Two years ago, Simpson dairy farmers Craig and Sophie Bennett were making plans to leave the industry; today they have plans in place for a long-term future in dairying.
The turnaround has been inspired by Dairy Australia’s Our Farm, Our Plan program, supported by Gardiner Dairy Foundation, which led Craig and Sophie to make significant changes in their lives and business.
They now follow budgets more closely, have a new bank and accounting system, have bought additional land and secured another lease block, employed a full-time worker and have improved their equity and reduced their risks.
Coupled with successive good seasons, the future is looking bright and Craig says he has overcome his earlier negativity.
“We went into Our Farm Our Plan about two and a half years ago in a negative mindset looking to formulate a plan to exit the industry,” Craig admitted. “But with the favourable seasons coupled with the changes we’ve made; we see a future again.
“Setting goals has given us clarity. We’re working towards having the financial freedom at 50 to have the lifestyle we want. That’s 10 years away but we just keep trying to hit our milestones along the way.”
Craig and Sophie milk 340 Holstein cows on about 300 hectares with their four children aged between 10 and 15. They moved from being employees to leasing to owning the farm, formerly run by Sophie’s parents, quicker than expected.
“We bought the farm before we were 30. We were under financial pressure early on but ticked off life goals like buying a farm, building a herd and starting a family.”
But what came next? “I’d felt for several years that we had been drifting a bit,” Craig said. “We were going through the motions with no clear direction or strategy, certainly no goals in writing.”
They were keeping their heads above water but needed a purpose.
“We tried consultants looking for a silver bullet but that was never going to happen,” Craig said, “but with Our Farm, Our Plan we both identified our goals and charted a course to achieve them. Once we had those goals written down, it has been a lot easier to map the road forward.”
Craig’s goals were mostly business orientated, Sophie’s were more balanced between family, lifestyle and the business.
“Our children didn’t choose to be dairy farmers and we want to make sure they don’t come second to the farm,” Sophie said. “They shouldn’t have to forego sport because of our choice to go into a seven-days a-week job.”
One goal was to financially support their children’s education and to have time off-farm to share their adolesence.
“We scheduled regular time off that we hadn’t been doing and we put on a full-time employee which has taken the pressure off,” Craig said. “We get to netball and football and do those important family things. At the end of the day, there’s nothing more important than your children.”
Craig and Sophie also set longer term goals around growing equity, consolidating debt and making a profit.
“We had some tough seasons but had been guilty of thinking we’d set a break-even budget and ride the year out. Now we have structured our business to make a clear return on assets year in-year out.”
After tough conversations with the facilitator, they set a hard budget that allowed an employee. “We had to put on a worker to meet out lifestyle goals and we had to afford it so we had to budget – it flowed on and the pieces of the jigsaw puzzle fell into place,” Craig said.
“We knew we needed an employee but having it written in black and white, showed we could afford it.”
They are making the most of these good years to be better prepared for the bad years. “That came out in Our Farm, Our Plan when we identified our greatest risks and put procedures in place to tackle them,” Craig said.
To address fluctuating milk prices, the Bennetts have paid off additional debt which they can recall if needed. Uncertainty around their leased blocks was another identified risk; they have now purchased one block and entered a long-term lease agreement for the other.
They are undertaking due diligence to ensure they have the right processor to match their milk profile, and they use tools such as grain contracts to mitigate risks of larger input costs.
They have a good relationship with their new bank manager and also saved one percent interest in the transition.
Our Farm Our Plan also helped Craig and Sophie to focus on their communication.
“We now set time on the calendar every month to communicate, assess our goals and review the budget,” Craig said. “That has been a great benefit and has made sure we’re on the same page.”
A written vision is printed and hangs in the office. “When we question why we’re doing certain things, we can refer to that vision and goal and it helps with decision making,” Craig said.
“We set some bigger goals and then broke them down to bite-sized pieces we can check off. If we’re achieving those smaller goals, then we are getting closer to the bigger goal of getting ourselves and business into a healthier position.
“We’re both certain on where we’re going. Good communication and planning helps to make the vision clear.”
For information on future Our Farm Our Plan programs, contact 1800 548 073 or WestVic Dairy on 5557000.