Award winning Legendairy Heywood farmers Stephen and Tania Luckin realise they’re not sprinters but they love the challenge of a marathon.
That’s how they’re tackling the milk price challenge and they are determined to “farm our way out of it”.
The Luckins, named the 2016 Dairy Australia Farm Business Managers of the Year at the Great South West Dairy Awards, say they’re in dairy for the long haul.
Their success has been built around intensive forward planning, intricate budgeting and close monitoring and they’re not about to change a successful game plan.
“It’s a long-term game,” Stephen said. “We’re not running a sprint, we’re running a marathon. We’ve all been through an emotional rollercoaster but we’ve tried to put the emotion aside and deal with the facts, create a plan and farm our way out of it.”
Tania said farmers were particularly hurting from the retrospective price cuts coming at the end of a tough season.
The Luckins have looked at the short-term impacts on their business and how to deal with it within their long-term strategy.
“By focusing on it like that it took away any emotion,” Tania said. “Whatever decision we made was based on what was best for our business.
“We can either put our heads in the sand and hope it goes away or say this is a challenge and we’re going to beat it. We’re looking on it as challenge to build a stronger and more resilient business and from that we’ll have a stronger and more resilient industry.”
The Luckins have a good track record after moving in 2009 to near Heywood where they have redeveloped the 291 hectare milking area and milk 500 mostly Holstein cows.
They set a 15-year strategic plan and broke it into five-year phases and then into one-year action plans. The first five years were about development, including subdividing, improving facilities, renovating pastures, extending the dairy and introducing an electronic herd management system. They are in a consolidation phase and everything has been going to plan, albeit with the complication of droughts and the price crash.
In response to high feed costs after the 2012-13 drought they changed from a split calving regime to seasonal calving in March-April. In 2016, which turned out even drier than 2012-13, their amount of bought-in feed was 11 per cent lower than during the previous drought.
“That has been an excellent risk management strategy and it’s more efficient for the farm,” Tania said.
Another focus has been to increase the amount of home-grown fodder.
“We’ve identified that reducing debt and increasing on-farm productivity and profitability is all about growing more fodder at home,” Stephen said.
The Luckins share their annual operating plan with the farm team, set monthly goals, divide their business into six key management areas and use 16 different monitoring tools to check that they’re on target.
“That’s the key to our success,” Tania said. “Risk management is really important. As farmers we deal with volatility on a number of levels. Price volatility you have some control over by ensuring you supply the company that best suits your business and maximise the milk price your business can achieve. The other is weather – we don’t have control over that but we do have control over the impact it can have on your business.”
Originally from New Zealand, Stephen was from a farming background and worked in oil exploration and engineering but went back to farming because that’s where he wanted to be. The pair looked at buying the family farm, but decided they could get a better return on investment by moving to Australia.
“We both love Australia – 19 years later we’re still here,” Tania said.
Tania worked in retail – and even won Retail Business of the Year for a children’s store they owned in Warrnambool – and had no plans to become a dairy farmer. “Look at me now… I love it,” she said.
One of the big attractions is working together. “We love working together,” Tania said. “That’s a really big thing for us. We’re aware of our personal strengths and weaknesses. I love financials and analysis, whereas Stephen is fantastic at growing grass and making milk. Fortunately, we get a real thrill out of finding a challenge and working through it together and coming out the other side knowing we’ve really achieved something.”
Stephen says that struggling farmers will have a reason to pat themselves on the back and feel proud when they emerge from the current trough.
They are strong supporters of the Legendairy communications initiative. “The whole concept is fantastic and so positive,” Tania said.
And despite the industry’s issues, Stephen said the mood at the dairy awards was positive and people enjoyed the opportunity to celebrate successes.
Previous winners in 2012 of the Employer of the Year award, Tania says the title is the ultimate. “We were thrilled. We love dairy farming and being part of the industry but it is a business and we try to run it efficiently. When we came here it needed a fair bit of work and it’s lovely to see it come to fruition.”