Younger than 50, older than 60

MILKING PLATFORM: SOUTH WAIKATO

Younger than 50, older than 60

Helping the next generation into dairy farm ownership while the value of land keeps rising is concerning George Moss enough to try to get mutual parties together for a weekend.

Younger than 50 and older than 60, then this might be of interest to you?

To the heading later. What a difference a bit of timely rain makes in the autumn. Both farms significantly up and doing farm records with a lot less purchased feed. One farm’s production is up 7% and the other 11%. We kept the dry-off dates early again this season, and selected April 7 and May 5. The early dryoff herd is hitting just over 1200kg MS/ha and 482kg MS/cow which is 100% of measured liveweight. The later dry-off herd was just behind. Indicative greenhouse gases (GHG’s) appear to be around 11.6t/ha and GHG per kg milk solids around 9.7kg CO2e /kg MS. You decide whether that is good, bad or otherwise. Nitrogen looks to be about 77kg N/ha. Again I’m not saying that is good or bad. The other farm will be better on both metrics, but I’m still to do the numbers. While early dryoff in these years of high milk prices seem counter intuitive, Dairybase would indicate it is the right answer for our bottom line. We are taking fixed milk prices again even though we have been “out of money” over the last few times. We note that financiers are pricing certainty of cashflows and environmental management into their pricing models and this has helped when negotiating.

Why the heading? Well, progression of the next generation of dairy farmers into land ownership is challenging this industry as the value of land appreciates faster than the “younger ones” can accumulate capital. I do not see dairy land values going any way other than up because of the multiple pressures of land use change to horticulture and regrettably, houses, the performance of dairy relative to other livestock classes and inability to convert land to cows easily.

On the other hand, I see many farm owners of our generation who want to maintain an investment in dairy, but either do not have the energy or inclination to tackle the “new world”.

The thinking is to pull the two together for a weekend at a resort, where there will be speakers on governance models, contractual expertise and on relationship management. With six or seven formal meals the idea being that owners and aspiring owners will be able to meet and dine informally to get a feel for common values and interests or otherwise.

If you are a farmer looking to pull back, maybe retire and you are prepared to enter into a formal governance structure (potentially with an independent director involved) that gives all the parties equal influence and say regardless of percentage stake. If you are merely looking for someone to milk cows and do the ‘donkey work’ then this is not for you. If you are serious about a managed exit or creation of an enduring dairy business meeting all stakeholders goals, then this might be for you.

Equally, if you are a younger couple with a proven track record of performance and see the merits of working with existing ‘old money’ to create a stronger business for all parties, then we are interested in you.

Key is for both parties to be absolutely honest in laying all their cards on the table, both business and personal. Both parties need to appreciate that they are equals around the decision table even if the ownership is not 50/50.

In bringing the parties together for a weekend, we do not know the outcomes or even if it will work. If we could get 10 couples from each side for a weekend of enlightenment and potential opportunity that would be good. Nothing ventured, nothing gained, but we need a new model to create more enduring and robust dairy businesses.

Thoughts are to come together prior to Christmas. Expressions of interest to NZ Dairy Exporter.

If you are not a reader of the Exporter, you are probably not open minded enough for the new possibilities.

Contact: Jackie.harrigan@nzfarmlife.co.nz for initial expressions of interest.