ANZ senior relationship manager Ben Muir, of Invercargill, spoke at a DairyNZ field day about his part in the expansion of Birgit and Jon Pemberton’s dairy platform in Southland.
The value of the Pembertons’ existing 141ha dairy farm in Brydone and newly acquired neighbouring 116ha organic sheep farm they were converting had a total land value of about $8.3 million.
Conversion costs including the installation of a milking shed, feed pad, effluent and solar systems were about $2.85m.
The conversion was funded by cash flow from the Pembertons’ farm business, the sale of cows and finance, Mr Muir said.
To get finance approval required consent approval, development costs including a contingency fund, a signed contract to building a dairy shed, an unconditional agreement for the purchase of the sheep farm, and a business plan including budget and cash flow.
"Prior to approving funding, the bank likes to have certainty."
A farmer needed to know the risks of a land-use change and to have a plan to mitigate them.
"It is important for us to have confidence that what you say can be done."
A business needed to "stress test" its proposal to explore how low commodity prices and higher costs and interest rates could impact it.
A project to change a land-use needed to include people with the skills to progress it.
"Surround yourself with good people."
