Jerseyland Farms Report – September 2022
He who builds a farming enterprise on the Jersey breed builds wisely.
- THE JERSEY Symbol of New Zealand Dairy Economy 1940
I used this quote in my presentation to the Jersey Conference – it was a long time coming, and the initial discussion around JerseyNZ owning a farm had commenced well before my time in JerseyNZ, but thanks to a huge commitment from Mark Townshend, a group of supportive investors and good due diligence from JerseyNZ and JerseyAdvantage – Jerseyland Farms became a reality.
Looking back on the timeline gives some perspective of the project, and the ability to make things happen when there is a common goal, and a shared vision.
2021
18 March
Meeting between Jersey Advantage and JerseyNZ to discuss farm purchase proposal
Due Diligence and Finance Committee set up – Dairy Direct to report on farm
31 March
Advised of a counter-offer made on farm
26 April
Farm back on market
Announced intention to purchase farm at JerseyNZ Conference New Plymouth
30 April
Sale and Purchase agreement signed (with conditions)
5 May
Had $1.5 million pledged from private investors, $300,000 from JNZ and JA
12 May
Name for the joint venture decided.
14 May
Settlement delayed until June 15 – legal work required to set up Limited Partnership, arrange finance.
21 June
Deal completed
The governance group met, and put in place a management structure for the year ahead. The governance group comprises of Rodney Dobson, Ray Colebrook, Mark Townshend and myself.
Contract Milker Chris and Phillipa retained were as part of the purchase deal. This gave advantages due to their knowledge of the farm, and they are very good practical and tidy farmers. Whilst Rodney Dobson is from Southland, the board needed a hands-off approach, so employed Dairy Direct to supervise the farm. This involves regular visits – with Dairy Direct basically acting like the farm owners, providing guidance to the Contract Milkers, and reporting on progress to the board. Vicki Goodeve had this role from June to March, with Pete Atkin taking over from Vicki. Pete joins us following a few years in a similar role in America, and having farmed in the Waikato prior to that.
The administration is looked after by JerseyNZ – with accounts processed within Xero, and budgeting through Figured. The accountant firm engaged is CooperAitken
On-farm situation
At the time of writing in early June, the cows are dry, and all but 30 grazed off farm. Production ended up at 234,194 kgMS, which was 1.6 % behind last year, but ahead of the budget of 225,000 kgMS.
The farm cover is 1900 kgDM/ha, which was the target. Grazing off requires careful consideration of calving dates and feed. 300 cows are at Balfour and The Keys, 150 cows are walked down the road – these are the earlier calvers. 146 in-calf heifers are grazing at Waimate, having been purchased from Whangarei, Ngatea and Dunedin.
The yearlings are grazing at Tokanui.
A thorough consents process for effluent and water was undertaken by a consultant. This has been accepted by Southland Regional Council.
Finance
Jerseyland Farms has a bank loan from BNZ. It has 5 private investors – Baileys, Bococks, Colebrooks, Dobsons and Gibsons. JerseyNZ and JerseyAdvantage made equal contributions.
Financial Results
The financial results have been incredible – an investment is all about timing. There were a few issues with take over costs being higher than anticipated, but overall the running costs were well controlled, with production exceeding expectations and the milk payout reaching record levels. This has meant that there have been two dividend payment to all parties totalling $200,000. Once the accounts for the year are paid, the board will decide to reduce debt and perhaps purchase Fonterra Shares. The farm is on a 6 year contract, and currently has 1000 Fonterra shares.
The governance board is made up of a JerseyNZ member, a JerseyAdvantage member and two of the private investors.
Outlook for the new season
There are new contract milkers in place – Dyllan and Rachel Geerlings. They come with plenty of enthusiasm and are looking forward to improving the farm and working with the Jerseyland Farms Team.
Reporting will be improved through the use of Trev – this will help better inform investors and members of both JerseyNZ and Jersey Advantage.
The herd is getting golden as fast as we can – the board decided to breed into Jerseys, rather than sell more of the existing herd. The addition of 146 Jersey two year olds will help this, and a number of Friesian and crossbred calves were sold and replaced with Jerseys. The herd is in-calf to Jersey sires.
The success so far gives the board confidence that given the right circumstances further investment in dairy farming can be made.
The goal is for Jerseyland Farms to produce 500,000 kgMS. The company has moved from 40 to 50 % equity in just one year. When equity approaches 60% we will need to be ready to make the next move – this could happen as quickly as this one did.
This could not have happened without the support of those mentioned, but also the support of JerseyNZ members. I feel very privileged to have been given the responsibility to Chair this venture. It has been an incredible process, and one that all members of JerseyNZ can be justifiably proud of. Jerseyland Farms are looking forward to being able to welcome members to the farm in the future – possibly at next years conference.