Day 5 began with tour leader Oonagh chasing her suitcase down the hill in the car park.
Our first stop was Glenn & Lynne Johnston’s farm in Clarendon. They are in an equity partnership on 325ha with 520 cows. Glenn & Lynne are the largest shareholders of the 8 investors and they are also low order sharemilkers (20%). It was very interesting to get an inside view of the ins and outs of an equity partnership. In this situation there is a board of Directors (of which Lynne is one) they catch up quarterly. All partners have off farm careers in the rural industry. Glenn and Lynne are on a 3 year contract for their sharemilking and have just signed on for another 3.
The original plan was for the Johnston’s to buy shares off the other partners however this has been put in hold due to the return not being made as a result of poor seasons and low milk pay. All the partners are understanding and accepting of this. The Johnston’s advice for entering an equity partnership is do your due diligence on the people you are going into partnership with, the farm you are buying and have trust in your partners.
Next was into Edendale to visit Fonterra processing plant which is the oldest manufacturing site in NZ. The plant predominantly produces adult milk powder and cheese. At peak they pick up 15,000,000 litres per day, 1 million litres is processed for cheese per day. Some of the factory has been automated, which allows 1.5 people to do the twice the amount it previously took 3 people. The factory also owns 1,000 ha of which 600 ha is irrigated with waste from the factory. Off this land they harvest 6.8 million dry kg of feed annually.
It was then off to Simon & Hillary Valley’s operation. They are 50/50 sharemilkers with 500 cows being milked on 170 ha. They don’t buy in any feed but they winter their cows and run young stock off farm. They are a great story of a young couple that came from a sheep background and have only been in dairy for 8 years to be where they are today. They have got to this position through strategies such as joining some cows to a Hereford bull, selling the calf for a premium and using this money to buy more cows / increase equity. They also have a holistic approach to farming. It is about everyone involved in the farm being happy and doing everything well. This is demonstrated through the presentation of their farm and having the same staff for 6 years.
Back on the road again and into Invercargill to meet with NZ’s Dairy in Woman’s Network (DWN). DWN vision is, “World leaders for woman in dairying.” It is a not for profit organisation funded through network partners. They have a board of Trustee’s and 37 volunteer who run 17 regions, in just the South Island. They hold a range of events covering areas covering social, compliance, financial and practical. A great initiative ran extremely well. We also had a presentation from ASB (CBA owned Bank) about their partnership with DWN and also a view of Rural Banking in NZ. It was great to learn a bank has partnered with DWN, “to build stronger NZ dairy businesses which will decrease the risk in the dairy sector long term.” We also learnt NZ Rural Industry has a $50billion debt of which dairy is $35 billion debt. They work off a $20.02 debt per kg MS.
We finished the day having dinner with the Wyndham Young Farmers Group. It was great to engage with other young passionate people about Agriculture and to get their perspective on the industry and their stories on where they are at in their career and their goals for progression.