{"id":13407,"date":"2015-01-05T00:00:00","date_gmt":"2015-01-04T11:00:00","guid":{"rendered":"https:\/\/www.farmersweekly.co.nz\/bridging-the-payout-gap\/"},"modified":"2015-01-05T00:00:00","modified_gmt":"2015-01-04T11:00:00","slug":"bridging-the-payout-gap","status":"publish","type":"post","link":"https:\/\/www.farmersweekly.co.nz\/news\/bridging-the-payout-gap\/","title":{"rendered":"Bridging the payout gap"},"content":{"rendered":"Reading Time: <\/span> 4<\/span> minutes<\/span><\/span>

\u201cIt made us learn so much more about what we do,\u201d Colleen said.<\/p>\n

\u201cWe got stuck into CashManager and started pulling things apart and looking at the coding and questioning everything and how we did it and why. It made us really focus on our business.\u201d<\/p>\n

\u201cWe learnt that you can\u2019t make the outside work if the inside isn\u2019t working,\u201d John said.<\/p>\n

That focus has continued with GST returns now done monthly, allowing easy updating of year-to-date figures, and the couple keeping an eye on the payout, the weather and other factors that influence their business.<\/p>\n

With southern farmers experiencing one of the wettest and coldest late springs and early summers for decades, and another payout plunge, the Neustroskis have cut their farm working expenses (FWE) from $3.55\/kg milksolids (MS) last year to a budgeted $3.12 (based on production of 254,000kg MS).<\/p>\n

One of the first things to go was palm kernel, even though it has reduced their budgeted production.<\/p>\n

\u201cBeing a medium input farm we can switch up or down depending on the payout,\u201d John said.<\/p>\n

\u201cIt\u2019s a good way to be. We\u2019ve only used palm kernel to fill feed shortages and we find buying it on contract doesn\u2019t suit us as then we\u2019re locked in. If the feed shortage doesn\u2019t happen we still have to use it,\u201d Colleen said.<\/p>\n

Molasses in the rotary has also been cut. This year it was used only from calving until artificial breeding was finished \u201cto get the cows on the platform\u201d.<\/p>\n

Last season they used the high payout to put on capital fertiliser, a new tractor shed, a bridge so the cows no longer had to ford a creek to get to a paddock, fences replaced and knaprock spread on lanes and gravel around water troughs.<\/p>\n

They also reduced debt to a current level of asset-to-debt ratio of 50:50.<\/p>\n

\u201cThat is our goal, to continue to reduce debt. We don\u2019t want to buy another farm or more land. We\u2019re happy with what we\u2019ve got. We have a holiday house in the Marlborough Sounds and that\u2019s going to be it at this stage,\u201d John said.<\/p>\n

Their two sons are in their 20s, one a chef in Melbourne and the other flying helicopters at the glaciers on the West Coast before heading to Canada when this tourist season ends.<\/p>\n

\u201cThey both have an interest in the farm but we\u2019ve told them to go see the world first. That\u2019s what they want to do. Once you\u2019re milking cows then that\u2019s it.\u201d<\/p>\n

Instead Nathan Gold, who has been with them for seven years, the past two as a contract milker, is responsible for hiring labour and making sure the cows get milked.<\/p>\n

\u201cWe look after the calves so we\u2019re always crossing paths with him every day and we always stop and have a chat. We don\u2019t have formal meetings but we\u2019re always talking about what\u2019s happening,\u201d John said.<\/p>\n

\u201cIt\u2019s critical to have staff you can talk to.<\/p>\n

\u201cWe know he wants the cows to do their best and he knows how we like the farm looking, that we like things done right. We\u2019ve invested heavily in infrastructure on the farm to make it a good place to work and he appreciates that.<\/p>\n

\u201cBut we don\u2019t make our staff our friends, however we do treat them well. We look after them.\u201d<\/p>\n

Looking after them last year meant a helicopter flight into Fiordland when they found out none of the staff had been in a chopper before.<\/p>\n

Colleen said communication and a working relationship with their bank manager and accountant were also key.<\/p>\n

\u201cWe\u2019re probably talking to the bank every fortnight giving them a heads up about what\u2019s going on and we find an accountant who is on the same wavelength as us is important. They have to have an understanding of what you are doing and why \u2013 what our goals are.\u201d<\/p>\n

Also part of their team is farm consultant Ivan Lines.<\/p>\n

\u201cHe comes in about four times a year and just gives us another point of view about what we\u2019re doing. He\u2019s a fresh set of eyes.<\/p>\n

\u201cHe\u2019s also is a go-between, between us and the staff. He\u2019s in the best position to see where any of us could make improvements.\u201d<\/p>\n

And communication is also important between the two of them.<\/p>\n

\u201cOne of the strengths of our business is that we work well together,\u201d Colleen said.<\/p>\n

\u201cWe bounce ideas off each other all the time. John has these harebrained schemes and I tell him, I don\u2019t think so. He\u2019s the positive and I\u2019m the negative. Not that I\u2019m that type of person, there just has to be someone there to fill both of those roles.\u201d<\/p>\n

\u201cWe\u2019re always looking at opportunities, looking at ways we could make something work,\u201d John said.<\/p>\n

\u201cI think some of that is from going through a conversion. There are so many challenges and you learn so much and you keep that way of thinking all the way through,\u201d Colleen said.<\/p>\n

They came to Southland in 1993 after milking 300 cows on 80ha near Te Aroha, wintering on for Colleen\u2019s parents.<\/p>\n

Wanting to grow their sharemilking business, they decided to look at an offer from Tasman Agriculture and flew to Invercargill.<\/p>\n

\u201cWe looked at this farm west of Winton and it was snowing and there was not a blade of grass to be seen and there were sheep everywhere. Then they showed us a first-year conversion and a second-year and a third-year and said we had 24 hours to think about it. We made up our minds on the flight home.\u201d<\/p>\n

When they arrived at the farm at the start of June there was a dairy in the middle of a paddock and that was it.<\/p>\n

\u201cWe fenced around the cows when they needed shifting. We helped the contractors build tracks and put in troughs and fencing. With our staff we did everything from ripping out the old fences to putting in tape gates and underground cables.\u201d<\/p>\n

In six years they grew from milking 570 cows to 1100, bought a couple of small farms and by June 2006 were able to buy Kahikatea Dairy which was a self-contained farm milking 300 cows producing 130,00kg MS. The Neustroskis now run it as a milking platform with a support block five minutes away for the calves and another at Dipton for wintering. Last season they produced 271,730kg MS.<\/p>\n

\u201cWe wouldn\u2019t have got to the size of where we are today if we hadn\u2019t moved down to Southland when we did.<\/p>\n

\u201cPeople say the Neustroskis are lucky, look what they\u2019ve got but we\u2019ve worked hard to get where we are. I did 28 years putting cups on and that was enough,\u201d John said.<\/p>\n

They both say stepping out of the dairy has given them a better understanding of their business.<\/p>\n

\u201cIt gives you more time to think and to see what is happening around you, and the opportunities that are out there to take.\u201d<\/p>\n

Key points:<\/strong><\/p>\n

Farm:<\/strong> Kahikatea Dairy
Owners:<\/strong> John and Colleen Neustroski
Location:<\/strong> Centre Bush, Winton
Area:<\/strong> 169ha milking platform, 57ha support area, and 95ha support area at Dipton
Herd:<\/strong> 570 crossbred, BW 147, PW 184
Planned start of calving:<\/strong> 28 July
Production:<\/strong> 2013-14 season 271,730kg MS<\/p>\n","protected":false},"excerpt":{"rendered":"Paying too much for a support block just before the last time the payout dipped put Central Southland dairy farmers John and Colleen Neustroski under pressure. However, looking back they say it was the best thing that ever happened to their business.\n","protected":false},"author":33,"featured_media":13408,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[3],"tags":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t