Career path to ownership changing

There is a shortage of 50/50 sharemilking jobs within the dairy industry, which may prevent some dairy farmers from pursuing their farm ownership dreams.

However, the ''transition to farm ownership is not dead, just changing'', says Agfirst Waikato Ltd consultant/managing director James Allen, of Hamilton.

A typical career path for dairy workers once had clearly defined steps: from farm worker to farm manager and contract milker, then to 50/50 sharemilker and then farm ownership.

Now, there are fewer 50/50 jobs available nationwide so career-minded sharemilkers are looking at other options to achieve their goals.

DairyNZ developer (people and business) Carolyn Bushell said New Zealand Dairy statistics showed the number of 50/50 jobs was decreasing.

During the 2008/09 season, Otago had 98 50/50 sharemilker positions while Southland had 154. By 2012/13, Otago had 65 and Southland had 145, she said.

For the same period nationwide, the number of 50/50 sharemilking jobs had gone from 2418 to 2229. However, the number of variable order sharemilkers for Otago for the same period had gone from 82 to 119 and from 161 to 217 in Southland.

Nationally, the number had risen from 1760 to 1951.

''Many previously sharemilking jobs have been absorbed by variable order and contract milking jobs,'' Mrs Bushell said.

Mr Allen had studied the decline in 50/50 sharemilking positions.

''The number of farms is decreasing through amalgamations and that has continued for a few years,'' Mr Allen said.

''The corporate and equity partnership farms are tending towards putting in contract or lower order milkers.

''Looking at Canterbury and Southland, there is a more noticeable shift away from 50/50 positions to contract milking and equity partnerships and also to more lower order and contract milking jobs.''

An increase in average debt levels for both farm owners and sharemilkers, and therefore higher cost per kg of milk solid, could also contribute to the lower numbers of jobs on offer.

''Taking a larger 50/50 sharemilking position was still the best option to consider. The next best option is larger scale lower order job. They can pay rather well and should be considered.''

In addition to equity partnerships, sharemilkers should also look at leasing farms.

''They get 100% of the milking income, but buy all the stock and machinery and pay an annual leasing fee. The average [fee] is about 20% of farm income just to lease land, which is expensive.

''Some young guys are getting more creative and staying in a small job but taking on a second lower order or 50/50 job.

''That is great for them and can work quite well but if we are looking at 50/50 job availability, if someone has three positions, that is taking away two from someone else.''

People could also look outside the farm for opportunities to invest, including property rentals, Fonterra shares, support blocks and run-offs,There were also large scale operation management jobs.

Mrs Bushell said DairyNZ offered programmes for dairy farmers and workers so they could decide the best way forward for them.

 


Programmes for dairy farmers and workers

 

DairyNZ offers several programmes for dairy farmers and their workers. These include Biz Start and Biz Grow programmes, which are designed to help identify goals and learn how to effectively weigh the pros and cons of different options.

Other tools include Mark and Measure courses, which give 50/50 sharemilkers and owners an in-depth understanding of business performance, planning and strategy, benchmarking and lifestyle balance.

DairyNZ offers budget templates and workshops, as well as calculators designed to work out investment levels for particular jobs, tool kits for managing conflicts and decision-making matrixes to work out how a move or new business structure fits in with the person's own values and long-term goals as well as strengths and weaknesses.


- by Yvonne O'Hara