A new chapter in farming career

Succession is more than a television drama - it’s part of real life for many farming families. Hamish Hammond reports on his own family experience.

Hamish Hammond training the next generation George in the ways of the family business.

THIS COMING SEASON MY wife Rach and I are starting as 50:50 sharemilkers on my family farm after six years of contract milking. Getting to this point was not a given because even though this is a family farm, succession is complicated.

Three generations are involved: my grandparents, my father and his siblings, and me and my three siblings.

Everyone has an interest in the future of the business which makes succession a tricky and dynamic process, especially for farms because they are not a ‘regular’ business, they include people’s homes and childhood memories. Here are a few reflections as we begin the next chapter.

Thankfully my parents and grandparents had the foresight to structure the farm business to enable transfer of ownership. They have also built a strong balance sheet that won’t be crippled by the sale of assets from one generation to the next. And, most importantly, they have had the wisdom to talk about the future of the farm with all family members.

Communication and planning has been key to making everything work. For my parents, employing professional advice in the form of a trusted accountant and business succession professional to plan and facilitate discussions amongst family members was a critical part in the process.

These key professionals worked primarily for my parents with the intention to formulate a plan and help implement it, enabling my parents to take one step back and us as the succeeding generation to take one step forward.

Knowing your numbers in and outside the farm office is a must. Thankfully after six years of contract milking we are familiar with the farm system and the financial performance it can deliver year-on-year.

We were able to use this understanding for budgeting the 50:50 operation and it has given us the confidence that if we deliver onfarm, financial returns are attainable.

Furthermore, on the back of a good relationship with my parents we were able to use their historical financial actuals for building a budget that is realistic.

Working through this budget with my parents and their advisers helped to enlighten us on what we should expect financially, particularly in the expenses category.

Over the last six years our family farming team has tweaked a successful business into a more resilient model. We have shifted to full-season once-a-day milking, and focused on breeding high-performing cows suited to this regime.

We focus on growing the best pasture we can and have shifted the emphasis away from expensive supplements. We aren’t the lowest-cost system but strive to be frugal as well as spending good money on infrastructure, animal health and staff.

We implement the KISS approach instead of adding complexity where possible. All of these policies form the basis of a strategy aligned between my parents and us running the farm. This is important as we are both committed to the same farming strategy and therefore, we are more likely to achieve our goals onfarm and with our succession plan.

All the best for the new season.