Latest / Talking Dairy / The habits of high-performing farmers | Ep. 136

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The habits of high-performing farmers | Ep. 136 · Talking Dairy

• 0:01
  SPEAKER_02: George and welcome to Talking Dairy.
• 0:03
  SPEAKER_02: I'm your host Jack McGowan from DairyZ.
• 0:06
  SPEAKER_02: It's great to have you with us.
• 0:08
  SPEAKER_02: Two farms can operate very different systems and still get strong results.
• 0:13
  SPEAKER_02: So, what are the best operators doing differently?
• 0:16
  SPEAKER_02: Dairy and Z's Farm Systems Review looked closely at successful farm businesses across different regions and systems.
• 0:24
  SPEAKER_02: It uncovered some clear patterns in how these farmers think and respond when conditions change.
• 0:30
  SPEAKER_02: In this episode, we'll discuss what stood out, how those insights apply across different farm systems, and where you might find opportunities in your own farm business.
• 0:40
  SPEAKER_02: And to take us through the findings, I'm joined by DairyNZ Farm Systems Specialist Mark Spate and Farm Systems Manager Steve Vikes.
• 0:49
  SPEAKER_02: Tienokurua, welcome to Talking Dairy.
• 0:52
  SPEAKER_00: Thanks, Jack.
• 0:53
  SPEAKER_00: Good to see you, Jack.
• 0:54
  SPEAKER_02: Steve, Mark, we've had you both on the podcast before, but as a refresher, Steve, could you remind us what the role of the farm system specialists and farm system team is?
• 1:06
  SPEAKER_01: So we sit in between science and research.
• 1:08
  SPEAKER_01: So the research and science happening, one part, and then we've got extension of the other.
• 1:12
  SPEAKER_01: We sit in the middle of that.
• 1:14
  SPEAKER_01: So we translate, I guess you could say, the science and research into tools and resources that can be used through our extension teams for farmers to pick up, improve their farm systems.
• 1:24
  SPEAKER_02: I'm sure most farmers will know, but for those who don't, what do we mean by farm systems?
• 1:30
  SPEAKER_01: Dairy and Z5 production systems considers the portion of feed grown on the dairy platform versus imported feed and off-farm grazing.
• 1:38
  SPEAKER_01: The systems range between system one, which is fully self-contained with 100% homegrown feed, through to system five, where there is more than 31% of feed imported onto the platform, which may be used throughout lactation.
• 1:51
  SPEAKER_02: And what was the farm systems review design about?
• 1:55
  SPEAKER_01: The production definitions have been around for 20 years now, so since 2006, and dairy farming has changed considerably over that time.
• 2:03
  SPEAKER_01: So it was about actually reviewing these classifications and making sure they were still relevant.
• 2:08
  SPEAKER_01: The work originally kicked off looking at the definitions to determine whether they were fit for purpose, but as we got into the work, we realized that there was a much bigger opportunity here.
• 2:16
  SPEAKER_01: So rather than simply reviewing the production system classifications, we wanted to actually understand what was driving performance within those systems.
• 2:24
  SPEAKER_01: We followed up with an opportunity to dig and understand the decision-making processes of some of these high-performing farms across the various production systems.
• 2:31
  SPEAKER_01: And the really interesting question became about whether any common characteristics among high-performing farmers, irrespective of the farm prediction system they operated.
• 2:40
  SPEAKER_01: As part of that process, we did a quantitative and qualitative assessment.
• 2:45
  SPEAKER_02: Tell me more about that.
• 2:46
  SPEAKER_01: The quantitative information gave us those key physical and financial measures of the business, while the farmer interviews helped us understand the management practices and decision-making processes behind those numbers.
• 2:58
  SPEAKER_01: So the combination was kind of an intentional part of the process.
• 3:01
  SPEAKER_01: In simple terms, the numbers told us what the farms achieved, and the interviews helped us understand how and why they achieved these aspects.
• 3:09
  SPEAKER_01: The process allowed us to explore how farmers manage pasture and supplementary feet, people, finances, and the wider business, and how they made decisions and responded to things when situations or circumstances changed.
• 3:20
  SPEAKER_01: One of the things that stood out for us was that there wasn't a particular system behind success.
• 3:24
  SPEAKER_01: The commonality was much more around having clarity around the production system and the various farmers were operating and how they executed it consistently.
• 3:32
  SPEAKER_01: So, in many ways, the project evolved from reviewing the five production systems to investigating what we can learn from how successful farmers actually run the various production systems.
• 3:41
  SPEAKER_02: I'll bring you in here, Mark, because you did a lot of the interviews.
• 3:45
  SPEAKER_02: What were some of the significant commonalities you saw across all the systems?
• 3:50
  SPEAKER_00: I suppose one of the clearest national findings is that strong financial performance is not tied to a particular system number or level of feed inputs.
• 4:01
  SPEAKER_00: So that sort of thing aligns with much of the benchmarking work that has been done over many years.
• 4:06
  SPEAKER_00: And one of the things that really stood out, it doesn't really matter what system you're running, low, medium, or high, there were successful farm businesses across the whole spectrum.
• 4:17
  SPEAKER_00: What was much more consistent was how they managed the system they'd chosen.
• 4:21
  SPEAKER_00: They knew why they were farming that way.
• 4:23
  SPEAKER_00: They understood the key drivers of their business, and they were very disciplined around the fundamentals.
• 4:29
  SPEAKER_00: Really good example was homegrown feed.
• 4:31
  SPEAKER_00: Across the systems, there was a strong focus on maximizing the value they got from pasture.
• 4:37
  SPEAKER_00: Even on farms using significant amounts of supplementary feed, pasture still remains fundamental.
• 4:44
  SPEAKER_00: Importantly, supplement generally had a purpose.
• 4:46
  SPEAKER_00: It was there to complement pasture, fill a genuine feed deficit, protect residuals or round length, or maintain cow condition.
• 4:54
  SPEAKER_00: It wasn't simply about putting more feed to produce more milk.
• 4:59
  SPEAKER_00: So I think the big takeaway is that the system number itself wasn't what separated these farmers.
• 5:05
  SPEAKER_00: It was how well they managed and executed their chosen system.
• 5:10
  SPEAKER_02: It's sounding really clear.
• 5:12
  SPEAKER_02: There isn't one best farm production system to operate.
• 5:15
  SPEAKER_02: Do you want to tell us more about that, Steve?
• 5:18
  SPEAKER_01: Jack, that was one of the, I guess, the clearest sort of findings from this process.
• 5:22
  SPEAKER_01: And as Mark has already indicated, strong performance was identified across lower, medium, and higher input systems.
• 5:28
  SPEAKER_01: So the farm production system didn't actually correlate to farm performance.
• 5:32
  SPEAKER_01: What we found was, and what mattered really importantly, was actually how well the system fitted the resources and the realities of the particular farm.
• 5:39
  SPEAKER_01: This included kind of the productive capacity of the farm.
• 5:42
  SPEAKER_01: So this is pasture growth, sewers and climates, but also cow type, infrastructure, labour, and people capability and the financial position.
• 5:50
  SPEAKER_01: And ultimately the farm business objectives, which kind of acted like an umbrella across all of these aspects.
• 5:56
  SPEAKER_01: And that's where it got really interesting because a system that works exceptionally well on one farm may not be the right system for the farm next door.
• 6:04
  SPEAKER_01: It's about understanding what your farm can reliably produce.
• 6:07
  SPEAKER_01: So this is pasture encompassing that homegrown feed aspect that Mark's spoken about, what the constraints may be, where there may be opportunities, and then building a farm production system around those aspects and realities.
• 6:17
  SPEAKER_01: The successful farmers we spoke to had real clarity around these aspects.
• 6:21
  SPEAKER_01: They understood why they were operating the chosen system, where profit is derived from, and where the pressure points are on the farm system and which parts they needed to remain consistent versus where they had flexibility.
• 6:33
  SPEAKER_01: Across several regions, we saw emphasis on keeping the core system relatively stable and refining it rather than continuing changing direction with payout or seasonal conditions.
• 6:43
  SPEAKER_01: So for me, there isn't really a production system that you can point to and say that's the winning system.
• 6:49
  SPEAKER_01: Rather, this is about understanding the unique aspects of your farm, what works well, and that's soil climate location, and understanding limitations and opportunities, and then building a farm system that fits within these aspects.
• 7:00
  SPEAKER_01: And finally, it's important to tweak and optimize it.
• 7:04
  SPEAKER_02: I'm curious, because you know the farmers were already kind of operating these farm systems and you selected them because they were performing really well with that farm system and you wanted to understand it.
• 7:15
  SPEAKER_02: What did you learn about how they might have evolved their farm system through time?
• 7:21
  SPEAKER_02: So, like I'm just assuming that these farmers have not always run exactly that system on their farm.
• 7:28
  SPEAKER_01: Actually, that's probably a good point, Jack.
• 7:29
  SPEAKER_01: And I was thinking this when you asked the question that there probably has been a bit of an evolution, and that's probably it combined with farm gate milk price, payout, that sort of stuff, as well as, and we have seen a general trend towards higher input farm systems on probably on the back of payout and that sort of stuff as well.
• 7:46
  SPEAKER_01: But these farmers constantly refine those systems.
• 7:48
  SPEAKER_01: So they don't make substantial changes in terms of what they do, but they just adjust each year.
• 7:53
  SPEAKER_01: So it's about having that core plan and then building on that, adjusting, refining, learning.
• 7:59
  SPEAKER_01: And so there's a massive learning component as part of this process.
• 8:03
  SPEAKER_01: So, did this work last time?
• 8:04
  SPEAKER_01: No, it worked okay, but we can do it better.
• 8:07
  SPEAKER_01: And then constantly refinement.
• 8:08
  SPEAKER_01: So I see a whole lot of continuous improvement process with these farm systems.
• 8:13
  SPEAKER_01: I'm not sure if that answers your question.
• 8:15
  SPEAKER_00: I sort of wonder whether the farmers we're dealing with are the top of the pot.
• 8:20
  SPEAKER_00: You know, they're very good.
• 8:21
  SPEAKER_00: So they've probably been in the top 10, 15% right through.
• 8:25
  SPEAKER_00: They've always been looking around.
• 8:27
  SPEAKER_00: They've been collaborating, you know, they've been talking to other farmers, other top farmers, they've been talking to scientists, they've been fine-tuning their system right through.
• 8:38
  SPEAKER_00: You know, I think Steve's right, there's a base that they've had in place, but the world's changed quite a bit over the last 10-15 years.
• 8:46
  SPEAKER_00: So, you know, it's three or four different things that they've done, and they're not standing still.
• 8:51
  SPEAKER_01: I was going to say too, Jack, I think the other thing here is, and I use the the recipe of baking a cake as a bit of a recipe.
• 8:58
  SPEAKER_01: So sometimes when we bake a cake, we might put a little bit too much baking soda in it or not enough, or some other sort of ingredients.
• 9:05
  SPEAKER_01: These farmers are constantly refining that recipe, and that recipe over time gets better and better and better as they learn how to do that better.
• 9:13
  SPEAKER_01: And finally they get to a point where it's not substantial changes in their business.
• 9:17
  SPEAKER_01: They've got that recipe, they stick to that.
• 9:18
  SPEAKER_01: They might adjust a few little things, but other than that, that is the recipe that they use.
• 9:23
  SPEAKER_02: I guess through experience, they also know looking ahead at this season and these constraints or opportunities, these are the tweaks that I make.
• 9:32
  SPEAKER_01: So they have a core recipe, and then they know where they've got the flexibility to make changes or adjust.
• 9:39
  SPEAKER_01: And I think it's also keeping an eye on the environment around them as well and having awareness and then being able to respond within your business.
• 9:46
  SPEAKER_01: And I kind of like the analogy of using headlights when you're driving.
• 9:50
  SPEAKER_01: A lot of these farmers have the headlights on full beam, just to keep ahead of what's going on, I think, and implementing these changes and things in their business.
• 9:57
  SPEAKER_01: And being aware of that is really important too.
• 9:59
  SPEAKER_01: Hopefully that answers that.
• 10:01
  SPEAKER_02: All right, Mark, we'll bring it back to some of the other key findings.
• 10:05
  SPEAKER_02: What were the take-home messages for other farmers?
• 10:08
  SPEAKER_00: To be honest, Jack, the take-home messages are not that surprising.
• 10:12
  SPEAKER_00: You know, the best farmers are nailing a lot of the details.
• 10:15
  SPEAKER_00: The 1% is extremely well.
• 10:18
  SPEAKER_00: And I suppose the big take-home for me was from these really good operators, the clarity they have of their farm system and the decision making at key times is just exceptionally good and on point.
• 10:32
  SPEAKER_00: So, yeah, when the chips are down, they don't muck around in terms of making a decision.
• 10:37
  SPEAKER_00: Other key findings, the big ones, and some of it we've said, fit the system to your farm.
• 10:43
  SPEAKER_00: It's very individual in terms of your locality, type of cows you want to run, your debt and financial situation, and just family business type goals.
• 10:55
  SPEAKER_00: The fundamentals, they still come back to pasture.
• 10:58
  SPEAKER_00: How much pasture you're growing, harvesting, managing residuals, round length, the fundamentals.
• 11:05
  SPEAKER_00: Still that focus on profitability.
• 11:08
  SPEAKER_00: So know your costs, cash flow, return on investment, be prepared to do scenarios.
• 11:14
  SPEAKER_00: That's still such a strong base.
• 11:17
  SPEAKER_00: Some of the take homes, particularly a farmer up near Methfin, very much making decisions early, having triggers in place rather than them waiting until the problem becomes obvious.
• 11:30
  SPEAKER_00: And El Nino's one, actually front footing, you know, we've got the intel, actually have things in place so you're ready, you know, when if it takes place.
• 11:40
  SPEAKER_00: One around cow condition, obviously that is a fundamental.
• 11:44
  SPEAKER_00: We had a farmer up in the lower North Island, and basically emphasized that the farm system's very much set up to achieve body condition score targets and does all the fundamentals around that, and basically says get that right, and milk will follow.
• 12:01
  SPEAKER_00: So the BCS thing doesn't change.
• 12:04
  SPEAKER_00: And the other thing, I think Steve will talk about it a bit later, is just building a farm system that capable people other than the owner can operate consistently.
• 12:14
  SPEAKER_00: So that key person risk is a real challenge.
• 12:18
  SPEAKER_00: And so it's actually getting the team operating at the same level and actually being able to step away as a farm owner and your team basically picks up the reins well.
• 12:29
  SPEAKER_02: Mark, what does that mean for you know an owner-operator who might only have one staff member?
• 12:34
  SPEAKER_02: Does that mean that, you know, they have less choice around farm system?
• 12:38
  SPEAKER_00: Yeah, I still think, Jack, it is okay, it might be one person involved with on a family farm.
• 12:45
  SPEAKER_00: It is still around that clarity of that farm system, the person that is working as, say, the herd manager, totally understanding, you know, on the same wavelength as the farm owners.
• 12:57
  SPEAKER_00: Yeah, the clarity of the farm system at both levels needs to be clear.
• 13:02
  SPEAKER_00: And the communication channels between, say, that herd manager and the farmer owner need to be on point as well.
• 13:10
  SPEAKER_02: Steve, I'd like to dig into the pasture finding a little bit deeper.
• 13:15
  SPEAKER_02: You know, we've been talking about pasture first for a long time.
• 13:17
  SPEAKER_02: It's nothing new.
• 13:18
  SPEAKER_02: What did the farm systems review reveal?
• 13:21
  SPEAKER_01: Good question, Jack.
• 13:22
  SPEAKER_01: And Mark's touched on this already, but the review reinforced that pasture remains fundamental and central across all of the farm production systems, including higher input farms.
• 13:32
  SPEAKER_01: But what really stood out for us was the attention to detail that these farmers placed on pasture management and the disciplines sitting behind it.
• 13:38
  SPEAKER_01: So the real strong pasture managers understood, you know, the pasture supply, round length, residuals, growth rates, and pasture quality.
• 13:46
  SPEAKER_01: And they had a really clear approach to know how they wanted to manage pasture across the season.
• 13:50
  SPEAKER_01: And they stuck to the fundamentals and disciplines exceedingly well, kind of every day, every week, every month.
• 13:56
  SPEAKER_01: And they also weren't blindly following a recipe.
• 13:59
  SPEAKER_01: So they were continually observing, checking, and adjusting.
• 14:02
  SPEAKER_01: So you can kind of think of that as like a plan to check act approach, which is a continuous improvement approach.
• 14:08
  SPEAKER_01: So they knew what it could look like.
• 14:09
  SPEAKER_01: They monitored when where the farm was heading and they made adjustments when conditions deviated from the plan.
• 14:14
  SPEAKER_01: So that might be growth rates below demand, that sort of stuff, or growth rates above demand, and they were really attentive to that.
• 14:22
  SPEAKER_01: So the decisions really were around lots of little tweaks and not huge swings or movements in terms of what they did.
• 14:27
  SPEAKER_01: And they attempted to sort of track close to the wire.
• 14:30
  SPEAKER_01: So, you know, being attentive to and responsive to both surpluses and deficits and making real agile and timely decisions to ensure that they remained proactive, not reactive.
• 14:40
  SPEAKER_01: And I think that's a really important part of that.
• 14:43
  SPEAKER_01: So the direction of travel was really important for these farmers and are really, really good where either a surplus or a deficit was developing, they acted responsively.
• 14:52
  SPEAKER_01: So this might be mean changing round length, taking paddocks out for silage, or making regrassing decisions or adjusting supplement levels.
• 14:59
  SPEAKER_01: The farmers understood that dynamic nature of pasture management, particularly the importance of monitoring regularly and making decisions promptly.
• 15:07
  SPEAKER_01: Some farmers we spoke to even checked pasture cover twice a week when growth was flat stick.
• 15:13
  SPEAKER_01: So very attentive to that growth rates and what that could mean for quality if they got it wrong.
• 15:18
  SPEAKER_01: So it was really interesting.
• 15:20
  SPEAKER_01: The commonality amongst the farmers was attention to detail, consistency, and just really acting promptly.
• 15:25
  SPEAKER_01: They're really, really good at consistently executing the fundamentals, checking the outcome, and making small adjustments before a big issue become a big one.
• 15:34
  SPEAKER_01: So that's that proactive sort of management, which ensured that they had, I guess, the best return from the pasture that they grew on the farm.
• 15:41
  SPEAKER_02: Pastures one part.
• 15:43
  SPEAKER_02: You've already mentioned how important supplementary feed is in many of the farm systems.
• 15:48
  SPEAKER_02: Mark, what did the review tell us about how the better operators used supplements?
• 15:54
  SPEAKER_00: First off, I'd say, Jack, there's obviously been quite a shift in farm systems.
• 15:59
  SPEAKER_00: I'm an old bugger and came into the dairy industry close on 25 years ago.
• 16:05
  SPEAKER_00: Back then, it was literally 80% of farmers were system one and two.
• 16:10
  SPEAKER_00: And there's been quite a massive shift through to now.
• 16:15
  SPEAKER_00: And the majority of farm systems now probably fit into the three to four category.
• 16:21
  SPEAKER_00: So, and a game changer around that was very much the North Island.
• 16:25
  SPEAKER_00: There was a big drought in 07, 08.
• 16:28
  SPEAKER_00: And I remember going overseas, coming back, and there are all these silos, particularly around the Waikato.
• 16:33
  SPEAKER_02: Palm Cinel trailers everywhere.
• 16:35
  SPEAKER_00: That's right.
• 16:36
  SPEAKER_00: So that was, I think, a little bit of a game changer.
• 16:39
  SPEAKER_00: And honestly, supplementary feed, it's an important part of New Zealand dairy farm systems for obvious reasons.
• 16:47
  SPEAKER_00: Pasture growth isn't consistent throughout the season.
• 16:50
  SPEAKER_00: So there's just times when homegrown feed doesn't fully match cow demand.
• 16:56
  SPEAKER_00: So I suppose what came through strongly on the farm system review was it doesn't really matter what production system, but supplementary feed can be fed very successfully when it's fed with intent and has a clearly defined role.
• 17:09
  SPEAKER_00: And so that might be genuine feed deficit, protecting your residuals, maintaining body condition score, or just managing seasonal variability.
• 17:19
  SPEAKER_00: But the strongest operators were continually asking, okay, why are we feeding this?
• 17:24
  SPEAKER_00: Does this fit into our system?
• 17:26
  SPEAKER_00: And does it stack up financially?
• 17:29
  SPEAKER_00: And the reality, many farmers, especially over the last five years, with payout being pretty much being north of$8, many farmers have incorporated supplements into their systems very well.
• 17:41
  SPEAKER_00: And to be honest, it's stacked up economically.
• 17:44
  SPEAKER_00: So the key point is actually continually monitoring that situation.
• 17:49
  SPEAKER_00: Does it still stack up?
• 17:51
  SPEAKER_00: And say we get a payout drop or the return on investment on your supplement isn't as profitable, you've got to be prepared to adapt to that new reality.
• 18:01
  SPEAKER_00: So I don't think that the fundamentals of feeding supplements hasn't changed.
• 18:05
  SPEAKER_00: You still got to use it strategically, and it still should complement pasture and support your farm system.
• 18:11
  SPEAKER_00: So there's a broader question there.
• 18:14
  SPEAKER_02: I would assume that over the last 25 years, as part of that shift, farmers have also learned through experience how to use supplement more effectively than we might have, you know, when we first started using it.
• 18:28
  SPEAKER_00: 100%.
• 18:29
  SPEAKER_00: It's certainly changed, and the businesses that have really gone down that track have become incredibly efficient about it.
• 18:36
  SPEAKER_02: Steve, we've talked about feed decisions.
• 18:39
  SPEAKER_02: More broadly, what did you learn about how these farmers make decisions?
• 18:44
  SPEAKER_01: Look, a repeated characteristic was the farmers' ability to recognize a developing issue and take action while they still had options available.
• 18:52
  SPEAKER_01: And if you think of El Nino that's that we're potentially facing or going through now, you know, it's about being prepared in a proactive manner before things actually bite.
• 19:02
  SPEAKER_01: So if they bite, it's too late.
• 19:03
  SPEAKER_01: These farmers really knew their system in detail, they had clear targets and in many cases operated clear decision rules.
• 19:10
  SPEAKER_01: So they understood what they were monitoring, they knew what could look like, and more importantly, they'd had triggers to, I guess, tell them to do something differently or deviate from their plan.
• 19:19
  SPEAKER_01: So across the review, these triggers include things like, you know, developing feed deficits, round length, cow condition, as Mark touched on before, expenditure and changes in financial outlook.
• 19:29
  SPEAKER_01: There was also a real combination of experience and agility.
• 19:33
  SPEAKER_01: So these farmers weren't constantly changing their system, but they used their experience and understanding to know when and how to respond and were confident to act early.
• 19:42
  SPEAKER_01: It's just that proactive management as opposed to reactive, which was absolutely apparent.
• 19:47
  SPEAKER_01: And I guess, you know, being agile isn't about changing direction all the time.
• 19:51
  SPEAKER_01: It's being able to flex parts of the system while remaining true to the underlying core farming strategy.
• 19:57
  SPEAKER_01: And that consistency, along with timely decision making, came through strongly across the regional findings.
• 20:03
  SPEAKER_01: But importantly, these farmers were thinking beyond today's horizon.
• 20:07
  SPEAKER_01: So they were constantly thinking about decisions that they make today and what that might mean two, four weeks from now, and potentially, you know, later in the season or into next season.
• 20:16
  SPEAKER_01: So we looked at whether these decisions were being driven by intuition or data, and generally it's kind of a combination of both.
• 20:23
  SPEAKER_01: You know, the experience gave the farmers context and judgment while information and data provided that check on where the business was heading.
• 20:30
  SPEAKER_01: So I guess it's important to note that these farmers weren't necessarily monitoring hundreds of measures.
• 20:36
  SPEAKER_01: But what stood out for us was just the key physical and financial measures that really mattered to their farming systems were the ones that they monitored.
• 20:44
  SPEAKER_01: So things like pasture, feed, cow condition, repro performance, operating expenses, operating profit, cash flow, and return on investment were kind of those key, I guess, consistent measurables that we saw across interviewed farmers.
• 20:58
  SPEAKER_01: So I guess a common theme was that these farmers had a process in place, which was like observe, check, interpret, and act.
• 21:06
  SPEAKER_01: But I guess just as a final point, I just wanted to say that one of the key things we did identify that data really only adds value in these farmers' businesses where it helps make a better decision.
• 21:17
  SPEAKER_02: Steve, you talked about the importance of experience there.
• 21:22
  SPEAKER_02: We want our early career farmers to succeed as well, but they obviously don't have the depth of experience.
• 21:30
  SPEAKER_02: You know, how can they jump ahead and adopt some of this?
• 21:34
  SPEAKER_02: How do they make up for the lack of experience?
• 21:37
  SPEAKER_01: I think for people that are early in their career, it's about lining themselves up with an employer, an employer that really wants to take them on a journey, wants to teach them, wants to give them the knowledge that they've learned over time.
• 21:47
  SPEAKER_01: And I think that's part of it.
• 21:49
  SPEAKER_01: But it's also being open up to training and learning and being curious around why decisions and things have are being made so that they're actually, you know, open in their mind and will learn through that process.
• 21:59
  SPEAKER_01: But I think I think as time goes on, and and look, Mark and I have both farmed, is that you learn from experience.
• 22:06
  SPEAKER_01: So you kind of have to do time in the saddle to understand what worked or what could have been done better and those sorts of things.
• 22:12
  SPEAKER_01: So it does come from time, but I think you know you can potentially supercharge that or shortcut that by actually lining yourselves up with a great employer that's willing to invest their time and energy into you and sharing that knowledge.
• 22:24
  SPEAKER_02: You also talked about how these farmers are thinking beyond today's horizon.
• 22:29
  SPEAKER_02: You talked about, you know, a few weeks or later in the season or next season.
• 22:33
  SPEAKER_02: I was curious, and either of you can answer, what you heard from these farmers about how they're thinking about even broader horizons than that.
• 22:43
  SPEAKER_02: Sort of the market or greenhouse scale.
• 22:46
  SPEAKER_02: I don't know.
• 22:47
  SPEAKER_00: Look, I farm myself.
• 22:49
  SPEAKER_00: I'd class my sheep and beef farming.
• 22:52
  SPEAKER_00: I was very much in my comfort rut of what I was doing.
• 22:55
  SPEAKER_00: And it was absolutely operational.
• 22:58
  SPEAKER_00: And you really couldn't see the wood for the trees.
• 23:01
  SPEAKER_00: And I suppose coming into the dairy industry, the best operators are the ones that are looking at what's happening in the market.
• 23:08
  SPEAKER_00: They are talking to the top farmers, they're talking to the top scientists, but they've got a global perspective of what's going on.
• 23:16
  SPEAKER_00: And I think to run these businesses these days, you you need both.
• 23:20
  SPEAKER_00: It's a multifaceted discipline that needs to be part of your skill set.
• 23:26
  SPEAKER_00: It's very broad.
• 23:28
  SPEAKER_01: If I can add anything to that as well, I think, you know, some of these farmers have the ability to actually look up and look around.
• 23:34
  SPEAKER_01: And we call this kind of, I guess, environmental scanning.
• 23:37
  SPEAKER_01: What's on the horizon, what's coming our way, what do we need to be aware of?
• 23:40
  SPEAKER_01: They're involved, they're connected.
• 23:42
  SPEAKER_01: Getting off the farm is really important, I think.
• 23:44
  SPEAKER_01: Sometimes, and I used to tell some of my team, you know, you get stuck on the island.
• 23:48
  SPEAKER_01: You need to get off the island and have a look around and talk to people and be aware of what's coming our way.
• 23:53
  SPEAKER_01: I think it's important to remain curious.
• 23:55
  SPEAKER_01: But to Mark's point as well, you know, stay connected to these good farmers, get involved in groups, be aware, ask questions, that sort of stuff.
• 24:02
  SPEAKER_01: And yeah, just be curious, I think is a really important thing.
• 24:05
  SPEAKER_02: And I guess having uh real clarity of your farm system, a farm system that others are able to run is one of the things that allows them to kind of get off farm and look outside their immediate business.
• 24:18
  SPEAKER_01: Absolutely.
• 24:18
  SPEAKER_01: Yep.
• 24:19
  SPEAKER_01: Get off the island.
• 24:19
  SPEAKER_01: That's what it's all about.
• 24:21
  SPEAKER_01: You can't be on the island all the time.
• 24:22
  SPEAKER_01: It's nice to be on the island, but sometimes you've got to get off the island.
• 24:25
  SPEAKER_02: All right, Mark.
• 24:26
  SPEAKER_02: Shifting gears to the financial side of the business, what were some of the key traits you saw among these farmers?
• 24:33
  SPEAKER_00: In terms of um some of the couples we interviewed, many had complementary skill sets.
• 24:40
  SPEAKER_00: And often, you know, the reality was that one partner had the operational expertise, you know, very much involved in, you know, the cows and grass stuff, farm system execution, and doing the basics well on farm.
• 24:54
  SPEAKER_00: And then the second partner often did the financial administration compliance.
• 25:01
  SPEAKER_00: Having two partners with complementary skill sets in terms of the equity growth and the business management success, those skill sets stood out quite a bit.
• 25:11
  SPEAKER_02: Surely you didn't only interview couples.
• 25:14
  SPEAKER_02: There must be high-performing farm businesses that aren't couples.
• 25:19
  SPEAKER_00: 100% there are.
• 25:20
  SPEAKER_00: And I suppose the organization and the skills to do the same sort of thing when you're in sole charge, that's another level.
• 25:28
  SPEAKER_00: It's still needs, I suppose, whatever your situation, a business team around you that is able to tick those boxes.
• 25:38
  SPEAKER_00: In terms of financial performance, okay, across all the different farm production systems doesn't really, you know, it's still a front and center thing, knowing your metrics.
• 25:48
  SPEAKER_00: And there's a bunch of KPIs, hundreds.
• 25:52
  SPEAKER_00: I think, you know, get it down to a few KPIs that are mission critical to you.
• 25:58
  SPEAKER_00: And one farmer in particular said there was only two that he followed, and that was operating profit per hectare and pasture harvested.
• 26:07
  SPEAKER_00: The others, like OPEX and, you know, fed into that.
• 26:11
  SPEAKER_00: But he just kept it really straightforward with just those two KPIs.
• 26:16
  SPEAKER_00: The other side of the story was very much the budgeting, benchmarking, and monitoring.
• 26:23
  SPEAKER_00: You know, you can make a budget, but are you doing the cash flow?
• 26:27
  SPEAKER_00: Are you monitoring that cash flow as you go through the year?
• 26:31
  SPEAKER_00: And bringing the two sides together in terms of the feed budgeting and the financial situation and continually monitoring.
• 26:38
  SPEAKER_00: I think just having your finger on the pulse, you know, with I suppose good financial systems in place.
• 26:45
  SPEAKER_00: The other thing I would say, just around the financial management story, is there's a real issue right across the board around financial literacy, and particularly for many of the managers and chair milkers progressing through the industry.
• 27:00
  SPEAKER_00: It's a key skill gap for many, is absolutely critical, you know, with farmers moving into um business ownership.
• 27:09
  SPEAKER_00: So I'd put an absolute plug in for courses like Business by the Numbers, run by Dairy Training, because it is a big jump going from manager to say contract milker, share milking, and you need that, those financial skills to be successful.
• 27:25
  SPEAKER_02: No farm can operate successfully without people.
• 27:28
  SPEAKER_02: Were their themes in how these high-performing farmers managed and developed their teams?
• 27:34
  SPEAKER_01: So one of the key things that stood out for us in these interviews was that the farmers actually treated people as part of the farm system, so not as a separate aspect.
• 27:43
  SPEAKER_01: You know, you can design a really technically excellent farm system, but if you haven't got the people that understand it and can execute the plan consistently, then it's not going to work.
• 27:52
  SPEAKER_01: So we saw the stronger operators.
• 27:54
  SPEAKER_01: They recruited for um attitude and fit.
• 27:57
  SPEAKER_01: They set clear expectations and accountabilities with their team and they explained the why, which I think is really, really important.
• 28:02
  SPEAKER_01: So this kind of gave the employees why they were doing, how they were doing, and gave them the understanding that they needed to have, but also gave them responsibility and ownership as well.
• 28:12
  SPEAKER_01: They placed a real importance on developing capability and growing people within their businesses, which actually led to better retention anyway, rather than just employing people to complete tasks.
• 28:23
  SPEAKER_01: So I think the key thing for us really was the farmers gave their people context, capability, and ownership.
• 28:28
  SPEAKER_01: That's really what it came down to.
• 28:29
  SPEAKER_01: And Mark touched on it earlier on regarding the key person risk.
• 28:33
  SPEAKER_01: A strong farm system shouldn't depend entirely on, you know, the owner, the manager, or an experienced person being there to make every decision.
• 28:40
  SPEAKER_01: So across these regional findings, we did see an emphasis on clear roles and communication and staff development.
• 28:45
  SPEAKER_01: But with those management structures, reducing that reliance on key people to make those decisions.
• 28:50
  SPEAKER_01: So the key decision-making processes were shared across the farm team and these farms.
• 28:56
  SPEAKER_01: The other things that were really important that we saw too were things like workable rosters, you know, flexibility with ours, good housing, and development opportunities.
• 29:05
  SPEAKER_01: So, you know, these aspects really create an environment where people want to stay.
• 29:09
  SPEAKER_01: So for me, the message was really simple.
• 29:10
  SPEAKER_01: The best farm system still needs capable people to run it.
• 29:14
  SPEAKER_01: And the stronger businesses, you know, weren't just around cows and pasture, they're actually growing their people as well.
• 29:20
  SPEAKER_02: We're seeing more technology utilized on farm.
• 29:24
  SPEAKER_02: Where did technology sit across the farmers that you interviewed?
• 29:28
  SPEAKER_00: Ultimately, Jack, technology needs to earn its place in the farm system.
• 29:33
  SPEAKER_00: And the questions many of these farmers were asked, you know, what problem are we actually solving?
• 29:39
  SPEAKER_00: Will it improve our decisions or efficiency?
• 29:42
  SPEAKER_00: Does the financial return justify the investment?
• 29:45
  SPEAKER_00: And does it fit our people in the existing farm system?
• 29:49
  SPEAKER_00: So, you know, there are some highly profitable farm systems that have no tech, and there are others that would not do without it.
• 29:59
  SPEAKER_00: And I suppose when you look up back over the last couple of years, you have done interviews around this, Jack.
• 30:06
  SPEAKER_00: There's been quite a focus on wearables.
• 30:09
  SPEAKER_00: It's a broader question.
• 30:10
  SPEAKER_00: Many of the farmers had a broad suite of tech that they've got across their farm business, you know, all sorts, irrigation monitoring, VAT monitoring.
• 30:20
  SPEAKER_00: There's WhatsApp groups, there's all sorts that have a level of tech.
• 30:25
  SPEAKER_00: So, you know, I suppose when you look at the tech where it's saving time, especially during the mating period, that's been a game changer.
• 30:34
  SPEAKER_00: You know, improving pasture management without a doubt, and improving some of the labor metrics, especially around just time on farm.
• 30:43
  SPEAKER_00: If you can get asleep in for an hour, that can make a heck of a difference.
• 30:47
  SPEAKER_00: But I suppose the key thing is it's not viewed as automatically beneficial simply because it's there.
• 30:55
  SPEAKER_00: It needs to be whole farm systems context.
• 30:58
  SPEAKER_00: Does the whole thing really tally?
• 31:01
  SPEAKER_02: Would you say these farmers are um early adopters or a little slower of technology?
• 31:08
  SPEAKER_00: There are certainly farmers that are, you know, absolutely cresting the wave around technology and uh pioneers around it.
• 31:17
  SPEAKER_00: I would say quite a few are probably fast followers.
• 31:21
  SPEAKER_00: You know, they mightn't be in the first wave, but they'd absolutely do the due diligence and go, actually, does this really tally?
• 31:29
  SPEAKER_00: And, you know, put it through its paces as to where it fits.
• 31:35
  SPEAKER_02: Now, Steve, were there any limitations with the process that listeners should understand?
• 31:41
  SPEAKER_01: Yeah, absolutely, Jack.
• 31:42
  SPEAKER_01: And I think it's really important to be transparent about these two.
• 31:45
  SPEAKER_01: So the farms we interviewed were deliberately selected strong performers.
• 31:49
  SPEAKER_01: So this wasn't designed to be like a statistically representative sample of New Zealand dairy farmers.
• 31:55
  SPEAKER_01: What we were trying to do is understand what these high performing farmers were doing and how they were making decisions to identify those common themes and practices across the different farm production systems and regions.
• 32:06
  SPEAKER_01: So we just need to be real careful about cause and effect.
• 32:09
  SPEAKER_01: Just because a particular practice was common among these farmers we interviewed doesn't mean that we can say that practice on its own caused or resulted in their high performance.
• 32:19
  SPEAKER_01: So there were some limitations with the quantitative data as well.
• 32:22
  SPEAKER_01: So not every KPI was available for, you know, directly comparable across farms, regions, and seasons.
• 32:28
  SPEAKER_01: So we just need to be thoughtful about how we interpreted those numbers too.
• 32:32
  SPEAKER_01: But also more importantly, you know, the regional context matters.
• 32:35
  SPEAKER_01: The same principle might apply nationally, but how a farmer puts into practice will depend on climate, soils, feed, supply, infrastructure, people, and you know, the actual individual business aspects.
• 32:47
  SPEAKER_01: So this process really hasn't been about developing, I guess, a recipe for the perfect dairy farm, but what it has been great for is identifying strong and recurring practices and themes that were observed across successful farms operating across differing farm production systems across the country.
• 33:03
  SPEAKER_01: So, you know, the opportunity for farmers is then to ask, you know, what can we learn from these practices and how could we apply them without our own context of our own farm?
• 33:12
  SPEAKER_02: Mark, to wrap things up, what is the biggest practical opportunity for farmers listening?
• 33:18
  SPEAKER_00: Well, and I think Steve said it a little bit, the opportunity isn't necessarily to change a farm system.
• 33:25
  SPEAKER_00: It's to take a really honest look at how well the system you're operating, how's it going?
• 33:31
  SPEAKER_00: Yeah, I'll repeat this a little bit, but the big take-home for me, and probably the biggest opportunity that we saw from high-performing farmers was the clarity they had about their system and their absolute discipline execution of that system.
• 33:48
  SPEAKER_00: Their decision making when the pressure was on was absolutely excellent.
• 33:53
  SPEAKER_00: And last week I was over on the West Coast, they have challenges, obviously, around climate and are often forced into reactive decisions.
• 34:02
  SPEAKER_00: They don't muck around with the decision.
• 34:04
  SPEAKER_00: They understand their farm system, they understand the levers to pull, and when the chips are down, they make the decisions, you know, when the pressure's really on.
• 34:13
  SPEAKER_00: So I think it is just being absolutely comfortable with that.
• 34:18
  SPEAKER_00: The other stuff around pasture-harvested, financial performance, getting the best from your team all feed into it, but it is still around that clarity of that farm system.
• 34:31
  SPEAKER_02: Well, thank you, Mark and Steve.
• 34:33
  SPEAKER_02: Like from this review, we can, of course, confirm there's no one best farm system.
• 34:38
  SPEAKER_02: Strong results can come from different systems, but the successful operators are really clear about what their system is designed to achieve.
• 34:47
  SPEAKER_02: They know their numbers, they keep their pasture and feed management central, they act early and they execute consistently.
• 34:53
  SPEAKER_02: Thanks for listening, and we'll catch you next time.
• 34:55
  SPEAKER_02: Matewa.
• 35:02
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• 35:20
  SPEAKER_02: As always, if you have any feedback on this podcast or have some ideas for future topics or guests, please email us at talkingdairy at dairynz.co.nz.
• 35:30
  SPEAKER_02: Thanks for listening and we'll catch you next time on Talking Dairy.