Strong leadership a key to success
‘‘The big benefit for us is that because we are in such a cluster, we can meet face-to-face. ’’ Nick Hume
Strong leadership has been critical to the success of Wairarapa Moana Incorporation.
Led by chairman Kingi Smiler, WMI is owned by 3500 shareholders and is governed by a committee of management.
What this committee lacked in farming expertise, it made up for in good governance practice, general manager Nick Hume says.
As well as WMI, the business supports and funds Wairarapa Moana Trust, which awards scholarships and grants to its members.
There has been strong leadership from WMI’S board.
Before Smiler became chairman, WMI’S farms needed a lot of work.
There had been significant expenditure on new milking sheds and yards, effluent ponds, new staff housing and amalgamations to improve the farms.
Ultimately, WMI wants to be fully self contained. This season, the 12 farms are run by nine managers and three sharemilkers, who will be replaced by managers after their contracts expire.
WMI is a founding member of Miraka, owning just over 32 per cent of the processing company which is located north of Taupo. Hume says the two companies possessed similar vision and values.
‘‘The board developed a strategic plan five years ago and part of it was to partake in the value chain, and not just be a farm that receives a commodity but to add value all of the way along and bank on that value.’’
That strategic plan was based on WMI’S need to protect, enhance and grow its asset base, be an industry leader, pay a dividend to its shareholders and act in a way that encourages shareholder participation and gives them pride in their asset.
There were individual strategies around each of these aspects, he said.
‘‘One of these strategies will be in what we do with Healthy Rivers [Plan for Change]. We have always said we want to be a leader, and to be recognised as an industry leader.’’
Beneath Hume are two operations managers, David March who oversees the nine managed farms and Phil Mckinnon who is in charge of the sharemilked and support farms.
Each farm has an individual business plan and key performance indicators.
While the farms collectively are run under a similar best practice policy, there is also flexibility to reflect each one’s special circumstances.
The managers’ autonomy allows them to formulate their own way of achieving the farm’s business plan.
WMI’S managers and sharemilkers meet every 10 days when data from all of the farms is submitted and discussed. The managers and sharemilkers also outline the farm’s current situation. Having that data lets Hume know if any of the farms are in trouble and need assistance.
‘‘The big benefit for us is that because we are in such a cluster, we can meet face-to-face. The guys know each other well and they are all facing similar problems.’’
The dairy herd consists of 10,500 milking cows spread across the farms, ranging from 650 to1200 cows per farm. Production on the System 3 farms averaged 4.3 million kilograms of milk solids over the past three to four seasons, with 10-20 per cent of the feed imported.
Three years ago WMI’S committee decided to de-intensify from a system 4-5. The farms all sit on light, brown pumice soils that grow between 11 and 14 tonnes of dry matter a year. The stocking rate is 2.5-3 cows a hectare.
At that stage, the payout forecast was still high, but WMI expected the milk price would drop. It wanted its business to be economically sustainable over the long term but to be flexible for when the payout lifted, Hume said.
‘‘We felt that a lower cost structure was going to be a key driver of that.
‘‘It means that if you are having a very good payout year, you have the opportunity to bring in more feed through the gate to capitalise on it, but if you set your system up to be at the top end of it, it’s almost impossible to turn it off once the payout crashes.’’
If the milk price fell further, WMI had the option of moving to an even lower input system, which they had done to help get through the slump in milk price.
Hume said the principles of dealing with a low payout were the same for WMI as for any farmer.
‘‘You just have to think big it’s as simple as that. But some people do struggle to think big.’’
Following existing farming policies well is also key during the current payout, so they can benchmark across their farms and see which ones can be improved.
Wairarapa Moana Incorporation general manager Nick Hume says that having a robust recruitment policy helps the South Waikato farming business get and retain top staff.