A restructured management approach that has put more onus on staff is paying dividends for farm managers Isaac and Michelle Johnstone.
Farming for Peter and Fiona Musson is not just about milking cows and growing grass; it’s first and foremost a business that has to be commercially successful.
Their attitude and aptitude led to winning the Farm Business Manager Award at this year’s Great South West Dairy Awards and has also helped them to progress from selling their furniture to finance their relocation from England to Australia 21 years ago to building a sizable net worth.
“It’s very much a business, not just a farm,” Peter said. “When we started we had to pay a commercial rate to lease the original 270-cow farm so we’ve always had a business-driven attitude. You don’t want the headaches of running a non-profitable business.”
The Mussons milk nearly 800 cows on a 320 hectare milking area at Macarthur plus support blocks that more than double the size of the farm.
The Dairy Farm Monitor program has shown the success of their business many times. The 2014-15 report shows it achieved a return on asset of more than 7%, about 2% above the regional average.
The gross farm income per kilogram of milk solids was in the top 25% and the milk solids per hectare was above the regional average.
Their break-even price was just below the region’s average of $4.88 per kg/Ms and they ranked above average in whole farm earnings.
When they started leasing the original farm from Fiona’s parents they milked just 270 cows.
“We’ve managed to expand the business and our net worth.”
Making sure everything is timed to perfection, knowing where they’re heading and getting the right advice have held the Mussons in good stead.
They used an on-farm consultant for the first few years, undertook courses to compare English and Australian farming systems and enjoyed the benefits of discussion groups.
They made judicious purchases of nearby land and feel that was probably an advantage of being in a slightly drier area in south-west Victoria.
Fiona’s father Ian Webb has a background in analysis and that emphasis has continued to permeate the business.
“We always know where we’re at as a business and always aim to make profitable decisions,” Peter said. “You need to know what the potential is in five or 10 years’ time if things go badly or if they go good.”
“As we’ve expanded we’ve always looked for more efficient equipment, were early adopters of backing bars on a then-new rotary, telehandlers and automatic gate timers, and use contractors extensively.”
When the price crashed last year they had the financial model to immediately assess the full-year impact. When they believed the situation seemed to be going from bad to worse, the long-term Murray Goulburn suppliers changed to Warrnambool Cheese and Butter last January, consulted their bank about the potential for more financing should it be needed and cut some cow numbers, but otherwise it was business as usual.
“We always try and risk-manage our business by having fodder reserves, which we see as an insurance policy,” Peter said.
“We used up reserves and worked it that way. We cut down numbers fairly quickly at the start of the year to 740 cows but kept the feed regime similar to other years.”
The Mussons utilise as much home-grown feed as possible and fill the gaps with good quality feed.
The farm has an intensive six-seven week calving in autumn and the WCB payment system better suits their milk production.
They are moving back to Friesians after introducing mixed breeds to address a calving problem. With the excess land they are happy to rear extra heifers for export or selling as in-calf, and are now introducing Wagyu cross to better utilise the non-milking area and gain price certainty.
Calving is now on track. “Our in-calf rates are fairly high,” Peter said. “We use AI and in the first six weeks last year there were only 9% not in-calf. We had 3 or 4% not-in-calf rate when we’d thrown the bulls in.”
The Mussons are enjoying the spoils of a good season. The farm receives 630-650mm average rainfall, though it went 10 years without reaching that average.
“This year we’ve had plenty of autumn rain and a drier winter so we can grow more grass. We’ve tried to go back to a perennial base as much as we can but still use Italians or a combination of chicory-base summer crops.”