Thursday, March 28, 2024

Finding their way to farm ownership

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When Sam and Neridee Kerrison Jones decided to go farming in 2004, they were looking for a way for their young family to get ahead.
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The Wellington-based couple had little farming experience. Neridee’s father had grown up on a dairy farm at Tokomaru in Horowhenua while Sam’s parents owned a 60ha block near Wellington, raising sheep, cattle, pigs and chickens. The couple’s farming exposure had been limited to helping out on the small farm.

Next season they will progress from lower-order to 50:50 sharemilking – it’s a long way from where they first started farming, when they thought “the runoff” referred to a place where water literally ran off.

Sam and Neridee were working in sales jobs at Wellington when they decided a change was in order. High property prices in the city meant they could not see a way towards owning a house there. With one of their two salaries effectively going towards childcare, they were looking for an alternative.

Going farming seemed to offer a solution.

Initially they were looking at getting into sheep and beef farming, but without an established team of working dogs the pickings were slim to non-existent. Dairy farming was next cab off the rank. Neridee put a CV together and submitted it to a Wairarapa-based farm consulting firm. In early 2004, they started out on a 600-cow farm at Ballance, in the Tararua district between the Manawatu River and the Tararua Ranges. The area had just experienced a one-in-100-year flood, the farm was covered in silt and floodwaters had taken out fences.

“Everyone said if you can handle this year, you can handle anything,” Sam said.

Their first six months in the industry were spent with Sam operating closely with the farm owner, milking in a smaller dairy that ran in conjunction with the main dairy on the property. At the end of that season the operation was downsized back to its original 60ha, based around the smaller dairy, with Sam managing.

At the end of that season Sam and Neridee were ready to move up to a larger operation and got a managing job on a 260-cow farm at Marima, near Pahiatua in northern Wairarapa.

After two seasons they were offered a 350-cow contract milking job a bit further south of Pahiatua at Konini. It was a farm owned by their neighbour at Marima and they heard about it through word of mouth.

For their third season at Konini they became lower-order sharemilkers. With the intention of becoming 50:50 sharemilkers on the farm the following season, Sam and Neridee purchased the herd and heifer replacements from the farm owners that year. They used a rental property they had bought at Otaki Beach in 2003 to finance their way in.

As the season progressed, the farm owners opted to sell the dairy platform. When they were unsuccessful, they bought the herd back off the Jones. Sam and Neridee built some equity though the transaction but were disappointed to lose their gateway into a 50:50 sharemilking arrangement.

They moved on to their current role as lower-order sharemilkers on a 390-cow property near Eketahuna. This season is their third on the farm, and they are hoping to reap the rewards of the hard work put in over the previous two.

Their contract does not let them run any of their own livestock on the property, but they view the process of gradually building their own herd as critical to progressing. To get on the road to herd ownership, last season they started a policy of purchasing 80-100 recorded yearling heifers which they then lease out to other farmers once lactating.

The grazing required to grow them out is expensive, but once leased out on-going costs are minimal.

The intention was to do this every year, progressively building a herd so that when a 50:50 sharemilking opportunity became available they were in a good position to accept it.

While they have been in preparation mode for 50:50 sharemilking, Sam and Neridee were struggling to see where it might come from.

“You can be ready to go on, but if the opportunity isn’t there or you can’t find the right person I think there is a weakness in the sharemilking system around putting people in contact with farm owners – how do you find each other?” Sam said.

“They don’t usually go looking because they don’t want every Tom, Dick and Harry putting their hands up.”

For the Jones the opportunity came up more quickly than they had expected and once again, word of mouth came into play. A contractor who came to carry out excavator work suggested someone they should get in touch with. It turned out that Sam had played rugby with the farmowners’ son a few years ago.

The 500-cow 50:50 agreement is now signed, sealed and delivered. They just need to find the right herd at the right price and they are that much closer to their goal of farm ownership.

Advice for others

• Put yourself out there. Let people know you are looking to progress; introduce yourself around , get out of your farm “bubble”.

• Look to the future. Where is the job going to take you in three years’ time? Sam and Neridee have focused on building their position every year through stock purchases, debt reduction, savings, off-farm investment, etc.

• Get good advice. Don’t settle for an accountant just because they are geographically close; find a banker you get on with.

• Financial awareness. If you are part of couple, make sure you are both aware of your financial position so you can make good decisions.

• Use all the tools available to you. These can be tools like accounting package Cash Manager that helps you to keep track of your finances. After a few years off, Sam is working on his Level 4 PrimaryITO qualification.

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