Decoupled EU-payments 457 481 489 504 506 Net financial costs 974 933 876 897 923 Farm income 191 192 474 710 63 Cash flow before investments and debt repayment 399 358 861 915 303 Equity 5,188 5,058 4,592 4,523 4,057 Provisions 1,702 1,609 1,739 1,930 1,755 Debt 22,119 22,884 23,756 24,490 25,610 Total Balance 29,009 29,551 30,086 30,943 31,422
Table 2. Farm income for conventional (large breed) dairy farms sorted according to herd size Number of cows GNS 0-100 100-200 200-300 300-400 400- Number of farms in total 2,474 600 1,131 429 163 151 Number of cows 181 66 148 240 335 549 Ha, 161 80 144 213 271 351 Kg ECM per Cow/year 10,181 9,423 10,142 10,275 10,319 10,414 In 1,000 DKK Contribution margin 2,852 1,031 2,361 3,756 5,368 8,465 Cash capacity costs 1,796 666 1,492 2,381 3,352 5,217 Depreciation 648 236 562 895 1,255 1,566 EBIT 407 129 306 480 761 1,682 Decoupled EU-payments 509 256 461 651 848 1,114 Net financial costs 933 251 744 1,337 1,762 3,007 Farm income -16 134 23-206 -153-211 Salary 433 383 452 496 417 337 Farm income after owner salary -449-249 -429-702 -570-549 Total Assets 31,842 15,462 28,436 41,209 54,394 71,400 Equity 3,892 5,378 4,133 2,364 4,289 87 Key figures Soliditet, % 12% 35% 15% 6% 8% 0% Return on farm assets 0.8% -0.4% 0.6% 0.8% 1.4% 2.1% Operating margin, farming activities 3.8% -2.6% 3.0% 3.6% 6.1% 7.5% Asset turnover ratio, farming activities 0.21 0.17 0.20 0.21 0.23 0.28 productions price pr kg ECM 2.78 3.22 2.86 2.77 2.68 2.54 % of rented land 30% 23% 28% 32% 34% 35% Farm assets per cow 163,463 206,451 178,216 161,200 153,558 123,014 Farm income in 1,000 DKK 1.500 1.000 500 0-500 -1.000-1.500-2.000 0-100 100-200 200-300 300-400 > 400 Best 1/3 Average Bottom 1/3 Number of cows Figure 1. Spread in operating results - full time dairy farms with large breed sorted according to size
Table 3. Investment and financing for conventional farms with large breed sorted according to herd size Number of cows Gns, 0-100 100-200 200-300 300-400 Investments Amount in DKK 1.000 Buildings 374 70 282 522 834 1,192 Equipment, fixtures and fittings 198 28 143 318 408 731 Machinery 105 57 88 117 190 313 Land improvements 21 3 5 6 8 9 Total investments, production facilities 698 158 519 964 1,440 2,244 Depreciation 648 236 562 895 1,255 1,566 Net investments, production facilities 50-78 -43 69 185 678 Land 445 207 525 639 203 547 Milk quota etc -4 1 1-10 -29-19 Net investment, farming 490 130 482 698 359 1,206 Cars, private housing and other 77 26 91 57 75 171 Total investments 567 156 573 756 434 1,378 CASH FLOW AMOUNT IN DKK 1.000 Cash flow before investments and debt repayment 229 203 207 176 413 445 over 400 Net liquid funds -987-189 -929-1,475-1,635-2,498 Self-financing ratio, % 40% 130% 36% 23% 95% 32% Depreciation coverage 0.35 0.86 0.37 0.2 0.33 0.28 DKK per cow/year Net investments, production facilities/cow 276-1,179-294 287 554 1,235 DKK pr. Cow 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0-1,000 3,656 187 259 295 271 1.748 7,127 608 727 1,084 1,432 4,238 196 389 165 665 7,021 446 863 1,773 2,024 1.546 1,820 991 1,295 1.398 1,331-95 -44-121 -45 Bedste 1/3 Ringeste 1/3 Bedste 1/3 Ringeste 1/3 100-200 Cows 300-400 Cows 833 Realized loss on derivates ect. Other debt Interest Overdraft interrst Bank loan interest Mortgage Financial incomes Net Tenancy Costs Figure 2: Finansial cost pr cow convention large breed dairy farms. The average for the best 1/3 and the bottom 1/3
DKK pr. ECM 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 3.53 3.22 3.08 2.86 2.96 2.77 2.89 2.68 2.73 2.54 0-100 100-200 200-300 300-400 > 400 2014 2015 Herd size, number of cows Figure 3: the development in the average produtions price pr. kg ECM, inclusive owner Salary and renumination of the farming assets. The production price 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0.40 0.20 0.20 0.20 0.29 0.23 0.21 0.27 0.22 0.18 0.25 0.29 0.18 0.21 0.23 0.19 0.21 0.35 0.34 0.35 0-100 100-200 200-300 300-400 Over 400 Herd size, number of cows Cash flow higher than depreciations Cash flow between 50 % and 100 % of depreciations Cash flow less than depreciations Negative cash flow Figure 4. Comparison of cash flows before investemens and debt repayments with the level of depreciations
Tabel 4. Farm income for dairy farms according to breed and management method Large breed Jersey ORGANIC CONVENTIONAL ORGANIC CONVENTIONAL Number of farms 273 2,478 38 311 Number of cows 159 180 149 169 Ha, 217 161 129 133 Kg ECM per cow 9,029 10,156 8,357 9,154 Sales price DKK per kg ECM 3.13 2.27 3.35 2.33 production price DKK pr kg ECM 3.31 2.79 3.34 2.85 Amunts in 1,000 DDK Contribution margin 3863 2844 3012 2477 Cash Capacity costs 1,956 1,796 1,456 1,625 Depreciation 692 642 503 518 EBIT 1,216 407 1,053 335 Decoupled EU-payments 608 507 416 406 Net financial costs 1,027 924 723 788 Farm income 797-11 746-47 Farm assets 32,766 29,693 24,010 23,210 KEY FIGURES Equity-to-assets ratio. % 18.5 13 15.3 13.8 Farm asset returns.% 3.0 0.8 4.1 0.6 Operating margin;% 13.6 3.6 15.7 2.4 Asset turnover ratio 0.24 0.23 0.26 0.24 Number of cows per ha in rotation 1 1 1 1 % of rented land 39 30 37 35
BUSINESS CHECK Cattle 2015 Table 1. Main results for Conventional large breed herds from 2012-2015 2012 2013 2014 2015 Farms in sample 431 472 561 474 Kg ECM per cow, delivered 9,227 9,619 9,894 10,361 Sales price per kg ECM 2.52 2.87 2.88 2.28 DDK PER COW Gross Income 26,663 30,290 31,119 27,440 Feed 13,555 15,261 14,755 14,485 "Veterinary and other unit realted costs" 2,382 2,432 2,495 2,502 Total Unit related costs 15,937 17,693 17,250 16,988 Contribution margin 10,726 12,597 13,870 10,452 Labour costs (incl, owner salary) 3,818 3,905 4,191 4,104 Maintenance, energy etc, 3,050 3,173 3,396 3,085 Rental and capital costs 5,062 4,792 4,685 4,676 The result of the year -1,204 727 1,598-1,412 Break even contribution margin 11,930 11,870 12,272 11,865 KEY FIGURES Production price per kg ECM 2.71 2.76 2.72 2.49 Feed cost per kg milk 1.46 1.58 1.49 1.39 Return on assets, Dairy 1.8 4.5 6.4-0.1
DDK pr. Cow 11,863 1,192 3,632 10,069 10,692 999 10,062 2,902 12,464 1,233 3,964 13,377 2,936 2,636 3,031 4,104 4,155 4,237 Break even CM Contribution margin Break even CM Contribution margin Break even CM Contribution margin Other capacity costs and cost of NWC Equipment incl. energy Buildings Labour (inkluding owner salary) Conventional, large breed Conventional, Jersey Organic,large breed Figure 1: The relation between achieved contribution margin and break even margin in 2015. DKK. pr. kg ECM, Del. 4.00 Conventional, large breed Organic,large breed 3.75 Conventional, Jersey Organic farm gate price in 2015 3.50 Conventionel farm gate price in 2015 3.25 3.00 2.75 2.50 2.25 2.00 1.75 1.50 0% 20% 40% 60% 80% 100% Pct. of the dairy farms Figure 2: The spread in the production price or kg ECM. Source: Business Check Kvæg 2015 DKK pr. 100 FEN(1 FEN =7,43 MJ NEL) 230 210 190 170 conventional, loamy soil conventional, sandy soil with irrigation conventional, sandy soil without irrigation Organic, sandy soil 150 130 110 90 0% 20% 40% 60% 80% 100% Percentage of farms Figure 3: The spead in the production price for roughage. Source: Business Check Kvæg 2015.
10 YEARS OF DEVELOPMENT - Dairy farms Table 1. From 2006 to 2008 the value of the land has partly been estimated according to the public assessment, while it as of 2009 and onwards follows the fair value of the land. The change of the principles of estimation means that the assets are not YEAR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Number of dairy farms 4,668 4,410 4,202 3,737 3,719 3,449 3,616 3,408 3,328 3,109 Number of cows 103 110 121 133 139 152 158 164 165 178 Ha, 108 113 119 129 137 138 145 153 157 163 Kg ECM per cow 8,481 8,583 8,603 8,799 8,813 8,739 8,891 9,121 9,565 9,978 Sales price, DKK per kg ECM 2.17 2.38 2.77 2.08 2.42 2.67 2.57 2.93 2.95 2.35 Sales price, DKK per kg ECM, 2014 prices 2.54 2.75 3.07 2.27 2.59 2.78 2.63 2.97 2.97 2.35 Income statement INCOME STATEMENT IN 1,000 DKK PR, FARM Contribution margin 1,511 2,049 2,275 1,264 2,254 2,679 2,726 3,071 3,498 2,907 Cash capacity costs 742 892 1,063 1,176 1,292 1,435 1,526 1,649 1,787 1,790 Depreciation 288 361 416 479 498 535 556 560 608 637 EBIT 481 796 796-392 463 709 644 862 1,103 480 Decoupled EU payments 376 401 417 433 463 457 481 488 504 506 Net financial costs 482 684 1,159 970 1,030 974 933 876 897 923 Farm Income 375 512 54-928 -104 192 192 474 710 63 Farm Income (2015 prices) 440 592 60-1,011-111 200 197 481 714 63 Balance Sheet BALANCE SHEET IN 1,000 DKK Total assets 21,177 25,933 29,632 28,402 30,236 29,009 29,851 30,085 30,943 31,422 Gæld i alt 10,999 14,392 17,542 18,975 20,968 22,119 22,884 23,755 24,490 25,610 Return on Farm Assets 2.1 3.1 2.5-2.0 1.1 1.9 1.8 2.3 3.3 1.0 PER UNIT (CONV, LARGE BREED) Contribution margin per cow 10,138 11,619 13,321 5,151 9,947 11,850 11,064 13,534 15,165 10,324 Productions price, DKK pr kg ECM, large breed 3.05 2.95 3.18 3.01 2.78 Productions price, DKK pr kg ECM, large breed (2015-prices) 3.17 3.02 3.23 3.03 2.78