Project builds young farmer's skills

Project builds young farmer's skills

Business Management
EQUITY PARTNERSHIP: Noel and Evan Campbell are part of an equity partnership that operate two farms.

EQUITY PARTNERSHIP: Noel and Evan Campbell are part of an equity partnership that operate two farms.

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An opportunity to return to the family farm after working abroad, combined with his involvement in the Dairy Farm Monitor Project (DFMP), has seen Evan Campbell immerse himself in the management and business side of dairy farming.

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An opportunity to return to the family farm after working abroad, combined with his involvement in the Dairy Farm Monitor Project (DFMP), has seen Evan Campbell immerse himself in the management and business side of dairy farming.

After completing a double degree in engineering and commerce, Evan moved to Saudi Arabia to work in the oil and gas industry, which he did for five years before one of his parents' long-term employees took maternity leave from their Yannathan, Vic, dairy farm.

What was originally planned to be a six-month stint back on the farm is now a five-year stint and counting, with Evan's responsibilities growing over that time.

This led to Evan, his parents Noel and Ann and sharefarmers Dean and Bek Turner taking over a lease property two years ago, in addition to the home farm.

"When I returned to the farm, I spent three years working for Dean and Bek," Evan said.

"During that time, I was learning more and growing in responsibility, but the home farm wasn't big enough for me to take a managerial role, so we wanted to figure out a way we could all grow together.

"I stuck around because I wanted to go into a management position and have more responsibility to challenge myself, as well as being closer to family and friends.

There are a lot of levers to pull when you're managing a small business it's a lot more complex than milking cows and growing grass. You need a whole suite of skills in order to be successful.

"That's when the opportunity came up for us to take over the lease property nearby, which we are doing through a three-way equity partnership between myself, my parents and Dean and Bek."

The equity partnership Redan Partners is set up so all parties own cattle on the lease property and machinery is shared with the home farm across the road.

Noel and Ann started off as majority partners in the partnership and each year Evan and Dean and Bek increase their share by 1-2pc, while Noel and Ann's share decreases accordingly.

Evan manages the lease farm, which is now half-way through a four-year term.

It is there they milk 390 crossbred cows on 174 hectares, which is all dryland on a perennial pasture base with some annual summer cropping as well, such as turnips and chicory.

The lease property is also one of Dairy Australia's GippsDairy Focus Farms for Gippsland, which the equity partnership applied to be part of because of its unusual structure.

"Most farms are owner-operator enterprises, but being a lease farm in an equity partnership changes the decision-making process quite a bit," Evan said.

It was this involvement as a Focus Farm that saw Redan Partners become part of the Victorian DFMP, funded by the Victorian Government and Dairy Australia.

The DFMP provides an analysis of 250 farms across Australia 75 in Victoria and informs decision making and prioritisation by key stakeholders across the industry including Dairy Australia itself, government bodies and other stakeholders in the industry.

The information enables dairy farmers to compare their farm performance and identify areas for improvement.

Evan's commerce degree means he has always had a strong interest in crunching numbers and helped Noel and Ann with bookwork when he returned to work on the farm.

Before becoming part of the DFMP, Evan had done some farm business analysis training run by Dairy Australia, which taught him how to manage data and put it into DairyBase, a web-based tool that enables dairy farmers to measure and compare their farm business performance over time.

"I think being involved with the DFMP definitely keeps you accountable and encourages you to have good record keeping," Evan said.

"The benefit of that is in decision making. Rather than going off a gut feeling, it gives you data to fall back on and help inform those decisions.

"Dairy farm businesses have become quite complex, so having good data out there for the wider industry to access is a good thing.

"From our own perspective with a three-way equity partnership, that model wouldn't work if we didn't have really good data behind us which helped inform our decisions."

Data collected through the DFMP is stored on DairyBase, which Evan uses to benchmark the lease farm's performance against other farms in Gippsland.

"I can go into DairyBase and pull up previous years' data and customise reports to see what has happened year on year," Evan said.

"It also enables us to compare ourselves against the top 25pc of dairy farms in Gippsland as well as other farms in the area.

"However, the key thing with that is not to get caught up in the headline data figures and comparing yourself too much to others.

"DairyBase is most useful when you use it as a tool to track your own progress and compare yourself year on year."

As someone fairly new to the industry, Evan said his experience with DFMP, the Focus Farm and DairyBase thus far has been beneficial.

"If you plan to be in the dairy industry for the long haul then it can't be treated as hobby," he said.

"You have to treat it like a business and run it like a business. These tools are available to all dairy farmers at no cost and we pay the levy so we should be using them, because that's what they're there for."

Dairy Australia's Dairy Farm Monitor Project (DFMP) is providing dairy farmers across Australia with high-quality data to help them make more informed farm business decisions.

Originating in Victoria in the 2006-07 financial year, the DFMP has grown to encompass all dairy regions across Australia. Dairy Australia farm business data lead Helen Quinn said the DFMP aimed to provide farmers and industry with detailed physical and financial data of dairy farms in each state and dairy region.

"The value in the DFMP for farmers is that they are able to use the data generated by the project in DairyBase to compare their own farm business performance to benchmark data," she said.

"If farmers look at their own data, it gives them the opportunity to better respond to the challenges and opportunities in the industry.

"As an industry, it's terrific to have longitudinal data. For Victoria, we have data dating back for more than 10 years, while all other dairy regions have at least five years of data.

"Given the volatility in the dairy industry, it's important to look at historic data."

DFMP provides quality data

The recently released Victorian report for the 2018-19 DFMP showed mixed results for the state.

While profits were mixed across Victoria's dairy regions, the project reported average earnings before interest and tax were $85,000 in 2018-19, half of the level set the year before.

The average milk price across the DMFP improved 6 per cent to $6.13 a kilogram milk solids compared with the previous year. However, the dry conditions and higher irrigation water, concentrates and fodder prices led to a 20pc increase in variable costs. This meant the average net farm income, including interest and lease costs, across the state fell to -$24,000, the fourth lowest in the 13 years of the project.

Reports for other dairy regions across Australia will be available by December.

To help farmers understand the data generated by DFMP, Dairy Australia runs several farm business management and capability programs, including Dairy Farm Business Analysis, Farm Business Fundamentals and a new pilot project called Our Farm Our Plan.

The DFMP and DairyBase is embedded in this training to help participants better understand the data being generated.

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