Waikato dairyman moving up by changing down
It takes more than sharp cost analysis to realise it’s time for a change, writes Andrea Fox.
Uplifting sights were in short supply when Waikato’s Garry Reymer took possession of a failing, rundown Kaipaki dairy farm, but seeing a Fonterra tanker roll up the track instead of Open Country Dairy’s was a real heartwarmer.
‘‘I was very pleased to bring that farm back to Fonterra,’’ recalls the Cambridge dairyman who with wife Marie-Jose went on to rehabilitate that 2013 purchase and dismantle its System 5 structure in favour of a System 2 operation.
Today the 84 hectare (80ha effective) farm, which adjoins the Waikato River, stars in publicity for Fonterra’s environmental protection initiatives.
The couple’s decision to extend their dairying activity outside their picturesque 96ha (87ha effective) home farm on Cambridge Rd was strategic like most of their investments, says Reymer. But the Kaipaki property’s sale by tender in the middle of a season was also a rare opportunity. Like the Reymers’ home farm, it’s in blue chip Waikato dairying country and considering all the circumstances, the couple reckoned they were in with a good chance for a reasonable price.
‘‘There were a whole lot of challenges with it. It was rundown, it was for sale as a going-concern mid-season and it was environmentally hugely underperforming,’’ says Reymer.
A particular attraction was the lease over 50ha of the property, requiring the aspiring purchaser to re-establish trust with the leasor.
The new farm, 5 kilometres from the home farm, was an autumn-calving operation with a winter milk contract, which the spring-calving Reymers had no interest in continuing.
‘‘When we scanned the cows, 51 per cent were empty but it was a good herd,’’ says Reymer.’’ The 26-bail dairy shed was in good order.
Four years and extensive environmental protection and upgrade works later, the Kaipaki farm milks 270, mainly friesian, cows and is on track to produce 110,000kg-plus this season despite the rough spring. Last season it did 102,000kg. Rather than lose his Kaipaki farm managers Michael and Sarah Grant, Reymer this season employed them as a contract milker. He says the farm is still ‘‘massively’’ underperforming and believes it can achieve 120,000kg.
Kaipaki’s best ever performance under previous ownership was 119,000kg. Reymer says the farm was an ‘‘incredibly intensive System 5-plus’’ when he and his wife bought it, with 60ha under crops which was smartly returned to permanent pasture.
He’d like to think both herds are in the country’s top 20 per cent – for BW and production.
That said, production on both farms ‘‘isn’t that flash’’.
And therein lies a story of big change in the Reymer farming business, with more unfolding.
The Cambridge Rd home farm, which also milks 270, mostly friesian, cows at peak, sent just under 109,000kg to the factory last season. The best production this farm has done is 146,000kg – but that was with more cows and under System 4.
Kaipaki isn’t the only Reymer farm to have had a big downshift in farming systems.
The home farm, bought by the Reymers in 1993, was until around two years ago feeding grain and PKE through an in-shed feed system and wintering-off stock.
Today it is System 2 and next season will also be operated by a contract milker. Reymer is stepping back. He’s been easing out for a while and says it’s showing.
‘‘I believe you can lose the edge when you’re not there every day bringing the cows in and making every little decision. It’s my fault, no-one else’s. It frustrates me that I’m missing that edge and it’s time I gave someone else more control who is going to be there to make all those little decisions and do those things properly.
‘‘I’m competitive by nature and if I can’t give 100 per cent I feel I should step back. When I see us slipping out of it I find it a frustration.’’
He offered the contract milker job to his herd manager of four years Rob Hapi – ‘‘a top guy’’ – but Hapi enjoys that position, he says.
Meanwhile the home farm’s transition continues. It hasn’t been easy on the ego, says Reymer.
‘‘We’ve done two years now with no grain going through the shed. I haven’t sold the feed system yet - I’m not brave enough - but I’m getting there.
‘‘I didn’t have a feed pad or bunkers. I just did it around grain and I was getting some results and because I was trying to keep the labour (cost) down, I put in the inshed feed system and some automation around that.
‘‘Now I’m going down a different road. It was really difficult getting a margin out of high cost grains.
‘‘When you want to change back it’s almost as hard (as changing up). It’s definitely not good for the ego to see milk production dropping and your Fonterra app reading going down.
‘‘But it’s about profitability versus productivity.’’
Today, like the Kaipaki farm cows, the home farm herd is fed grass and ‘‘a bit’’ of PKE. There’s no grazing off-farm except for replacement heifers which go from their respective farms to grazing at Pukeatua and Pirongia between 10 and 22 months of age. Reymer tries to run the two farms as separate businesses.
A big spreadsheet fan, he concluded about six years ago after relentlessly breaking down his System 4 costs that there was no money to be made feeding grain – for his farm anyway.
‘‘I only made money probably one year out of 15 from feeding when you took all the costs into account and broke down the whole lot.’’
Until 2013 and the Kaipaki farm purchase, the Reymers spent $280,000 to $290,000 most years on bought-in grain feed. Last year for the two farms, the total feed bill was $190,000, including heifer grazing.
Reymer says he’s sure there’s a place for feeding, just not on his farms.
‘‘I’ve done 300 cows on my own with no staff but I was pretty well shot at the end of the season. But it can be done for a short time. I’m not saying that’s a sustainable model any more than I consider System 5 sustainable.’’
One of 10 children, Reymer went to Te Awamutu College to eat his lunch and recalls being much more keen on machinery and driving tractors – an interest inspired by his father’s sideline contracting business – than milking cows.
One day he told his Dad he’d like to give dairy farming a crack and was given the job of running the family farm. To everyone’s surprise, he enjoyed it so the family bought a bigger farm at Ohaupo.
Reymer farmed there with his late brother John before striking out as a sharemilker around the Waikato, then with wife MarieJose, bought 50ha at Putaruru, milking 170 cows.
The couple’s decision to buy the Cambridge Rd property – then 75ha – was a financial stretch but with urbanisation pressing in has paid off in capital value gain. At the time their move north from Putaruru was against the tide of south-heading dairy farmers.
‘‘This land has become more and more valuable. It’s fertile, flat land and very productive. I could never farm steep country again. It’s easy to farm.’’
Reymer reckons the location pluses which attracted his family also helps lure quality staff in a tightening and competitive labour market.
‘‘They want some size but also want good facilities, sports grounds, education for their children, and they don’t want to be driving hours to get to Saturday footie or netball or whatever. I think we are seeing people picking and choosing more.’’
Reymer says he may be surrendering the daily reins to contract milkers but they won’t be getting rid of him that easily.
‘‘It’ll be a long time before I stop rearing calves. I really love it down there at spring time. It’s a buzz. I just love being part of that whole scene so I’ll keep doing that.’’