The late 80s are remembered as a time of turmoil in sheep and beef farming.
When the crutch of subsidies was kicked away, lamb prices plummeted, interest rates skyrocketed, inflation ran rampant and indebted farmers were forced to sell. Those who stayed cut spending and saw their farms deteriorate. To rub salt into the wounds, some regions were hit by drought. Then the sharemarket crashed and any investments they had left were decimated.
Into the chaos stepped Cliff King. The Wairoa farmer saw an opening for a shrewd investor. Over five years, he and his three partners in Rural Property Trust raised $60 million from Kiwis to buy 60 farms.
Then he decided to concentrate on dairying and for the past 20 years has ridden the coat-tails of the dairy boom. As a co-owner of MyFarm, he has helped 300 investors to buy 45 dairy farms worth $500m.
Now, he reckons the time is right to move back to sheep and beef farming.
"It's just like the 80s," he says, citing international financial uncertainty, droughts, a glut of old and tired farmers and a worldwide shortage of protein. "Back then, suddenly there was an opportunity to invest. Now it's here again."
He has a restless energy and an assertive voice that belies his snowy hair - he admits to being "on the wrong side of 70" - and though he claims to be retiring from business life he has one more project on the boil.
It is MyFarm Sheep and Beef, half owned by his company and half shared between Rangitikei farmers David Marshall and Douglas Duncan.
Already it has four North Island farms on its books - one owned by New Zealanders and the others by a group of a Swiss- German investors - and is offering a fifth in South Waikato to Kiwis.
King says 80 per cent of the early inquiry is coming from urban investors.
He says these farms will be followed by many more. "We have a clear picture of what we want to be owning in five years' time, the number of sheep and where and how we will be fattening them."
Some breeders and finishers will link up for greater efficiencies and some may specialise in growing hoggets for others.
"We're trying to simplify sheep and beef farming," he says.
MyFarm Sheep and Beef's role is to find the farms and attract investors to buy them. Along with the sale comes an initial three- year management contract that can be renewed. MyFarm will invest in improvements, provide the farm's staff and report progress monthly to shareholders.
This is where Marshall and Duncan come in.
Marshall runs the Kelso sheep breed founded by his father, Roger, a sheep and beef finishing farm at Marton and a 1400-cow dairy farm, and is a qualified accountant.
He prepares the management plan for each farm. "We spell out the objectives, give them technical support so they know how to achieve them and then give the responsibility to the managers to get on and do it.
"We're working hard to give managers a feeling of ownership and pride in the outcomes."
That feeling can also become more tangible, with the possibility of a shareholding as a reward for good service.
King says: "We try to be there to help the very capable guy. The investors we get like to see that, too."
Duncan is the owner of one of the North Island's biggest farming enterprises, fattening 60,000 lambs and 9000 cattle a year on three Rangitikei farms.
He is also a drafter contracted to Silver Fern Farms and is on the road continually, visiting 80 to 100 farms a year to buy or to draft. He spends long hours at the drafting gate, appraising sheep or cattle beast by measuring its weight by eye alone and noting its condition. He estimates he sees up to 200,000 sheep and 25,000 cattle a year.
His job in MyFarm Sheep and Beef is to find new properties. "My work gives me an insight into different farms in different areas, where good stock comes from and where it doesn't," he says.
King describes Duncan as "not just hands-on but hands- everywhere-on".
"He knows every market every day.
"We're not analysts, commentators or funds managers. We've all got our gumboots on and we're in the paddock. It takes that kind of commitment to ensure there's no margin for error now that land is so expensive."
He says his "core strength" is the ability to identify the right farms for the right business reasons.
"Sheep and beef farms tend to be more tightly held. Good land is owned by the best people, and they've been there for generations. Hence we have to be alert to opportunity and we must be very clear on the sort of criteria a farm must have to make it profitable. There's some pretty high hoops to jump through before we say 'Let's have a go at that one'."
The ideal property is one in need of a financial shot in the arm to deal with deficiencies such as soil fertility, animal genetics, subdivision, water, stock handling and access.
Ngaponga, the 630-hectare South Waikato farm currently seeking investors, will cost $8.2m - $6.6m from investors and $1.6m of bank debt. It will have $1m spent on improvements and the forecast is for a 15 per cent increase in production within three years.
This scale of performance will take it into New Zealand's top 10 per cent of sheep and beef farms and on a par with dairying for return on capital, exactly where King aims to be. "That's where we live, it's the air we breathe," he says.
Marshall sees the use of clover with high-protein herb plantain as a crucial recent breakthrough, increasing lamb growth rates by 125 per cent compared to ryegrass feeding at certain times of year.
He says the sheep industry's big advantage is its low cost of production, $2.60 to $2.80 a kilogram of meat and wool, compared with $4 to $4.50 a kilogram of milksolids for dairy.
"It means we've got more flexibility to use new technology, such as understanding how to get the best out of plantain and clover and using it at the right time to get a specific outcome. For example, we used it very effectively on one of the farms to ensure we had good condition scores across all ewes at mating."
King says an important aspect of the business plan is certainty from forward sales contracts for lambs. The budget for Ngaponga shows an average lamb price for the year of $5.87/kg. "We're rewarded for loyalty, for guaranteeing to supply certain numbers of lambs at times of the year when other farmers can't," he says. "That deserves a premium."
He is looking forward to reliving the heady days of 30 years earlier, when he scooped up sheep and beef farms that had fallen on hard times. "It's the 80s all over again. The instability of the financial markets has created opportunities and at the same time we're seeing a world shortage of lamb."
It is coming as farm owners are getting older and jaded. "There are a lot of farmers on the wrong side of 70 who have been through some major droughts and are deciding 'I don't want to run that extra 3000 or 2000 stock units and I don't want to be cropping, I just want to take an easier route and enjoy a comfortable lifestyle'.
"Meanwhile, technology is marching on and that creates an opportunity for someone to buy that property, put the necessary capital in - renew the pastures, improve the genetics, build that bridge, apply that fertiliser - and 'Hey presto'."
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