Richard and Davina Syme have maintained farm performance at a high level while living off-farm, taking on new challenges and having some great family adventures along the way. Sheryl Brown reports.
Richard and Davina Syme have a history of being open to new opportunities and this hasn’t stopped since they took up dairy farming 10 years ago.
In recent years they have taken on new challenges off-farm with a move to run a large-scale farming business in the Manawatu, spent 10 months travelling overseas with their children and, as evidenced by being finalists in the 2017 NZ Dairy Business of the Year (DBOY), have been able to do this while maintaining farm performance at a high level.
Richard hadn’t milked a cow until they took up dairy farming in 2007. He grew up in urban Southland, with some exposure to sheep and beef farming through family, and had a love of the outdoors. He studied a Bachelor of Commerce (Agriculture) at Lincoln University and landed a graduate role with ENZA, which gave him a great introductory view of the apple and pear industry in NZ.
After time spent travelling around America and Canada, he returned to work for ENZA in NZ before taking on a sales and marketing role for them based in North America.
Davina, who grew up on her family dairy farm in Te Aroha, studied accounting at Massey University and worked for KPMG before leaving for her own OE to the UK. She then moved to Whistler, Canada for a working holiday, where she met Richard.
‘In striving for top performance you never feel like you ace pasture management. There are so many variables that you are taking into account in decision-making such as season, weather, animals and paddock variations. It’s challenging but is also one of the most rewarding aspects to farming.’
The couple moved to Melbourne where Richard studied towards an MBA while Davina worked in the energy sector. Richard took on operational and then general management roles in the consumer goods sector. After five years working in both Melbourne and Sydney, and with two young children in tow, they decided it was time to move home and be closer to family.
An opportunity came up to work on Davina’s family farm at Te Aroha. Davina’s parents, Gordon and Bev Schell, were still active on the farm, but handed them the opportunity to step in as farm managers.
“I had never dairy farmed before, but Davina had done the usual relief milking and feeding calves growing up,” Richard says.
“The opportunity gave us a 1-2 year kickstart in the industry as we got to manage the farm with no direct experience.”
Richard threw himself into the role, reading all the farming information he could get his hands on, and attending nearby dairy discussion groups, DairyNZ events and talking with neighbours.
“I did heaps of reading and asked lots of questions. It’s easy to learn if you’re inquisitive and you’re not too proud to ask.”
They consider it took them 3-4 years to learn the basics and another 1-2 years to get the farm performing well.
“On reflection, the things I thought would be hard about dairy farming before we started were easy, like animal health. The vets provided great advice and were happy to share their knowledge which meant I could build up basic skills quickly.”
The opposite held true as well. Richard thought pasture management would be easy, but still sees it as one of the most challenging parts of farming today.
“In striving for top performance you never feel like you ace pasture management. There are so many variables that you are taking into account in decision-making such as season, weather, animals and paddock variations. It’s challenging but is also one of the most rewarding aspects to farming.”
After four years on the farm they wanted to benchmark themselves against similar farmers in their region and entered the DBOY competition in 2012, becoming finalists and winning the best financial performance for a medium input farm.
“It was a great opportunity. In addition to diving deeper into our own physical and financial results, we got to spend time with other like-minded people in a finalists workshop session, discussing the results and comparing to other businesses.”
After another year spent onfarm, the couple went looking for their next challenge. In assessing their strengths and industry dynamics they decided to merge their dairy experience with Richard’s management roles and seek out a role in a larger-scale business.
Richard took on the chief executive role at Hopkins Farming Group, based in Manawatu. Founders John and Elaine Hopkins had transitioned their own family farming business through multiple equity partnerships into a majority shareholding of a single company.
With a strong base comprising 10 dairy farms, 10,000 cows and support blocks, Richard’s goal for the group was to be in the top 10% for farm performance through doing the basics really well – something he emulates in his own farming business.
“We had an aspiration to be as good as a top owner-operator. We set about doing the basics really well around pasture management, animal health, our people, the environment and being disciplined around financial management.”
The business environment had changed which made this easier to introduce.
“John had been really successful in identifying opportunities to acquire land, grow the business and bring investors and staff along with him. The challenge I saw for the business was how to remain successful in a changed environment post the global financial crisis with land prices flat and changed expectations around environmental and health and safety management.”
While Richard was leading the Hopkins Farming Group through a transition from the founder to external management and bringing in a more modern approach, the couple continued to run their Te Aroha farm remotely.
After five years in that role and having achieved what he set out to do with Hopkins Farming Group, Richard and Davina left Palmerston North and spent 10 months travelling around Australia with their children before heading back to Te Aroha.
They purchased a 4WD and an off-road caravan that had enough water and food storage to allow for two-week gaps between needing to restock supplies.
“We wanted to be set up to spend time in some of the more remote outback and coastal parts of Aussie.”
The trip took them on a 30,000km circuit from Melbourne up the Victoria and New South Wales coastline before heading inland and up the middle through Alice Springs to Darwin. At the top end they headed west out along the Gibb River Road and other iconic routes before travelling down the West Australian coast, through South Australia and back to Melbourne.
“It was a such a neat family experience. We had an opportunity given the age of Josh (12) and Hannah (10) to head off for an extended adventure without impacting their education and while the kids still wanted to hang out with us.”
Financially the trip was within their projected budget and a small price to pay for the memories they created and the time they had together doing something different.
“The main cost of the trip was having no off-farm income for that period. Our living costs were very similar to what we would have had back at home, we sold the caravan for the same price we paid for it and bought the 4WD back to New Zealand.”
Since arriving back home earlier this year they have been managing another small farm owned by Davina’s family and getting the kids settled back into new schools. The 70ha farm is 10km down the road from their own farm, milking 100 cows once a day and running young stock.
Between managing the small farm and oversight of their own farm, there is still time to take on new challenges and from early 2019 Richard is taking up a role with the Headlands Group, working as a farm consultant.
“It’s a logical next step and something that I’m really excited about. I really enjoy helping people and teams achieve good results.”
He will be drawing on his own track record in managing small and large-scale business within and outside the dairy sector.
“Depending on what clients need I’ll be supporting them around business strategy, management, governance or succession. These are the areas I have had a direct experience in and can bring practical ideas that will add value to their business.”
Maintaining good farm performance with absentee ownership
Being off farm for much of the past six years Richard and Davina have had to implement new ways of thinking to ensure their farm business remained profitable.
The couple have been DBOY finalists twice for their 220-cow operation at Te Aroha. The most recent result was achieved as absentee owners.
Richard believes there are four key things that have helped their farm performance remain strong while they have been living off farm.
“We realised early on for the move to Manawatu to be successful we had to recruit really good people, step up the governance of our own business, set in place clear goals and build on our systems and processes.”
Recognising that a farm management opportunity on their small farm was not necessarily going to attract a lot of job applicants, they created a role with true management responsibility.
“We spent time thinking about what the role could offer applicants, what we needed and what we had enjoyed about farming ourselves.”
“There is a huge range of responsibility in manager roles,” Richard says.
“Many roles have herd manager type responsibilities with a manager title. Given we were living away we needed a manager who would thrive on the responsibility of managing feed, contractors, staff, working to a budget and approving invoices. We thought it could be a great stepping stone into larger scale management roles, or contract milking.”
They had a proven farm system and a farm consultant who had been involved with the farm over several years.
Staff do a weekly farm walk which farm consultant Chris Pike has access to. Chris has been a consultant to the farm for 15 years and has a great understanding of the property to fine-tune feed budgets, offer advice and feedback to the farm manager.
“Chris provides feedback and suggestions to support the manager to get a good result. It’s good for us to have an independent set of eyes over the farm and good for the manager to have a sounding board.”
The DBOY competition has been an opportunity for their staff to be involved and boost their own career development.
Their manager during the 2016-17 season, Marion Reynolds, has gone onto to manage a farm for her partner’s family milking 850 cows near Otorohanga.
The DBOY competition analyses farm performance including physical and financial outcomes. It’s an opportunity to compare yourself as an owner/operator and then have a good conversation with staff about the farm business, Richard says.
Richard and Davina catch up with their current farm manager Blair Fine for monthly meetings to go through farm and financial management. Blair has an interest in improving his financial skill set so spending the time involving him in the farm budgets, forecasts and having him approve invoices helps him have a better appreciation of the business aspects of farming.
They were not willing to compromise on performance and wanted a culture of no excuses.
“We needed to consider risk and how we could keep the farm running well if staff were off work for any reason. We weren’t going to be able to step in and help out.”
They decided their business would be more resilient with permanent employees rather than casual staff, a move they believe has paid dividends.
As a result they have a relatively high labour cost and a low number of cows/labour unit compared to other finalists on larger scale properties. The farm has a labour efficiency of cows/full time equivalent of 113, with a farm manager and fulltime farm assistant, working out at $1.20/kg MS labour cost.
Added to their decision about staffing levels is the value they place on offering a role that provided good balance between work and play.
“We want our team to enjoy the lifestyle of farming and be rewarded for good performance.”
Everyone is motivated by different things, so rewarding for performance has changed over time. The current structure is a cash bonus based on a number of KPIs that can be objectively measured. There is a sliding scale rewarding for ‘at’ and ‘above target’ performance.
For example, the target for the average somatic cell count is 100,000. The top bonus is for getting the somatic cell count under 90,000, but there is also a bonus for being under 100,000 SCC.
The KPIs cover everything from weekly farm walks, the effluent pond being empty at certain times of the year, to the six-week in-calf rate.
“We like to make the KPIs achievable so they are motivating. We set them with the manager and review them at the end of each year for changes to ensure they are fair and reasonable.”
Another key part in driving the business success has been implementing good governance practices. During their time in Palmerston North Richard and Davina completed the DairyNZ Rural Governance programme.
“Earlier on we had been too busy working in the business and always found excuses for not setting aside time for formal governance. We didn’t have any debt and weren’t accountable to anyone else which made it easy to put it off (governance).”
They recognised this as a weakness in their business and set about making change. Doing the DairyNZ course together has been of real benefit. They are now much clearer on their longer term business and family goals, and have put in place simple processes that provide the discipline and some really effective tools that improve decision-making.
“We are focused on performance and having a sustainable business that is resilient and can survive in the future. Having an annual governance calendar, and regular meetings focused on the business makes us feel like we are more in control of our journey.”
Having goals and objectives in place for the business and staff keeps the focus on what’s important in achieving good results. For the 2018-19 season the business goals are to (1) run a sustainable business on a $4.50/kg MS cost structure, (2) achieve 75% 6-week in calf rate, and (3) consistently use third-leaf grazing principles in pasture management decisions.
Their operating expenses are creeping up, which is a concern.
The cost of production keeps going up largely because they are spending more money on pasture renovation in an effort to improve pasture harvest, Richard says.
“We are spending more money to stay still, it feels like we are treading water. Pasture harvest is the one we are struggling with the most, it’s our biggest challenge and our biggest opportunity.
“The pastures appear not to be lasting. They look good for the first two years, but they’re only lasting three or four years before needing some intervention. We are harvesting about 13.5 tonnes drymatter/ha, but we believe the farm has potential to harvest another 1t DM/ha.”
The farm has fertile sandy loam soils and a favourable climate, catching the rain off the Kaimai Ranges in the summer. They soil test every two years and put on regular maintenance fertiliser based on the soil test results.
They follow DairyNZ advice for best practice when it comes to pasture renovation, as well as pasture management which is critical to maintain pasture quality and quantity. Farmers are always aiming to ace that pasture management.
When you get pasture management right it’s like catching a perfect wave when you’re surfing, Richard says
“If you go to early or too late the wave is hard to catch, but when you get it right it feels easy, like you’re on the top of the wave.”
If your round is too slow and pre-grazing covers too high then residuals are really hard to hit, impacting next-round quality. Likewise if the round is too fast, covers decline and growth is impacted which, if you don’t react quickly, can lead to a long hard climb out of the hole back to good average covers.
Developing good systems and processes has helped transfer their own knowledge and retains knowledge from other staff. They have a planned approach to areas such as budgeting, forecasting, cropping management plan, financial reviews, and machinery maintenance.
Having a plan and keeping records helps keep the knowledge in their business rather than leaving it with staff or relying on memory.
“We have an approach around key activity where we like to plan and then after the fact, do a review. That way we are keeping the knowledge for what works updated and current. A recent example of this is our cropping plan. It’s a step-by-step guide to what needs to be done and when around our maize and chicory crops. Having just finished planting, we have reviewed what worked and updated it to reflect changes around how we apply slug bait.”
Owners: Richard & Davina Syme
Location: Te Aroha
2018-19 production target: 100,000kg MS
Farm System: Dairy NZ system 4, feeding maize and palm kernel
Nitrogen leaching: 33kg N/ha
Pasture harvested: 13.6 TDM/ha
Farm dairy: 24-bail rotary; ACR, automatic teat spraying
DBOY 2018 Key Performance Indicators – Syme Ag Ltd (2016-17 season)
Milk production: 431kg MS/cow, 1621kg MS/ha
Return on capital: 4.8%
Operating profit margin: 38.7%
Operating profit/ha: $4377
Cost of production: $3.61/kg MS
Operating expenses: $4.28/kg MS
Pasture harvested: 13.6t DM/ha
Pasture % of feed: 66.5%
Core cost per cow: $565
Labour efficiency cows/FTE: 113
Environment Score: 10/15
HR Score: 6.2/15