The Changing Face of Farming
DAIRY HERDS CHANGING HANDS FOR UP TO $3,000 A BEAST; ‘CONVERSION’ FARMING, AS A WHOLE SECTOR; MOVES SOUTH CHANGING THE CHARACTER OF FARMLAND FROM SHEEP TO DAIRY; CORPORATISATION WITH BUY-OUTS, MERGERS AND HUGE STOCKHOLDINGS NUMBERING IN THE THOUSANDS; TECHNOLOGICAL OPPORTUNITIES AND ON-LINE SERVICES; ‘WHOLE HERD’ AUCTIONS AND INTERNET SALES; SMALL SCALE FARMS PAINTED OUT OF THE PICTURE. LIFE IS VERY DIFFERENT ON THE FARM.
Story: Charles Martin Photography: Roland Bart Ebbing
RIC DAWICK HAS SEEN IT ALL - and he is not well pleased with some of the changes and developments that characterise New Zealand farming in the 21st century.
The co-founder of Waikato Farmers recently retired after 46 years in the stock agency business to pursue interests in the Waikato and Coromandel with his family, balanced occasionally with some selective consultancy, valuations and herd sale facilitating.
“There is no other job quite like stock agency work. I have witnessed many farmers - who are truly the salt of the earth and the backbone of our great nation - work the land on all scales of economy and shared with them their good times and bad times. In hard financial trading conditions I have had hardy men openly weep on my shoulder, worried sick about debt, stock losses, feed shortages, lack of cow condition - including farmers on prime arable farmlands - and seen the consequential affects on their families of these worries.
Sometimes I have discreetly shed a few tears in empathy with them. Other downsides that come with the territory are marriage break-ups and suicides. While sadly I have had my share of those I have also fortunately been in a position to contribute towards reconciliation and thankfully salvation respectively”, he says wistfully.
The memories came flooding back.
He recalls coming within an ace of being shot on one occasion.
“Acting under instructions from my employer to collect an outstanding debt I arrived an hour early for the third appointment with the client after he had defaulted on two earlier ones. By sheer good luck he was down the farm and I later found out he had a shotgun positioned at the back door of his house, primed and ready for action. I discovered this because later that day he went to the local pub, held up the patrons, then sat in wait for an opposition colleague, who had also been instructed by his company to collect a debt from him, to come in for his daily ‘worm drench’.
“Fortunately one of the staff managed to slip quietly out the back and call the police.
He was arrested and committed to a hospital’s psychiatric ward where the story of the loaded gun behind the door came to light. From that day on I have always left such physical calls to the credit department”.
I headed for safer ground - the changing face of farming. Ric looked wistful.
The New Zealand Way
“For most of my career we did business face to face with farmers with a firm handshake.
The relationship between stock agent and farmer was part of the stuff that makes New Zealand different and special. I fear that the ‘corporatisation’ of the industry, with its shareholder interests, management structures and enormous stock-holdings, has undermined that special relationship. I worry too that the small farmer and sharemilker are getting painted out of the picture”, he warned.
“I am personally a survivor of seven takeovers and mergers. When I started in 1961 there were locally eight substantial stock companies competing. These have now dwindled to three, plus a handful of small private agents. The same has happened to dairy companies - basically they have been reduced to one mammoth company. Ten years ago we had double the number of dairy herds in the Waikato than they have today. Land and dairy stock prices are sky high. As we speak a dairy cow fetches between $2,300 and $2,400 and with the industry more and more in the hands of big business city folk, where is the aspiring youngster to go who wants to work for himself with his own herd on his own farm?”
He recalled some of the extraordinary markets he had experienced during nearly half a century in the industry which tended to confirm the old adage that ‘there’s nothing new under the sun’- it’s just the scale of change, the timing of economic cycles or the extent or influence of the drama.
“Sadly I have had to send whole herds riddled with TB off to the freezing works and remember clearly being completely powerless to help, other than loading them onto trucks hoping that it would ease the client’s pain in a small way. I remember too that one season, when the works price was so high and butterfat payout so low, it sadly made more economic sense to truck sound and in-calf dairy herds to the freezing works to be slaughtered. I have watched beef and wool prices fall so fast that clients were going bankrupt or facing serious income loss all in the space of three weeks because of escalating exchange and interest rates triggering rapid drops in schedules.
Now we have an enormous dairy boom which is visiting upon the industry rapid and massive changes affecting the whole farming community to greater or lesser degrees.
These changes are certainly not all for the better”.
I suggested that maybe such changes were natural outcomes of the current economic climate and that there was a certain inevitability about them?
Ric Dawick responded that, while there are arguments for and against, he still firmly believed that there is nothing like a good strong local competitor to keep service and accountability to clients sharp - open competition not takeovers and mergers.
He also believed that, even with massive change, the industry has a responsibility and a part to play in ensuring that young people continued to come through and enjoy a successful farming career.
He spelt out a simple formula, applicable even today, for someone contemplating going share-milking:
• see their financial adviser first
• secure a job
• find a farming mentor to discuss plans thoroughly
• and find a recommended dairy herd specialist agent - then buy a herd.
Buy a herd? Ah yes, the eternal problem of share-milkers and the aspiring farmer which remains one of the ‘constants’ in the industry, free from change.
But financial opportunities and possibilities have also altered in keeping with market dynamics and he pointed out that his apparently simple formula holds good even under today’s extraordinary circumstances. That is why finding a mentor is a key element of the formula.
“Mentors are important in anyone’s career. During my time I enjoyed three very good ones in Bernie Davis (farming), Neil Houghton (farming and business) and Dr Clive Dallton (animal health, technology, agri specialist networking and foreseeing farming events). These men shaped my career, actions and attitudes. There are still plenty like them throughout the industry”.
Proud Legacy
The advice comes from a man who also left an industry legacy of which he is especially proud - a Contract for Forward Sale and Purchase of Dairy Cattle. Recently reviewed, this has been used extensively for 19 years by Allied Farmers (the second largest stock agency company in the country after PGWrightsons), Elders Jersey Marketing, Progressive Livestock plus a few private agents who also use it.
The contract sets out clear terms and conditions between vendor and purchaser of a dairy herd. Ric also co-pioneered (along with retired Allied Farmers Company livestock manager, Colin Morrison) the dairyherds.co.nz website, the first for any New Zealand stock and station company.
It was the predecessor, and according to the client and agent feed-back a more successfully structured site, to the current ‘My Livestock’ site, and attracting 30,000 hits when withdrawn.
Commenting on the future he believes that “fantastic internet opportunities abound if they are carefully thought through and managed”, although he cautioned that ‘on-line whole herd auction’s will not succeed in a keen market, especially by bank-driven conversion farmers who need to secure quickly, with certainty and within budget.
He predicts that there will be huge efficiencies just around the corner to be gained from internet opportunities, such as broadband technology for quick-time video streaming of herds on line in real time. IT developments will be the next big move in the industry, while mergers, corporatisation and conversion farming will continue to increase the size of average herds and land holdings while reducing the place of the small individual farmer within the industry.
“However” - and it is now he smiles rather enigmatically - “there are two other factors that will have an effect on the changing face of farming. The first is the cyclical effect by which various sectors take their turns in terms of prominence, economic viability and wealth - a cycle which few seem able to forecast with any accuracy.
The second - perhaps more an emotional wish than reality - is that the big players will start scrapping amongst themselves, and breakaway groups and individuals will fight a guerrilla action to realise those special New Zealand characteristics of independence, individualism and responsibility, and a competitive environment. But in this day and age, that will probably be interpreted as preaching heresy”.
I think Ric Dawick was starting to have me on at this stage but I quite liked the sentiments as a pleasant ending to our chat. After all, there must be a lot of wisdom stored in the reservoir after 46 years in the stock agency industry and maybe this was just one example of it?
