Failure to “date before signing the marriage certificate” could mean there was a higher likelihood of relationship failure and a poor grazing outcome.
Successful engagement hinged on effective planning and communication well-before the first cow or heifer stepped off the truck. Ideally, graziers should be in touch with dairy farmers before planting crops.
This was particularly important during a low-payout year when dairy farmers could be having second thoughts about the need for off-farm wintering.
After confirmation of winter grazing, graziers should keep the dairy farmer informed about crop yields, and whether they were on target to meet feed requirements.
Conversations should also be had a couple of weeks before cow arrival to confirm animal numbers, date of arrival and body condition score status.
It was also a good idea to confirm earlier conversations around expectations of performance, and the likely date of departure. The other key time for communication – and often overlooked – was at the end of the season.
“A discussion should be held as soon as the cows have gone home, and it needs to be courageous and constructive covering aspects such as what was done well, what could be improved and what could be changed,” Murphy said.
A grazier support team was a good idea. The dairy farmer or a nominated representative was an essential member as perhaps was a “third party” such as a stock agent, vet or farm consultant.
Panel members agreed useful times to have a third party included during measurement and agreement of crop yields and condition score, assessment of how well the cows were doing and feeding levels, and if necessary for price negotiation.
FARM FACTS
Top tips for a successful dairy farmer-grazier relationship:
• Start discussions before planting winter crops
• Keep the dairy farmer up-to-date on crop yields
• Agree on a crop and stock monitoring plan
• Agree how and when communication will happen during the grazing term, and
• Get a written contract that includes roles and responsibilities and a process for dealing with potential issues.
CONTRACTS
Contracts were a useful tool in getting both parties to ask appropriate questions. As well as playing a protective role, going through the contract process helped farmers identify and agree on all the issues that were important to the individual parties before the animals arrived.
The contract should have an agreed monitoring and communication plan that included the expected number of winter visits from the dairy farmer or nominated person, and the responsibilities of each party.
Although a contract can be either verbal or written, a document was the evidence of what had been agreed and best evidence if the dispute ended going to court, central Otago lawyer Mary Flannery said.
There was not a one-size-fits-all agreement but the more that was recorded at the outset should make any resolution process, if needed, easier.
“If communication is going well you’ll probably never need to refer to it – but the consequential loss of when things go wrong is big.”
Flannery said the four-week termination clause some contracts included could be negated by including payment from the dairy stock owner of a non-refundable deposit.
“Even successful long-term agreements can run into issues and the contract is always the first document to surface to help reach a solution.”
Federated Farmers’ Nick Abbott talked about a recently released three-in-one grazing document covering young stock grazing, winter grazing and drystock grazing.
“While one size will never fit all, the contracts can help form the foundation of a great working relationship between grazier and dairy farmer,” he said.
GET A PLAN B
Cost-cutting measures by dairy farmers this season could leave graziers with winter crops but no dairy stock to graze them.
“Many dairy farms are dropping their stocking rates and-or looking to winter cows on their milking platform in an attempt to control costs in the depressed dairy market,” AbacusBio consultant Kevin Wilson said.
He said graziers were in a highly leveraged situation once a crop was in the ground, and if they had no grazing commitments it was important to explore other land-use opportunities.
He presented a gross margin analysis comparing alternative land use options – see Table One.
Both dairy farmers and graziers appear to be lax in committing to paper winter grazing arrangements if a 2013 Kelloggs Rural Leaders project is any indication.
The project, Wintering in Canterbury-North Otago: Business relationships between dairy farmers and graziers, by DairyNZ Canterbury and north Otago regional manager Virginia Serra Postiglione surveyed 33 dairy farmers, 24 graziers and 13 rural professionals about the winter grazing of dairy cows.
Only 50% of the graziers and 25% of the dairy farmers surveyed had a written contract for the winter grazing of stock.
When asked what made for a successful relationship the farmers said that maintaining regular contact, having a long-term, ongoing relationship and having good communication with the other party were the three must-haves.
They ranked having a contract as the seventh most important requirement. The main reasons given for the breakdown of a relationship were the grazier’s lack of skill at feeding dairy cows, wrong assessment of the feed available, cows being lighter at the start of winter than agreed and lack of regular monitoring and communication.
Other challenges to the business relationship were the low use of written contracts, the predominant payment method of dollars a head each week, and settling the price too late in the season.
Dairy winter grazing systems
AbacusBio consultants Jo Kerslake and Kevin Wilson, and Central Otago consultant Jane Mitchell are leading the Sustainable Dairy Grazing project. It is funded by the Ministry for Primary Industries’ Sustainable Farming Fund, DairyNZ, Beef + Lamb NZ, and has in-kind support from Federated Farmers and the Otago Regional Council.
The overall aim of the project is to ensure the future success and profitability of dairy winter grazing systems in Central Otago by providing reliable information to make productive, profitable and sustainable decisions about around dairy grazing.
Useful resources
• Federated Farmers’ dairy grazing agreement template – www.fedfarm.org.nz/services/Contracts–Agreements/
• DairyNZ’s heifer grazing responsibility checklist – www.dairynz.co.nz/media/1734107/heifer-grazing-responsibility-checklist.pdf
