How to grow Aussie dairy: vertical and horizontal integration

In last week’s post about what it will take to encourage dairy farmers to grow, I promised to follow up with some ideas. The first is a guest post from Ian Macallan, a project strategist and business architect who has operated in the Asia Pacific for over 30 years across a number of industries including dairy.

Whilst 97 per cent of Australian dairy farms are family-owned, there are smatterings of “corporate farming” that bring together large parcels of land and cows.

If left unchecked, this type of pure farm aggregation could swing to the extreme of looking like feudal farming, leaving no capacity for family dairy farming. These corporate farms are also still vulnerable to milk price fluctuations.
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From one farmer to the next

I have no idea whether Zoe and Alex will be farmers but I’m quite sure my father was surprised when I fought to keep the farm in the family after he became gravely ill.

I’d been given a great education and had built a thriving two-person little business that fitted in perfectly with a new baby. He’d decided I was better off not farming and told the lawyer drafting his will that he was going to sell the farm. The thing is, rationally, he was right: I was much better off financially than I am now or am likely to be as a farmer. What Dad had forgotten to factor in was the call of the land.

Life on the land gets in your blood and I’d always wanted – no, expected – to come back to the farm when there was room for me.

Now that I am here and have children of my own growing up on the farm, I sometimes wonder whether they will feel the same pull. Maybe they’ll simply look back happily on a wonderfully free, healthy childhood and move on. Maybe they’ll want to farm. I hope they have the choice.

I tuck little bits of money into share portfolios for Zoe and Alex here and there to build an understanding of the way money works and nest eggs that will free them to hatch their dreams one day. That’s the big picture. Then there’s the little things, like creating digital farm maps and records.

The importance of maps was hammered home just the other day, when I got a call from Wayne, our sowing contractor, just as I was feeding Alex his dinner and while Zoe and my Wayne were out at a piano lesson. The plough had located (chewed up, that is) a water pipe I didn’t even know existed.

Ploughed up pipe

Agricultural archaeology

The water started off as a trickle but soon became a spectacular three-foot-high in-paddock fountain. The break was at the furthermost end of the paddock from the pump and I knew that more ploughing would only mean endless fountains unless I could find the start of the pipe. A hopeless situation, especially at 5.30pm.

In the end, I decided to pretend I was Dad. I stood at the break and looked north in the direction of the river pump. Decided an old blackwood tree on the bank of a gully would be a natural spot for Dad to have a joiner and went for a walk.

Pipe in the Gully

Thank you, Dad!

Dad was a little eccentric but I knew him well. Went to work with a garden saw to get to the joiner and voila, one end cap and some mumbled swearing later, all fixed!

Not a moment too soon

Not a moment too soon

Got back to the house just as the sun was setting and Alex was totally over it but the troughs filled, a quagmire was averted and I smiled a little smile for Dad.

Where is our farm? Where are we?

We’ve just hit our fourth anniversary of running the farm since Dad died and what a rollercoaster ride it’s been. Cockchafers, collapsing fences, drought, floods, a new water system, massive pasture renovations, the global financial crisis and a new baby as well as the loss of Wayne’s father.

The farm looks great. Matt, our farm consultant, visited on Monday and said that with the exception of a rapid yard wash system, we have all the “physicals” just about right. We should be jubilant but we’re too tired for any sort of celebration.

As opposed to the “physicals”, the “financials” are still tight and there’s no prospect of a holiday.

“When do I get to experience the farm lifestyle everyone talks about?” was Wayne’s question. “We don’t seem to be getting anywhere.”

Matt’s colleague, John Mulvany, has drawn up a hilarious (but serious) farmer lifecycle chart and we are firmly seated in the FCTF TAF section. As such, we’ve only had six days off in the last year and three of them were while I was in the labour ward!

We decided it was time to rewrite our Farm and Family Plan. Like any other family business, it’s impossible to separate the two. We’ll look at where we are now, what we’ve achieved and our targets for the next 18 months. Top of the list is one day off per month!

Why not have a whinge when we deserve it, after all?

On Tuesday, I was given the opportunity to have a really good cathartic whinge on Melbourne radio and I almost took it. The announcement of an increase in public transport fares prompted 774ABC radio host Mark Holden to ask for examples of what’s gotten cheaper.

The obvious answer is milk, of course! So I rang in and said consumers were getting a great deal on milk, which is at 1992 prices. He wanted to know whether farmers are doing it tough as a result. Now the answer to that question is complex and I wasn’t going to try to explain it all in five seconds so I said that, yes, one in three dairy farmers had left the land since deregulation but that Australians are among the world’s most efficient dairy farmers and that allowed us to deliver low prices. Now that’s a strange message, isn’t it?

It means that instead of whingeing about low prices, we can be incredibly proud of being able to deliver them. Most importantly, we can be incredibly proud of the shape we’re in: we haven’t succumbed to a factory farming model.

  • 98 per cent of Australian dairy farms are family farms rather than corporations
  • The average herd size is 220 (small enough to know every cow)
  • Our cows enjoy “cowness”, as Tammi Jonas would put it, free to roam the paddocks

In other words, our farming practices have become more and more professional without compromising the ethics that guide all the farming families I know: love of animals, love of land. We have a great story to tell and we should shout it from the rooftops!

Would I advise my kids to become farmers? Country Hour asks the question

Do farmers want their kids to be farmers? A Victorian parliamentary inquiry is looking at why young people don’t want to further their education in agricultural studies. Early submissions says farming parents are one of the greatest deterrents… Hear more on the Country Hour today, and tell us, would you advise your kids to get a career in farming?

In just a few minutes, ABC Radio’s Country Hour will ask the million-dollar question: if life is so good on the land, would you recommend farming to your children?

I would, so long as Zoe and Alex have a passion for animals and the land and don’t have expensive tastes. Farming is nothing if not exciting and challenging. On the other hand, it’s anything but lucrative, particularly if you’re still struggling with a large debt burden as many young farmers must.

Even if they decide to become farmers, I wouldn’t recommend ag studies. The tradition of many farming families is to “get another trade to fall back on first” and it’s wise, whether that trade is boiler making or journalism. It makes sense to learn from other workplaces, acquire fresh skills, make new circles of friends, establish an independent identity and to experience being an employee before you become a manager.

Perhaps even more importantly, second jobs for farmers are incredibly common and the average Australian dairy farming family makes about as much income off the farm as on it. Employment helps us survive the bad years and ride out cash flow droughts.

And, if the worst happens, there are always options.