Con­ver­sions lure skills south

Matamata Chronicle - - Rural Delivery - By ALI TOCKER

Waikato dairy farm­ers are be­ing forced to hire staff who are not up to the job as the re­gion bleeds ex­pe­ri­enced se­nior peo­ple to South Is­land con­ver­sions, a re­cruit­ment ex­pert says.

John Fe­gan, man­ag­ing di­rec­tor of dairy in­dus­try re­cruit­ment com­pany Fe­gan & Co, is ex­pect­ing some ‘‘grumpy’’ em­ploy­ers in the next three to four months as they dis­cover young peo­ple, pro­moted above their ex­pe­ri­ence, strug­gle to ful­fil ex­pec­ta­tions.

In an­other sig­nif­i­cant trend, dairy farm own­ers are shift­ing from 50-50 and vari­able or­der sharemilk­ing ar­range­ments, to eq­uity and con­tract milk­ing ar­range­ments, Mr Fe­gan said.

With about 60 large-scale South Is­land dairy con­ver­sions un­der way, mainly in Can­ter­bury, many se­nior staff and peo­ple with large-herd ex­pe­ri­ence are be­ing re­cruited south, he said.

‘‘Sixty farms with 800 cows each and four staff on each farm means 240 new staff are needed in the South Is­land in one whack.

‘‘For the larger herd man­ager roles, some peo­ple are get­ting paid at a level be­yond what the job would or­di­nar­ily com­mand purely and sim­ply be­cause of sup­ply and de­mand. That’s what’s made this re­cruit­ment sea­son quite chal­leng­ing.

‘‘Though the con­ver­sions are hap­pen­ing in the South Is­land, there’s a flow-on ef­fect up here and through­out the whole coun­try, which has put pres­sure on price.’’ Mr Fe­gan pre­dicts chal­lenges in spring. ‘‘The larger farms have strug­gled to find qual­ity man­agers and se­nior staff. In years like this, peo­ple tend to be over-pro­moted.

‘‘Come the mid­dle of calv­ing, em­ploy­ers re­alise they have hired peo­ple who don’t have the skills they’re pay­ing for and the em­ploy­ers get grumpy. The em­ploy­ees get the hack for it but the re­al­ity is the em­ployer agreed to the terms and con­di­tions.

Mr Fe­gan said up­skilling was a longterm fix. In the short-term, own­ers should fill the gaps with ex­ter­nal ad­vice; a farm con­sul­tant for is­sues around cows and grass and a vet for an­i­mal health.

‘‘The farm owner has to be care­ful about how grumpy he gets if he’s picked some­one who’s not quite ready and not pro­vided the sup­port around them and paid a wage be­yond where they’re at. It’s an un­for­tu­nate pain of growth. Although the growth is hap­pen­ing in Can­ter­bury, the pain will be felt through­out the coun­try be­cause peo­ple have been dragged down to Can­ter­bury and it’s left holes up here in the Waikato and else­where.’’

Mr Fe­gan said he hoped Niwa’s pre­dic­tion of a mild win­ter was borne out. ‘‘There’s a bet­ter chance of the peo­ple who have taken two steps in­stead of one get­ting through in one piece if it’s an easy win­ter.’’

Mr Fe­gan said re­cruit­ing from over­seas was still hap­pen­ing but not at the se­nior level.

‘‘The re­al­ity is we are the best peo­ple at con­vert­ing grass to milk. Peo­ple from over­seas can­not come straight into man­age­ment po­si­tions. They may be fan­tas­tic with an­i­mal health and all that but they don’t have the grass man­age­ment skills. They have to come in at a mid-level as­sis­tant herd man­ager or herd man­ager level.’’

Mr Fe­gan said the trend for farm own­ers to shift from sharemilk­ing ar­range­ments to eq­uity and con­tract milk­ing ar­range­ments started about eight years ago.

Rea­sons in­clude the in­crease in cor­po­rate farm own­er­ship, which tends to favour man­agers or con­tract milk­ers over 50-50 sharemilk­ers, he said. Also, some owner­op­er­a­tors are be­ing forced back into own­ing and milk­ing their own cows be­cause of the eco­nomic cli­mate. In these cases, they are look­ing at eq­uity ar­range­ments or con­tract milk­ers rather than 50-50 sharemilk­ers.

Sharemilk­ers them­selves are also choos­ing to move away from vari­able or­der (also known as lower or­der) ar­range­ments and are tak­ing up con­tract milk­ing to re­duce their busi­ness risk, Mr Fe­gan said.

Vari­able or­der sharemilk­ers are paid a per­cent­age of the milk cheque, based on how much milk they pro­duce and at what price.

Con­tract milk­ers are paid purely on how much milk they pro­duce (cents a kilo­gram of milk­solids) with no milk price com­po­nent.

‘‘Philo­soph­i­cally, I think con­tract milk­ing is a bet­ter place for them to be be­cause they don’t have any op­por­tu­nity to in­flu­ence the price of milk so why should they take the risk on price?

‘‘It takes some volatil­ity out of their in­come, there­fore it is a bet­ter and safer place be­cause we can pre­dict pro­duc­tion a lot closer than we can pre­dict pro­duc­tion and price.’’

Mr Fe­gan, whose com­pany is Waikato based but op­er­ates na­tion­wide, said the trend to­wards con­tract milk­ing and eq­uity ar­range­ments was typ­i­cal of the whole coun­try.

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