Smart planning and right advice will see you through

Reporter Gerald Piddock talks to Hamilton dairy farmer Roger Duff, whose farm is part of a nationwide campaign to help dairy farmers navigate the challenges of the lowpayout year.

This is not the first low-payout year for Roger Duff.

He and wife Kathy have been in the industry for 14 years in an equity partnership with Craig and Jo Young and are drawing on all their experience to make smart decisions, looking closely at on-farm efficiencies and tapping into their industry networks.

The two couples run a low-cost farming system just south of Hamilton, milking 400 cows on 128 hectares. Roger is hands-on, on farm, while Craig milks in the morning and spends the rest of the day in his job as a rural banker.

The two families are part of dairy industry body DairyNZ’s Tactics for Tight Times campaign and will be sharing their knowledge at a series of field days starting this month on their farm.

The campaign includes 70 farmers from about 30 farms nationwide, including six farms in Waikato.

Duff said the low payout was comparable to other lean years the industry had experienced. His initial response to the low milk price was to defer any unnecessary capital expenditure this season.

‘‘Money will be spent on a needs-only basis and ‘wants’ will be postponed. A second travelling irrigator was on the wishlist this season, but we’ve decided we can defer that to next year.’’

All operation costs such as supplements, as well as service costs of rural professionals, were reviewed to make sure they were paying a rate that reflected the payout.

‘‘In some cases rates have crept up over the last couple of years as the milk price has increased so there was some room to review these,’’ he said.

They have also focused on ensuring the farm ran efficiently in all areas. This in some cases would reduce costs.

‘‘We didn’t add any spring fertiliser, but continued with nitrogen application. Soil tests are done with our fertiliser rep who agreed we could go without it this spring.

‘‘We’ll be looking at the situation again in autumn and may use the same approach.’’

The farm has an existing supplement contract for palm kernel and maize and they have decided not to purchase any additional supplement to push production levels like they would have in a season with a higher milk price.

‘‘If it gets dry and extra feed is needed, that’s when we’ll look at the cost-benefit and whether to buy in supplement and keep milking or to dry off.’’

So far the season had gone well from a production standpoint although the dry weather was starting to concern him.

‘‘We’re still on a target for production of 150,000kg milk solids, but that could change very quickly in the next fortnight or so as it’s drying up so quick.’’ His advice for young farmers starting out in the industry was to attend DairyNZ discussion groups.

‘‘I got a lot out of them when I first went into dairy farming. They provide an opportunity to think things through and a chance to review decisions and get advice and ideas from other farmers.

‘‘Particularly when you’re new, it’s good to go along and hear when you are on the right track to give you confidence in your decisions. Or if you’re stuck on something, there’s plenty of knowledge there to tap into.’’

He also recommended using rural professionals for advice and support.

‘‘I discussed things with my farm consultant a lot when first starting out. They help you put the stake in the

Hamilton dairy farmer Roger Duff says there is no silver bullet to surviving a low-payout year but a commonsense approach involving communicating with bankers and advisers helps. ground and tell you the steps you need to follow to meet certain goals. Even now we still check in with our farm consultant to make sure we are on the right track.’’

Developing a good relationship with their rural banker was also beneficial and could help remove financial pressure.

‘‘Keep them up to date and informed with what’s happening on your farm.

‘‘Bankers are proactive at working with their clients.’’

They have also started using DairyBase. This is a DairyNZ tool used to help farmers benchmark their business performance.

This would be another tool he could use to help make informed business decisions.

‘‘It’s all commonsense stuff and I would suggest that 95 per cent of farmers have already done that sort of stuff.’’

A field day will be held on Duff’s and Young’s farm on March 5. The event will provide farmers with the economic outlook for dairy and cost-effective tactics tailored to the conditions of the area, discussing what has happened in the past and feeding that into plans for the coming season.

gerald.piddock@fairfaxmedia.co.nz