Equity partnership brings opportunity
Entering into an equity partnership has created a pathway for Hadleigh and Jolene Germann to grow in the dairy industry, but it was their involvement in Young Farmers that really started ball rolling.
The couple moved to Southland from Waikato in 2011, and through Young Farmers Southland met Simon and Mo (Monique) Topham and Simon’s parents, Alan and Jeanette Topham. The family are now their equity partners in Fast Track Dairies.
“We found with Young Farmers, being new people to a region, it was a great way to get to know some of the locals,” Hadleigh says.
While preparing for a Dairy Industry Award ﬁve years ago, the Germanns practiced their management presentation with Simon and Mo as their audience.
“I think that made it really clear to them where we were ﬁnancially, what some of our goals were and how we operated a business.” They became ﬁnalists in the awards, and last year Joelene was also a ﬁnalist in Fonterra Dairy Woman of the Year.
The couple are now in their third season on Fast Track Dairies 197 hectare farm in Aparima, Western Southland, after previously contract milking for neighbouring Westﬁeld Farms. To step up from contracting milking to the partnership, Hadleigh says they “saved hard and traded stock”.
“We felt that money in the bank gave us options and in this case it wasn’t a bad position to be in.” He says a big part of the attraction of the equity partnership was Alan and Jeanette’s forward thinking.
“They use the phrase “cofﬁns don’t have roof racks”, meaning they can’t take the farm with them when they die, so they were quite happy to do what they could to help young New Zealanders get into land ownership rather than seeing it sold to an overseas corporate.” “That attitude really sold it for us.”
In addition to being shareholders in Fast Track Dairies, which owns the land, livestock and Fonterra shares, the Germann’s are employed as lower order sharemilkers. Finding the right people to enter into a partnership with was an important key, Hadleigh says.
One of the strengths of their partnership has been that, even when the farmgate payout plummeted, each shareholder has business interests outside of the farm.
Hadleigh is Federated Farmers Southland dairy vice chairman and Jolene, who holds doctorate in the biochemistry of the clover root weevil, is a partner in Agribusiness Consultants.
Hadleigh says farmers in the province have been getting to grips with Environment Southland’s proposed Water and Land Plan, which the regulator says seeks to address activities that are known to have a signiﬁcant effect on water quality, such as land use intensiﬁcation, wintering and stock exclusion from waterways. Submissions were made to the plan September last year.
Hadleigh agrees there is often some resistance to any new regulations, but farmers are generally accepting as long as they are presented with robust science and have sufﬁcient input.
“We don’t like to be taken to with a stick I suppose. It’s much better if councils can get alongside and work with us.
“There are probably some frustrations around still understanding what the problem is and what we need to do to ﬁx it, because I think by nature farmers are problem solvers.”
Fast Track Dairies produced 235,000kgMS from 520 cows last season. The overall aim is to produce 260,000kgMS with consented numbers of 580 cows, using a low to medium input system.