Simply the best

A simple system, executed exceptionally well with a heavy emphasis on feeding has paid off in more ways than one for two farmers in an equity partnership-owned sheep and beef farm at Alfredton, near Eketahuna.

Over four years Jim Varty and his son Brendan have averaged a return on capital of 5.9% on Wai-iti, more than three times the national average for all sheep and beef farms.

They have paid off $330,000 in principal and bought $63,000 of ewes in the past two years alone.

 

This performance won them the Keinzley Agvet Wairarapa Sheep and Beef Farm Business of the Year for 2016.

BakerAg consultant Chris Garland facilitated the award’s field day and summed up the operation well, saying there was no silver bullet and nothing fancy about it, but the Vartys did the basics well.

“They’re really focused on a few measures they have worked out produce profit in their business.”

The focus is on sheep breeding and production, and a joint venture with Wairarapa hill country station Wairere, which adds value in the form of sheep genetics and Angus cattle, which equates to about an extra $10 a stock unit or $100/ha.

Concordia Farms bought Wai-iti in 2005. Jim and Brendan’s combined stake is 42% in the equity partnership.

Jim is in charge of business and farm management, in conjunction with Brendan, who is shepherd general and also responsible for stud stock management.

There are five shareholders and a governance board of four directors, including Jim and Brendan.

The business recently introduced a new equity partner after the exit of David Roberts, who has also been invaluable in doing the books for Wai-iti.

Stock always come first and the Vartys endeavour to stay one step ahead of the season. They keep things simple, stick to the basics and do them well.

This father and son team work like a well-oiled machine, drawing on individual strengths and involving wider members of their team to ensure a successful all-round operation. Jim’s experience, coupled with Brendan’s youthful exuberance, is a winning formula.

Wai-iti is 683ha (620ha effective), well sub-divided into 85 paddocks. The farm is about 60% easy to medium hill and 40% medium to steep hill country with mudstone and clay soils.

Although 220ha of the property is cultivatable, they run an all-grass system because Jim has yet to be convinced of the benefits of cropping on this class of country.

“We’ve done a small amount of regrassing, spraying in summer and again in early autumn and straight into new grass. It was my intention to go into cropping but it never happened,” Jim says.

The nine and a half year average rainfall is 1128mm, but the average in the last two years has dropped to 1053mm and the Vartys have weathered some whopper droughts.

Heavy reliance on dams, particularly in Although 220ha of the property is cultivatable, they run an all-grass system because Jim has yet to be convinced of the benefits of cropping on this class of country.

“We’ve done a small amount of regrassing, spraying in summer and again in early autumn and straight into new grass. It was my intention to go into cropping but it never happened,” Jim says.

The nine and a half year average rainfall is 1128mm, but the average in the last two years has dropped to 1053mm and the Vartys have weathered some whopper droughts.

Heavy reliance on dams, particularly in summer, has caused some concern in the drought-prone area hence all dams have been cleaned out.

They run a 73:27% sheep-to-cattle ratio with a big emphasis on lambing percentage and weaning weight. They aim to consistently lamb at 150% plus and wean lambs at 32kg-plus.

Their goals include growing the business, continuing to pay off debt and for Brendan to grow his shareholding.

The Vartys did not have any handouts or leg-ups – everything they have achieved comes on the back of hard work, passion and dedication.

Their story is an inspiration for anyone in the industry who hopes to one day own their own farm, it may take time, but it is possible.

Joint venture pays dividends

Through their joint venture the Vartys have the largest satellite ewe flock and are the largest supplier of ram lambs to Wairere. The relationship with Wairere has a strong influence on the business.

They have a flock of 1100 fully recorded, single-sire mated, ewes.

The stud stock side of the business is Brendan’s baby and all lambs are tagged and recorded daily at birth.

They have supplied an average of 1150 ram lambs to Wairere every year for the past 10 years, at an average weight of 32.34kg.

Qualifying ram lambs have to be scanned twin and weigh a minimum of 28kg and supply is from December 4-16.

The Wairere agreement takes care of 60% of the ram lambs and the balance are killed through Silver Fern Farms or sold store.

About 1060 replacement ewe lambs are hand-picked before shearing in the New Year. About 85% of surplus ewe lambs without faults are sold on to other farmers as replacements, at a premium, and the balance sold store.

When they started out they bailed 1543 ewes from Wairere, but that number is now down to 411.

Their marketing policy for wool is best price in the shed and wool weights average 6.3kg/sheep su.

For the past seven years all ewe hoggets have been mated and one of their goals is to lamb 100% from their hoggets.

The Vartys are rewarded for the work done with a premium from Wairere that Jim says equates to about $10/su or $100/ ha on the bottom line, although they can’t discuss the specifics of the payment arrangement, which is based on the schedule on the day plus the premium.

The Vartys constantly monitor ewe condition and preferential feeding treatment is given to light ewes, as well as the hoggets.

Ewes average 66-68kg year in, year out, regardless of the season. Pre-tup, the Wairere team comes in and any with faults are culled.

The average weight of ewes at tupping is 68kg, two-tooths average 63kg and hoggets average 48.5kg.

Hoggets are prioritised and Jim says they have very few issues at lambing because they have been grown out so well.

The “We never have a day we try to hold them back. We try to feed them to the best of our ability right the way through. We have very little bearings or lambing trouble,” Jim says.

The Vartys have notably low wastage from scanning through to live lambing, the last two years it has been about 12%.

Fans of the professor

The Vartys claim to be Massey professor Paul Kenyon’s biggest fans and try to follow what he recommends to the letter. One of the biggest things they have learned is to focus on the tail end. From weaning the tail-end ewes are drafted off and prioritised. “We try to eliminate having a tail end of light ewes.”

They always have a tail-end mob of about 200 ewes. Ewes that improve move back into the main mob, but the tail-end mob stays the same size, so there is a cycle of continual improvement. Jim is never happy with his whole flock.

The tail-end mob is in front of the main mob, taking the mob pressure off them and giving them the best feed.

Ewes are body condition scored once a year at scanning and every time they go past a set of yards any tail-enders are drafted off.

“It’s a great opportunity. It’s so easy at scanning because you’re pushing every one into the crate. I like to look after the ewes and have them in good nick 12 months of the year, especially coming into lambing,” Jim says.

“We don’t get hung up on bearings. Forget the bearings. We have approximately 1-1.5% bearings and we have pretty fat ewes here come lambing.”

For multiple-bearing ewes Jim aims to have them going on to covers of 1300-1400 drymatter.

No-drench policy

At Wai-iti there is a no-drench policy, though Jim admits they struggled with lamb weights this year and he wonders if it might be the reason. Long term, he believes it will pay off.

Ewes have not been drenched for the past 20 months but lambs get their first drench at weaning, a drench and five-in-one in January, and are drenched every 28 days thereafter through to autumn.

While they try to avoid drenching the ewes completely, Jim says about 30 really light ewes were drenched this year. Ewes get a five-in-one pre-lamb.

Keinzley Agvet veterinarian Caleb King has done a number of faecal egg reduction tests at Wai-iti to determine what drenches are working at help the Vartys make informed decisions.

“The less resistance on sheep and beef farms the better. It’s a tough road to take and I congratulate Jim on his approach,” Caleb says.

Caleb says 40% of their clients would now be operating a no-drench system.

“Farmers that have used long-acting products over the last eight years seem to have higher risk of one or more families being resistant.

Resistance is very common because we have relied on the Mectins to get through some tough times. If you lose the effectiveness of that family your alternative drenches become quite expensive.”

Previously, the Vartys have always given lambs a B12 at docking but this year they blood-tested the lambs and as far as cobalt was concerned, they were fine. But selenium was lacking, so all lambs got a selenium shot.

“Jim doesn’t accept face value, he questions deeper. Grass doesn’t stay the same every year, trace elements are changing every year – you can’t do it by guessing.”

Replacement ewe lambs get toxo and campy and Caleb is currently doing a campy trial in the mixed age ewes, to see if there is any benefit of a booster as a fourth.

“Almost no one does it. We expect to have some outcomes by this time next year to see if it’s worth vaccinating mixed-age ewes for campy.”

Cattle a flexible class of stock

The cattle policy at Wai-iti is very flexible and, having been burned before, Jim is wary of drought.

They had sold their herd of 90 cattle last year to give more flexibility and moved to a straight trading and grazing system, but the predicted El Nino drought never eventuated and the feed got away on them, so they bought cows with calves at foot to compensate. They currently have 145 cows on, 60 of these are their own, and more grazers on the way.

“There was a lot of talk about El Nino and the mother of all droughts but we’ve had one of the best December and Januarys since we’ve been here and I didn’t have the balls to stock up on cows. As a consequence there are parts of the farm that are not cleaned up,” Jim says.

Despite this, Jim is not fazed.

“We’re focused on fully feeding the ewes and giving them the best quality. Once tupped the better-condition ewes can do a bit of work. We will mob those cows up and we have more cows coming on. We will have more adult cattle mouths on through winter and we will gather it up.

“The cattle policy was to have 90-100 of our own cows but we found that in a good year it wasn’t enough and in a bad year it was 100 too many. We have a trading component of heifers and steers. There’s a strong financial argument for bulls, but I don’t want to live with the bastards. I’m too old.

“Sheep breeding is our core business so we just use cattle. The cattle on Wai-iti get the rough end of the deal, they’re a tool and that’s all they will ever be.”

Solid financials

Solid financial results year on year are one of the hallmarks of the Vartys’ business.

ANZ regional manager Sean Stafford says theirs is one of the top performing hill country businesses on their books. Their 5.9% average return on capital is more than three times the national average across all sheep and beef farms, which according to Beef + Lamb New Zealand data hovers somewhere just above 1%.

Rural CA accountant, Lawrence Field, ran through the financials and said the key message was one of consistent, solid achievement, driven off high gross farm revenue (GFR). Sheep account for 80% of the GFR, as well as good cost control, with a consistent stocking rate of 9.5-9.6 su/ha.

The Vartys generate close to $1200/ ha GFR. “On this class of country, to be achieving $1200/ha is absolutely key, and making a profit gives you options,” Field said. This translates to an average of $433 Economic Farm Surplus/ha over the last four years.

Field singled out the sheep revenue/ su of $143.04 for 2014-15 as exceptional, well above the top 10% average for their class of land, which is $113.66.

A number of key KPIs drive the overall operation:

• Kilograms of liveweight/ha at balance date

• Weaning weights drive the whole system – average of 32-34kg gives them a very marketable product and an ability to shift a large number of lambs quickly

• Emphasis on pre-lambing BCS at scanning – careful to have everything at 3-3.5

• Survival – maximum number of lambs surviving off their mother. Attributed to good genetics and quality of mothers along with topography of land and good feeding. Nitrogen boost applied pre-lambing in August is a key tactic for producing more feed.

Father and son team

The Vartys do many things well but one of their overriding strengths appears to be their strong connection and ability to work together as a father and son team, as well involving wider members of their team.

Awards judge George Murdoch cited their background in martial arts and how that impacts on the farm business. “Being disciplined, being determined to be the best.”

Brendan is a multiple New Zealand amateur Muay Thai champion and NZ professional light middleweight champion, and has twice represented NZ at the world championships.

Brendan paid tribute to his father, saying he wasn’t just his father, he was his best mate. “We have arguments and swear at one another but we’re very forgiving and get over it and by the end of the day we’re back to being mates. I can’t answer why it works really.” Jim is clearly proud of his son, and thankful they are living the dream together.

“For me to be here, doing what I love, and working alongside this fella every day, I really believe I’m the wealthiest man in the world.”

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