Whether the dairy industry is looking good, bad or ugly, northern Victorian farmer Brendan Hehir says his Nuffield Scholarship has given him sage advice on protecting profits and keeping a lid on costs.
The scholarship has given Brendan an insight into how top farmers control their costs, even when prices are good.
“Often in this industry we let our cost of production go up when the milk price goes up so we don’t capitalise as we should in those good years,” Brendan says.
“One of the things that stood out in my report was the discipline of the top 5 per cent of farms I visited around the world. They made sure they applied the same financial rigour over their business whether it was good times or bad times.”
Sponsored by the Gardiner Dairy Foundation, Brendan researched the systems and mindsets that top farmers employ to maintain flexibility in a volatile environment without compromising their underlying profit drivers.
After releasing his Nuffield Scholarship report in August, Brendan is now sharing his findings with dairy farmers and the broader agricultural community, and says we have a lot in common and a lot to learn from farmers around the world.
The successful farmers he visited had a strong financial focus based on a carefully crafted budget that was often reviewed externally. They regularly reviewed their performance, acted on any warning signs, shared their goals with staff, consulted with discussion groups, used advances in technology to access relevant data and ensured their systems could withstand volatility.
Brendan applies these principles to his farm at Wyuna near Kyabram in northern Victoria, where he farms with parents Terry and Pauline and fiancé Kate.
“This year because of the tightness of the conditions, people are a lot better at running the ruler over everything and doing the checks and balances,” he said, “but we need that much scrutiny every year.”
Becoming a Nuffield Scholar was a long-held ambition. “Dad was a Nuffield Scholar so I grew up with having scholars visit,” he said. “One of the benefits of the program is that the scholarship doesn’t finish when you submit your final report; you remain in contact for life. When I was growing up, international scholars would come to the house and I’d stay up and talk to them at night. I was always envious of what they were doing and think that I wanted to be that person one day.”
Brendan visited four continents over 18 weeks of travel as part of the Global Focus program and for his individual research.
“It really opens your eyes to the international agricultural scene,” he said. “One thing that stood out for me is that we can get a bit bogged down thinking our problems are the worst but getting around with people from different countries we were talking about a lot of similar problems.
“It was infectious being with all these passionate young people who see the huge potential for agriculture and it opens your eyes to the opportunities that exist.”
Brendan said the experience was personally fulfilling while benefitting his farm and the broader industry. “There are things that I saw that we can implement within our own business and have since recommended to our local discussion groups.” he said.
Brendan said the program opens doors and opportunities. “You get recognised as being a Nuffield Scholar and it gives you the confidence to take on challenges,” he said.
Brendan has stepped up to a challenge, having been appointed chair of the Australian Dairy Conference programming committee for 2020. “I probably wouldn’t have been confident enough to do that without the scholarship.”
The conference will be in Melbourne on February 20-21 and will include discussions on culture and soils.
Brendan said there was no “silver bullet” to ensure a successful dairy industry but many things farmers need to do well.
“The day-to-day farming systems are different in every region,” he said. “What works in northern Victoria is very different to Gippsland but underlying these operational decisions are the business decisions. Having a clear understanding of your main profit drivers is one of the key points, regardless of where you farm. We have to think of it as a business and provide the same scrutiny as any business in town.”
Brendan said the support of the Gardiner Dairy Foundation had led to a life-changing experience.
“Gardiner has been amazing through the whole process,” he said. “I’m extremely grateful for the support. This program allows aspirational dairy farmers the international platform to further their skills and capabilities. It is a great opportunity and something the whole industry benefits from.”
“It has given me a platform to share knowledge with my peers through presentations to local groups, and helped to build my networks.”
Brendan aims to have a resilient farm for the next generation to take over, that can withstand the tough climate of northern Victoria and years of low water allocation.
“Since I was a little boy, all I wanted to do was be a dairy farmer. I worked in the energy industry for a few years but I’ve been back on farm eight years.”
Brendan, 33, is now running the farm business and sees a strong future for dairy in northern Victoria although “it will be different to how dad operated the farm”.
“There are more financial products available now to help manage risk and it’s important as dairy farmers and business people that we really understand them and embrace them to achieve their full potential,” he said.
“We’ve made a lot of investment in technology, including soil moisture probes which are important in making sure we irrigate at the right time and optimise the amount of growth per megalitre of water. We have one farm irrigation system that can be controlled remotely through a mobile phone. When Dad started irrigating the shovel would have been one of his most important assets, when I’m irrigating the phone is the most important asset.”
Brendan’s final Nuffield report can be found at: https://www.nuffieldinternational.org/live/Reports