A FORMER Tasmanian cropping farm that converted to dairy farming just four years ago has taken the top award in the Australian Dairy Business of the Year competition.
The Cressy, Tas, farm “Rosemount”, owned by Rob and Jo Bradley and share-farmed by Grant and Kim Archer, produced an 18.4 per cent return on capital from an operating profit margin of 41.7pc in the competition year 2010-11.
It produced excellent figures in three key areas: pasture harvest (13.7 tonnes dry matter a hectare), labour efficiency (150 cows per full-time equivalent) and core cost control ($429/cow).
The Archers took home the sharefarmer award as well.
They also won the Tasmanian Sharefarmer of the Year award in 2011, while the farm they own at Mella, Tas, on which they have a sharefarmer, was runner-up in the 2012 Tasmanian awards.
For the Bradleys – who have no background in the dairy industry, having been involved in cropping and sheep production – the win vindicated their decision to convert a farm in the middle of the cropping/sheep belt into a dairy farm.
For the Archers, who also won the sharefarmers award, the win provides national recognition of their business excellence, which has seen them grow their net worth from $1 million in 2000 to $7m this year and produce an average 11pc return on capital in their business in the past decade, despite some tough times in the industry.
The family has taken part in the Tasmanian Dairy Business of the Year awards from the late 1980s.
The awards, which were initially based on production, have evolved into a sophisticated benchmarking program.
In his first year in the 50:50 share, Mr Archer took a good look at the figures from the award.
The farm was sitting in the bottom two-thirds of entrants.
Mr Archer said at that point he decided if he wanted a long-term career as a dairy farmer with good returns for his family, he needed to work out how to improve the farm’s performance.
He said it was obvious the better performing farms had higher stocking rates and produced more milk solids per hectare.
So he set about lifting his performance.
According to his farm management consultant, Basil Doonan, an audit at about that time revealed Mr Archer understood many of the principles of successful dairyfarming but needed to apply these on-farm to achieve the targets he had set around profitability.
Mr Archer committed to training, convincing the local department of primary industries to conduct courses where he needed to improve his skills, and was instrumental in establishing Tasmania’s first dairy business group, of which he is still an active member.
Under Mr Archer’s guidance, the local discussion group also became more business focused with members filling in figures on various aspects of their farm before each meeting, in which they were then analysed and discussed.
For the first two years after he started the 50:50 share, Mr Archer paid one of the better farmers in Tasmania to visit every month and to act as a “go-between” between him and his parents.
“He had a lot of experience and practical ideas for large herd management and was a great help,” Mr Archer said.
Mr Archer set a strategic plan for himself – identifying what he and his family wanted out of dairyfarming and where he hoped to head.
His goals revolved around his family: he wanted his children to have access to top education but also be living at home and he wanted to be able to spend time with them on the weekends.
He needed a business that would generate the cash-flow to support his family and what they wanted to do.
And the improved knowledge brought success.
By 1999-2000, the Archers had lifted their business into the top third in the Dairy Business of the Year competition and by 2000-01 it was in the top five.
Their business is a savvy mix of farm ownership and sharefarming partnerships which has allowed it to continue to grow through both good and challenging business conditions.
In 2001-02, the Archers bought the family farm and continued to refine their skills.
In 2003 they won the Tasmanian Dairy Business of the Year Award.
The Archers operated that business to the end of 2007, having built milking numbers up to 950 cows.
They then implemented the next part of their strategic plan – moving to Longford, Tas, to be close to Launceston, which provided the educational opportunities they wanted for their children, Mackenzie, now 13, Bede, 12, and Lawson, 8.
The manager at the home farm continued to run it and in the 2009-10 season negotiated a 38pc sharefarming agreement with the Archers.
In the 2010-11 season, another sharefarming couple, Leigh and Kellie Schuuring, moved onto the home farm as 50:50 sharefarmers with 930 cows.
Although the Archers had the equity of the home farm and the large herd of cows, they looked for an opportunity around Longford and in 2008-09 started a 50:50 sharefarming arrangement on “Rosemount”, owned by Jo and Rob Bradley and Jo’s extended family, the Chilvers.
The Bradley/Chilvers partnership had bought the dryland cropping property in 2006 with the view to developing it with irrigation.
The Archers put together a herd of 370 cows using, in part, extra heifer calves reared on the Mella farm.
It made more sense for them to share farm than continue to acquire land because land prices were booming and achieving suitable returns was a major challenge.
The farm had an old dairy on it, but it had not been run as a dairy farm since 2002-03.
So the shed was taken out of mothballs and some improvements to the infrastructure – including laneways and troughs and a centre pivot irrigator – were put in place.
The effective milking area was 151ha of the 400ha property, with the Bradleys running a cropping operation on the remaining area.
This approach was considered to be low risk for both parties, as the Northern Midlands did not have a successful dairying history.
Since then cow numbers and production have increased – the farm now runs 450 cows.
In the meantime, the 50:50 sharefarming arrangement with Leigh and Kellie Schuuring on the Mella property freed up the Archers’ herd of cows for other sharefarming options, so for 2010-11 they started another sharefarming agreement with their herd of 850 cows on another property in the Cressy area, owned by Jo Bradley’s brother and sister-in-law, Bill and Jill Chilvers.
The Archers milked 850 cows on this farm for the 2011-12 season in addition to those milked on the share farm with the Bradleys.
This season they plan to expand the sharefarming arrangement with the Bradleys with a new 54-bale rotary dairy being built.
This will allow cow numbers to build to 900 and the effective milking area expand to 250ha.
Carlene Dowie is associate editor of The Australian Dairyfarmer.