Planning, fine tuning take sharemilkers to the fore

They were praised by the Dairy Industry Award judges for driving profitability despite the low payout, their exceptional on-farm presentation and detailed analysis of their farm business.

Although “in shock” the morning after winning the top honour at the industry awards, it was obvious to Dairy News that the couple are meticulous planners of every aspect of their business. Yet they have an overall strategy “to be flexible and to adapt”. They are 50% sharemilking 550 cows on the farm of Norm and Sandra Williamson at Culverden in Canterbury. 

“We want to run our operation so we can take advantage of a high payout and still make money in a low payout,” Justin says. “Every year, even every month, we are slightly changing our systems. To maximise a higher or lower payout, you can’t just stick to one system. You’ve got to be flexible; that is what farming is about.”

The couple, in their late 20s, both brought up on dairy farms in Te Aroha, were dairy farming in Waikato when they researched the best area to move to grow their business.

“We moved over a 1000km from Waikato to the South Island to take on the opportunity that would help us achieve our goals,” says Melissa.  “We looked at lots of things when we chose the region. The area is the highest producing per cow and per hectare and for sharemilkers that is a good return on investment.”

They looked at the contract and the farm owners. “Norm is a legend in the area. He has a very good reputation and he has lived up to it – he has been awesome,” says Melissa.

The Slatterys, who have one son Ryan, aged 13 months, aim to buy a 100ha dairy farm in five years. “We are working with the conditions we’ve got to try achieve our goal. It’s a bit slow at the moment (with the low payout) but it’s a big picture thing,” says Melissa.

Entering the dairy awards was “absolutely great”.  With the merit awards evenly distributed, Justin and Melissa say it seemed on the night to be “anyone’s game” to win the top prize. To bring it home is “unreal”, says Justin. “I didn’t lose my smile all night,” says Melissa.

The awards helped them better understand their operation. “Just the whole process of analysing our business – going through it with a fine toothed comb. There are definitely areas we needed to improve on and we’ve seen our strengths and our weaknesses,” says Justin.

With moving to a new area Melissa says the awards made them “really analyse the year and what’s happened and hopefully it will give us a step forward for next season as well. We’ve got a greater level of detailed knowledge of what’s gone on.”

But the Slatterys say they would not have taken the top prize without their staff and the farm owners. “It is not just about us, it is about the whole team,” they both say. 

And they loved being with the other finalists for four days before awards night. “The dairy industry is great,” says Justin. “Everyone is comparing and open, and everyone learns off each other. If you were in the city and had the same sort of business you just about wouldn’t talk to your opposition. That is where I think the dairy industry is great. Everyone is open, everyone is in the same boat. You couldn’t get a better industry.”

Melissa: “The other contestants have been awesome. You have so much in common with them and they are all passionate about the industry. It is all positive – there’s been no negativity at all. We have really enjoyed that.”

When he left school Justin did an engineering apprenticeship, working four years at Wallace Meats in Waikato. After that he went into the dairy industry working on his father’s 180-cow farm in Te Aroha. “Since then we haven’t looked back; I’ve been in the dairy industry since I was 20.”

Melissa is a Bachelor of Business Management and a chartered accountant, still working part-time off the farm, but also deeply involved in the farm business.

Their overall business strategy is “to dairy farm innovatively and sustainably, to be leaders in our industry while enjoying the journey and providing a balanced lifestyle for our family”.

But they break the strategy down into various categories such wealth creation, self-development, staff, health and safety, pasture and feeding management. “We have short, medium and long term goals for all those areas,” says Melissa.

“There are a lot of key performance indicators in those areas with what we are trying to achieve. We’ve got actions and measures to see what we will do, how we will do it and how we will measure it.”

But with all those plans in place, it still matters to be flexible, adaptable, and learning and growing.

Justin says they keep up with all the rules and regulations and use that knowledge to their advantage. “You know what’s going on and what’s happening in the area and the regions. We hope to see opportunities, whereas other people would see a negative.” 

Melissa says it is a matter of using resources efficiently which can also have financial benefits.  Obviously grass is a major resource. “Pasture utilisation is always a key driver of profitability. It’s monitored so we think of strategies for improving it to achieve those high level targets.” 

With the low payout they looked at a pie graph of their costs and picked on reducing the biggest ones to make the most difference. “Wintering cost was a big one and we had a plan for that. There are other costs you can’t compromise on such as wages and staff. We have a great team of two fulltime staff. We don’t want to compromise in that area. They do a fantastic job. They are in with our strategy and want to help us achieve our goals.”

Justin says they use as much grass as possible and Melissa says they reduced the overall cents per kg of feed brought in by using more palm kernel than grass or maize silage.  Palm kernel is 17c per kgDM cheaper than grass and maize silage down the throat after wastage. Bringing in cheaper feed is saving them about $82,000 over two years.

They have also been hit by the dry this year although the Hurunui irrigation scheme served them well. “But the dryland is not looking good and it’s put a lot of pressure on the winter grazing,” says Justin. “A lot of dryland winter crops haven’t yielded properly so that has been the challenge for us. Where we were going hasn’t come to the proper yield so we have had to chop and change and be flexible. Our winter grazing is going to three different places now instead of one.” 

Melissa says they put a paddock into rape early as an insurance policy and will winter some cows on farm this year. “That has worked out well – just reacting early and making provisions for something that has not gone according to plan.”