Canterbury couple Simon and Alex Ferguson are making the most of the "stepping stone" provided to them by the nation’s largest farmer to get ahead in dairying.
They became variable order sharemilkers for Pāmu Farms of New Zealand (Landcorp Farming Ltd) at its Waimakariri Farm in June.
As variable order sharemilkers they pay a percentage of certain costs, including those of staff and their own, and maintain, fuel and service machinery, such as tractors, silage wagons, motorbikes and utes, in exchange for a share of the profit.
Unlike usual arrangements, they have also been allowed to buy half of the 1000-cow herd.
Mr Ferguson said they were grateful to graduate from contract milking previously in Dunsandel to the new role.
The offer to have more skin in the game and combine with a like-minded business partner had been an easy decision.
"We have been very fortunate as we bought half the cows. This allows us to build up our equity base towards our ultimate goal of farm ownership."
Their cows are leased by Pāmu, which holds the right at this stage to retain the young stock.
"Hopefully we will be in a position to buy the other half of the herd and then go full 50:50 sharemilking. Once we go 50:50 we would have full control of the cows."
Had the Pāmu opportunity not come their way they are unsure where they would be now.
"I honestly don’t know. Maybe sharemilking a smaller herd?
"It’s quite an amazing opportunity we have been presented with. Not many farms would have the scale or opportunity to buy half the herd and then slowly increase equity to go 50:50 on a farm this size.
Having to shift their family of two young children to another farm to achieve this would have been disruptive.
Instead, the Fergusons were the first of four groups of young farmers offered dairy contract options by Pāmu for the 2025-26 season.
Mr Ferguson said the stepping stone had greatly benefited them and was beneficial to Pāmu.
"Every decision we make is — because we share in the cost — not just for our benefit, it benefits the farm. So we are not going to spend a dollar to make 80c. We won’t mine the place because this is such a fantastic opportunity we want to do well for ourselves, but also want to work so they keep doing it and give this opportunity to other people coming through the sector. We don’t want to grease the pole behind us."
Their milk production budget is 430kg of milksolids per cow and they are hoping to hit 450kg. That amounts to 1400kg a hectare on an effective milking platform of 330ha.
They are sitting about 6% ahead of the same stage last season despite a challenging spring on the self contained unit.
A good supply of winter feed has helped them hold off putting the cows back on the main milking platform.
The spring rotation planner was the largest lever a farmer had to set them up for the year, he said.
"If you nail your spring the rest of the season falls into place really."
Appealing to Pāmu was the Fergusons’ track record of practical on-farm leadership, getting the basics right to lift milk production while improving their environmental performance and keeping animal welfare top of mind.
Previously based at Ferguson Dairies Ltd in Dunsandel, they were contract milking 1250 cows on 312ha.
As operations manager at Cumberland Dairy Farm Ltd, an 18% lift in earnings before interest, taxes, depreciation and amortisation (Ebitda) was achieved through better feed efficiency, proactive maintenance and a reduced reliance on contractors.
Graduating from Massey University, he was previously a farm investment manager at FarmRight Ltd, while Mrs Ferguson was an agri manager at Ravensdown after getting an agriculture degree at Lincoln University.
Both of them were regional finalists in the Young Farmer of the Year competition — he finished third in 2018 and she was a finalist a year later.
Pāmu has just announced more contract opportunities on another four of its farms for the 2026-27 season.
That brings to eight farms the state-owned farmer has herd-owning share milking, variable order share milking or contract milking roles among its 44 farms.
Chief operating officer Will Burrett said three dairy properties near Taupō and another on the West Coast — ranging from 950 to 2100 cows — would come under contract, lower order, or herd-owning share milking.
“These are great opportunities for those with ambition in our ranks or those already in the industry who are keen to build equity, progress in their careers and eventually purchase their own farm."
The contracts begin in February for two of the Taupo autumn-calving farms and the start of June for spring-calving farms at Taupō and Somervilles on the West Coast.
Pāmu is also offering an equity opportunity for livestock farmers on the East Coast sheep and beef farm, Mahiwi Station.
In the meantime, the Fergusons are saving as hard as they can to buy the rest of the herd.
Mr Ferguson said a high payout was helping, despite high costs taking a good slice of the pie.
The ultimate goal of farm ownership would ideally be on land with good water and soils.
"With Pāmu, what sealed the deal was the ability within the organisation itself and access to innovation like the synergised beef that’s coming through, methane reduction and reducing the bobbies. That’s all stuff we believe in, but in a private equity situation would be tough to have a go at. They understand this is a stepping stone and are excited to provide that stepping stone for people in the industry."
