An outsider’s view of what was being considered from both Cliff and wife Marieka’s side as well as that of their son Luke and daughter-in-law Mel allowed them to move forward.
“I think I can see it as reality,” Cliff told the Australian Dairy Conference in Geelong earlier this year.
His parents were still involved in the family farm at Poowong North in Gippsland, running 130 cows, in 2000. The younger couple had been progressively buying the property since they’d been farming there in the late 1960s, but could see only too clearly that it wouldn’t be possible for Luke as well as their two daughters to make a living off the farm.
They had lifted cow numbers to 200 on the home farm of 79ha, extended the six-aside dairy to a 12-aside double-up and also built a hayshed and feedpad as well as putting in new dams and powerlines.
“The paddocks were too big and we didn’t have tracks,” Cliff said.
With two houses on the farm his parents were able to remain in one until they chose to leave. Alongside their high-input dairying operation Cliff and Marieka had also developed their successful Jersey stud, Wallacedale Jerseys.
The love of stock was passed on to Luke who completed a dairy apprenticeship, then worked off-farm in the genetics and breeding industry. He could see that with the stud breeding enterprise there was the opportunity to combine this income with that of the dairying operation, to ensure there was a viable and profitable business able to support two families.
Luke and Mel started buying stock before any formal succession planning took place. They were on weekly wages but were prepared to earn less to look to the future. They built up numbers to about 20 head then bought a nearby paddock where heifers were run. Cliff and Marieka went guarantors for the land purchase for which they borrowed 100% finance.
Mel who has a banking background, said she was on low wages at the time.
“It was tight,” she said.
“We wanted to do work on the house but we couldn’t.”
After four years they sold that piece of land but continued to build up stock numbers. They also borrowed more money and bought necessities to increase production such as a tractor and automatic cup removers.
“It was all noted down,” Luke said.
“There was a lot of give and take.”
When they owned half the herd they set up a sharefarming arrangement, reflecting the labour, capital and management input of the two couples. By this time Cliff’s parents were out of the equation and the family had two houses on two titles, one of which had the dairy on it.
A banker who looked at Luke and Mel’s financial situation saw they could generate income through stock sales if they purchased the remainder of the herd and part of the milking platform.
“It was at discounted family rate but at a fair price,” he said.
This would satisfy two aims, freeing up capital for Cliff and Marieka to build a new house on their nearby runoff, and allowing them to further develop their quarter horse breeding business.
On October 1 last year they purchased the rest of the herd as well as youngstock and now their aim is to put in as much as they can, to pay off the debt from buying the land as soon as possible.
Cliff and Marieka aim to take a less active role in the farm’s day-to-day operations and in the medium term they would like to transfer the rest of the milking area to Luke and Mel at a fair market price.
That would not only free up more capital for their retirement but also allow them to honour their promise to their daughters that they would be looked after, Marieka said.
“In the back of my mind I knew this was the only way we could do it.”
