“It made us learn so much more about what we do,” Colleen said.
“We got stuck into CashManager and started pulling things apart and looking at the coding and questioning everything and how we did it and why. It made us really focus on our business.”
“We learnt that you can’t make the outside work if the inside isn’t working,” John said.
That focus has continued with GST returns now done monthly, allowing easy updating of year-to-date figures, and the couple keeping an eye on the payout, the weather and other factors that influence their business.
With southern farmers experiencing one of the wettest and coldest late springs and early summers for decades, and another payout plunge, the Neustroskis have cut their farm working expenses (FWE) from $3.55/kg milksolids (MS) last year to a budgeted $3.12 (based on production of 254,000kg MS).
One of the first things to go was palm kernel, even though it has reduced their budgeted production.
“Being a medium input farm we can switch up or down depending on the payout,” John said.
“It’s a good way to be. We’ve only used palm kernel to fill feed shortages and we find buying it on contract doesn’t suit us as then we’re locked in. If the feed shortage doesn’t happen we still have to use it,” Colleen said.
Molasses in the rotary has also been cut. This year it was used only from calving until artificial breeding was finished “to get the cows on the platform”.
Last season they used the high payout to put on capital fertiliser, a new tractor shed, a bridge so the cows no longer had to ford a creek to get to a paddock, fences replaced and knaprock spread on lanes and gravel around water troughs.
They also reduced debt to a current level of asset-to-debt ratio of 50:50.
“That is our goal, to continue to reduce debt. We don’t want to buy another farm or more land. We’re happy with what we’ve got. We have a holiday house in the Marlborough Sounds and that’s going to be it at this stage,” John said.
Their two sons are in their 20s, one a chef in Melbourne and the other flying helicopters at the glaciers on the West Coast before heading to Canada when this tourist season ends.
“They both have an interest in the farm but we’ve told them to go see the world first. That’s what they want to do. Once you’re milking cows then that’s it.”
Instead Nathan Gold, who has been with them for seven years, the past two as a contract milker, is responsible for hiring labour and making sure the cows get milked.
“We look after the calves so we’re always crossing paths with him every day and we always stop and have a chat. We don’t have formal meetings but we’re always talking about what’s happening,” John said.
“It’s critical to have staff you can talk to.
“We know he wants the cows to do their best and he knows how we like the farm looking, that we like things done right. We’ve invested heavily in infrastructure on the farm to make it a good place to work and he appreciates that.
“But we don’t make our staff our friends, however we do treat them well. We look after them.”
Looking after them last year meant a helicopter flight into Fiordland when they found out none of the staff had been in a chopper before.
Colleen said communication and a working relationship with their bank manager and accountant were also key.
“We’re probably talking to the bank every fortnight giving them a heads up about what’s going on and we find an accountant who is on the same wavelength as us is important. They have to have an understanding of what you are doing and why – what our goals are.”
Also part of their team is farm consultant Ivan Lines.
“He comes in about four times a year and just gives us another point of view about what we’re doing. He’s a fresh set of eyes.
“He’s also is a go-between, between us and the staff. He’s in the best position to see where any of us could make improvements.”
And communication is also important between the two of them.
“One of the strengths of our business is that we work well together,” Colleen said.
“We bounce ideas off each other all the time. John has these harebrained schemes and I tell him, I don’t think so. He’s the positive and I’m the negative. Not that I’m that type of person, there just has to be someone there to fill both of those roles.”
“We’re always looking at opportunities, looking at ways we could make something work,” John said.
“I think some of that is from going through a conversion. There are so many challenges and you learn so much and you keep that way of thinking all the way through,” Colleen said.
They came to Southland in 1993 after milking 300 cows on 80ha near Te Aroha, wintering on for Colleen’s parents.
Wanting to grow their sharemilking business, they decided to look at an offer from Tasman Agriculture and flew to Invercargill.
“We looked at this farm west of Winton and it was snowing and there was not a blade of grass to be seen and there were sheep everywhere. Then they showed us a first-year conversion and a second-year and a third-year and said we had 24 hours to think about it. We made up our minds on the flight home.”
When they arrived at the farm at the start of June there was a dairy in the middle of a paddock and that was it.
“We fenced around the cows when they needed shifting. We helped the contractors build tracks and put in troughs and fencing. With our staff we did everything from ripping out the old fences to putting in tape gates and underground cables.”
In six years they grew from milking 570 cows to 1100, bought a couple of small farms and by June 2006 were able to buy Kahikatea Dairy which was a self-contained farm milking 300 cows producing 130,00kg MS. The Neustroskis now run it as a milking platform with a support block five minutes away for the calves and another at Dipton for wintering. Last season they produced 271,730kg MS.
“We wouldn’t have got to the size of where we are today if we hadn’t moved down to Southland when we did.
“People say the Neustroskis are lucky, look what they’ve got but we’ve worked hard to get where we are. I did 28 years putting cups on and that was enough,” John said.
They both say stepping out of the dairy has given them a better understanding of their business.
“It gives you more time to think and to see what is happening around you, and the opportunities that are out there to take.”
Key points:
Farm: Kahikatea Dairy
Owners: John and Colleen Neustroski
Location: Centre Bush, Winton
Area: 169ha milking platform, 57ha support area, and 95ha support area at Dipton
Herd: 570 crossbred, BW 147, PW 184
Planned start of calving: 28 July
Production: 2013-14 season 271,730kg MS
