Hard sheep and beef yards pay off
A sheep and beef farm that can compete with dairy for return on investment - now, there's a rare beast.
Buoyant milk prices and the rush to capitalise on "white gold" have combined in recent years to put sheep and beef farmers in the shade of their dairy country cousins.
But some sheep and beef farmers are bucking the trend. Don McCreary, who owns the 1201-hectare rolling hill property Peninsula north-east of Martinborough, has achieved an exceptional average return on assets of 9.3 per cent over the past four years. His efforts wererecognised with the award of the 2014 Keinzley Agvet Wairarapa Sheep and Beef Business of the Year.
The judges described McCreary as a young man with an "unbelievable capacity for hard work" who showed a very good understanding of what it was that made the farm money.
McCreary's partner, Anna Johnston, vouches for his willingness to do the hard yards. "He won't quieten down. He has plateaued a bit recently but he still works late," she says.
The laconic McCreary admits to putting in a 10 to 11-hour day, sometimes seven days a week.
Being gluttons for punishment is a trait that appears to run in the family - his father Rob used to shear sheep between milkings, while his brother, who runs an agriculture contracting business and fattening farm, is known as "Midnight Mike" for his hard- working tendencies.
It is a relief to hear that McCreary takes time out occasionally for leisure activities, such as skiing on Mt Ruapehu or taking part in the arduous Coast to Coast.
Farming is in his blood. His grandparents on his mother's side were Masterton dairy farmers, while his parents own a dairy farm near Lake Wairarapa, where McCreary junior sends his hoggets for lambing.
Ten years ago, aged 22, McCreary took over the management of Peninsula, which his parents bought in 2001. "They had visions of succession so they bought the farm. I got the option to run it and I came back from overseas, where I had been working for a building company. I was just about ready; I had spent one and a half years away," he says.
"It was a 'turn-key' property when I bought it - you could move in and everything ran. It had good infrastructure, and fertility levels were up, but it needed maintenance. It has naturally fertile soil but by applying fertiliser it will respond quickly."
In addition to the home block, McCreary bought neighbouring 524ha Arohanui in 2010, and the 40ha Takapu flats in 2011. The latter, planted in plantain/chicory pastures, allow him to fatten lambs, transforming the business from a store property to a predominantly finishing one.
Sheep predominate; total stock numbers are 11,694, of which 675 are a "fruit salad" mix of South Devon, Hereford and Angus cattle. The sheep are high-performing Romney from a "composite" base.
For McCreary, it's all about reaping the rewards from higher than average investments, but also careful targeting. Every decision is a calculated one.
The award judges made the point that McCreary is a successful allrounder for whom "every string is in tune". Every aspect gets attention: soil health, pasture production, grazing, feed, animal health, stock performance, farm labour, marketing, cropping, accounts and asset management.
The low ratio of labour to stock earned plaudits. McCreary, a stock manager and a part-time employee run the 11,694 stock units, a ratio of one person to 5200 animals. This is 37 per cent more stock managed than other similar farms, making a saving of $36,000 a year.
"The labour is a simple system - when you do a job and add half an hour on you manage to do a lot more," says McCreary.
Besides hard work, the success of Peninsula rests on McCreary's willingness to invest significant sums into key parts of the farm. His fertiliser spend per stock unit is $16.54, compared with an average of $9.42, allowing him to finish more stock during summer and to be more resilient during dry periods.
"Fertiliser is a tried and true response with full economic analysis. Over a five-year period it more than stacks up. If you've got a multimillion-dollar investment, you've got to tick all the boxes," McCreary says.
"I apply fertiliser every year. Sulphur is the most important because you can't bank it, it leaches through the system. It will be used up in a year. On the other hand, phosphorous is the big one and you can bank that a bit."
McCreary also invests heavily in feed and re-grassing - about $177,000 a year over the past four years, or $100,000 more than the average property of this size and class. About half of this is spent on grazing his 1450 ewe hoggets on his father's farm. One of the benefits is that he can then carry a high proportion of finishing stock over summer and into autumn.
Animal health is important. McCreary spends $3.62 on each stock unit per hectare, compared with an average of $4.32 for his type of land. One of the key differences, the judges said, was his superior stock feeding.
All this effort adds up to higher returns from each stock unit. In the 2012-13 drought year, the Peninsula's income from each sheep and cattle was $103 and $77 respectively, as a result of a higher reproductive performance and the fact a greater proportion of stock could be finished. Both figures are significantly above average.
Johnston helps out when she can. She works fulltime at Masterton company Seminis, which contracts farmers to grow seeds for export. Right now she is helping send pea seeds to Hungary, where they want them "yesterday".
"I'm off a sheep and beef farm. I wouldn't want any other life, wouldn't want to live in the city. I work on the farm in the busy times, usually during docking in late spring," she says.
So could other sheep and beef farmers emulate McCreary? He agrees they could but says it comes down to their investment profile. He admits to an amount of debt - 30 per cent higher than the average hill-country farmer - but says he has got it "under wraps".
In fact, his overhead costs comprise only 20 per cent of gross farm income, equal to the average.
And what of the future? McCreary's long-term goal is to set up the farm in such a way that he can run it at arm's length. Then, "if there's a good investment I might look at it".
While he hedges his bets over what that might be, one thing is for certain: if it doesn't succeed it won't be for lack of energy and talent.
The Dominion Post