NZ Dairy Summer 2021

| 7 nzdairy DAIRY PEOPLE » Kiwitahi Pastoral Succession planning lures brothers back Virginia Wright While Jason and Carrigan Trower both grew up on the home farm in Kiwitahi, a small district between Morrinsville and Matamata, they were both in their forties, with well-established careers off-farm, when the family succession plan drew them back. Five years ago the decision was made that Chris and Liz Trower, now in their 70’s, would continue to live on the home farm while leasing it to the boys, while at the same time the large-scale dairy-farming business they had built up over the years would move into Jason and Carrigan’s ownership under the name Kiwitahi Pastoral. Carrigan is Director and Head of Finance while Jason is Executive Chairman. Jason’s the first to admit that after decades working outside farming he and his brother had a lot of upskilling to do. They brought in a farm consultant and a team from PWC to analyse all the different components of the farming business from a straight profitability point of view, and with an eye to sustainability. “It was a great opportunity to analyse without emotion what we thought was the right model for a business of this size, before we made decisions about the company structure” says Jason. It was a multi-million dollar transaction with a lot of involvement from the bank and they wanted to bring a modern lens to a long-standing family business. With the help of their business advisers they rationalized every aspect of what they were doing. For example, instead of money being spent on the repairs and maintenance of existing farm machinery they put it all on the market and bought new, including eight tractors and four feed-outs; stocking ratios went down as did the use of supplements and, perhaps most significantly, the dairy farm down in Mahia on the East Coast which wasn’t producing enough for their liking was sold off leaving four farms in the business instead of five. “The PWC guys helped us understand where we were out of kilter with normal, modern farming practice,” says Jason. Jason started spending 85 to 90 per cent of his time on farm business, rather than in the IT business he’d built up over many years. Luckily he’d already stepped back into a directorship role before the farming opportunity came along. He’s the first to acknowledge that a pivotal decision was to employ Duncan Eversen “He’s an absolutely magnificent guy who came on as our operations manager and for the last four years he’s helped us achieve what we wanted, which was to come into line somewhere between 25 per cent and 75 per cent of what was happening on all the other comparable dairy farms in terms of outgoings and profitability, and I’m really pleased to tell you that we’re doing even better than that,” says Jason. Having come into the dairy industry from the world of IT, which is driven solely by commercial imperatives and the hard-core competition that goes with it, Jason feels strongly that New Zealand farmers are extremely lucky with the support network they have around them with companies like Dairy NZ, Ag-Research, LIC, Fonterra, Balance, Ravensdown and the list goes on. “It doesn’t matter who they are, all of these suppliers, and many of them are co-operatives, they always have our best interests at heart, even if some of their decision-making hasn’t been the best at times. “It’s very different when you engage suppliers in the commercial world where there isn’t the same industry ownership. These guys all understand that they’re an integral part of our industry. We’re so lucky to have that sense of ownership that goes with the co-operative structure,” says Jason. The other strong view which he attributes to his commercial background is to do with New Zealand’s place in the international marketplace and sustainability. “Most dairy farmers engagement with the process of selling a milk product in China or anywhere else in the world ends when they press the washdown button after milking. It’s the co-operatives that do the rest. In my experience it’s really hard to sell product to customers,” says Jason with conviction. “They’ve really got to want to buy from you and there’s got to be an edge that makes you a stronger value proposition than anyone else, and we have that with New Zealand dairy products. “We have a premium in the global marketplace but to keep that we have to keep moving ahead of everybody else. It’s no good sitting back and going ‘well they don’t do this in Europe or don’t do this in Australia.’ If we want to keep that premium it’s really important that we remain ahead of the rest of the world in sustainable products.” Jason’s the first to admit that there’s no point in crippling the farmer but he gets frustrated at farmers who are reluctant to change because they don’t see the importance of New Zealand staying ahead of the sustainable game. He uses slow-release nitrogen as an example of a win-win for the environment and the farmer, and Kiwitahi Pastoral’s steady return to pasturebased farming and phasing down of palm kernel as another. “Regardless of your views on PKE customers don’t like it and they don’t want us using it therefore we have to look at other options,” says Jason. “We’ve brought our costs down by $2.00 to $2.50 per kg of milk solids by concentrating on doing pasture better, and it’s dropping every year. This year we did 585,000 kilograms of milk solids with just under 2000 cows, and that’s keeping sustainability at the forefront of what we do.” Kiwitahi Pastoral is a four-farm business milking just under 2000 cows. Qubik are proud to take care of the dairy shed requirements for Kiwitahi Pastoral proudlylocally ownedandoperated 100% kiwi owneD Morrinsville ∙ PHONE 07 889 5059 Proud to support Kiwitahi Pastoral