Strong lead­er­ship a key to suc­cess

South Waikato News - - What’s On - GER­ALD PIDDOCK

‘‘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.

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