A focus on people, profit and planet has seen the team at Okaihau Pastoral Holdings named Dairy Business of the Year Supreme Winner for 2019. Chris Neill reports.

They’re not parochial but the Okaihau Pastoral Holdings team are really excited to be the Dairy Business of the Year Supreme Winner for 2019 and the first Northland farm to take the award.

Winning Best Northland Farm and the High Input Farm with Best Financials adds to their celebration. Their smile just gets wider when noting that Northland farmers Colin and Issy Beazley are national winners of Dairy Industry Awards for 2019. They even tried to claim FMG Young Farmer of the Year 2019 James Robertson as Northern Region representative.

Joe and Jenima Foster as equity partners and farm managers work closely with independent director and farm adviser Paul Martin as the Okaihau Pastoral management team.

Responsible to the board representing shareholders, the management team are focused on creating a “profitable, high performing dairy farm they can be proud of”. The business has matured to the point where this vision is being achieved and taking time for a review in line with core values of integrity, teams, respect and trust, focused on people, profit and planet.

Okaihau Pastoral is located due west of Waimate North where some of the earliest European farms were established in the Bay of Islands.

With flat to easy rolling country and adjoining native forest it feels like good farming country and the judges’ evaluation of their performance confirms that under the current governance, management and farm teams, it is. This high-input farm with 1181 cows on a platform of 351.3 hectares delivering an operating profit of $5742/ha and 11.3% return on capital places them well above ordinary. The split-calving herd, 75% spring and 25% winter, harvests 12.4 tonnes drymatter (DM)/ha from pasture to produce 1809kg milksolids (MS)/ha. Pasture provides 58.7% of the feed and is the essential low-cost component which is critical for profitability.

Measuring inputs and outputs is essential for management success. With pasture being the cheapest feed available to the business, it receives considerable attention.

Twice-weekly pasture assessment during peak growth period and weekly in the slower growth periods are the starting point. Pasture residuals of 1600kg DM and expectations of 80-90% utilisation of feed grown are key indicators. Against these known inputs, the amount of supplement is calculated to deliver up to 20+ kg DM/cow/day with monitoring for excess residuals in the feed troughs or paddock providing verification. Targeting “fully fed”, total feed per cow at 6t DM/year comes from 3.5t pasture, 1t DM/cow from maize grown on an adjoining lease block and the balance from palm kernel and bread waste.

Ongoing calculations of feed demand, supply and cost are made to ensure the feeding and production expectations are met at least cost. Judges calculated cost of production in the business to be $4.01/kg MS.

Production at 520kg MS/cow or 635,000 total kg MS balances the equation. Winter milk contracts are a financial bonus. Quota volumes were expected to be a challenge but through a combination of spring calving starting August 1, cows producing 1.7kg MS/day when drying off as late as July with BCS 5, and autumn calving starting March 25 the business is readily capturing price premiums.

As Joe identifies, “on a large farm the little things make a big difference”. Monitoring and responsiveness are critical for controlling input costs and ensuring outputs are achieved. The management team have scope to act as required but recognise the value to decision-making rigour that comes with monthly board reporting.

The intensity of farming at Okaihau Pastoral requires reliable infrastructure to ensure operational efficiency. The covered stand off pads allow cows to be off pasture for at least six hours a day with equipment to feed, clean and milk that meets the businesses environmental standards.

Effluent from the cowshed and covered pads can be spread over 92% of the farm at low application rates appropriate to the soil type. Where the farm adjoins Lake Omapere, a buffer of planting has been established along with fencing and planting of waterways and small gullies. A total of 40ha planted natives adds to the aesthetic and ecological value of a farm where kiwis may be seen when bringing the herd to morning milking.

This business seeks to “front foot” environmental issues. The 80ha lease block is cropped annually for maize and at this time there is no local contractor who can provide a no till option. To keep carbon in the soil with continuous ground cover a winter mustard crop is grown then worked back to the soil when cultivating for maize.

Soil fertility is closely monitored across the farm to ensure fertiliser type, application rates and timing are environmentally and economically optimal. Nitrogen is applied little and often, from 150-200kg/ha/yr. The business is seeking options to meet coming expectations for greenhouse gas emission control and looking for industry bodies to focus research on finding solutions that work for New Zealand farmers.

In addition to the management team, the farm is operated with a 2IC and five farm assistants. Team selection is important for alignment with the vision and values of the business. Work allocation ensures team members are multi-skilled, and tasks are shared to avoid drudgery. Everyone is informed about what is happening onfarm and their daily activities, with an expectation they will be safely home by 5.30pm.

Regular staff meetings keep a focus on health and safety, and attention is paid to having a safe and comfortable work environment to support staff wellbeing. To reduce the multiple cost of travelling for staff training, specialists are brought to the farm to engage with the whole team in the context of their business.

This business is successful because the people involved know what they want to achieve and their individual roles in making it happen. The management team enjoy working together and challenging each other. Their mutual respect and confidence in each other is obvious. They will upskill to meet societal expectations and regulatory compliance for environmental sustainability while maintaining farm profitability.

As Supreme Winner of the 2019 Dairy Business of the Year Award the Board and shareholders have been reassured that their team is performing well.