Taking Stock - Sam and Fleur Tonge

Taking Stock has been part of Subtropical Dairy and Dairy Australia’s critical response programme since the early 2000’s, particularly through key events such as drought, feed shortages and natural disasters such as floods and fires. In summary, Taking Stock is a free consultation from an experienced advisor to assist dairy businesses map out a pathway forward. It is designed to help farmers to assess their situation, work through options and identify actions to take. They are confidential and personalised to individual circumstances. Traditionally, they have been deployed when businesses are experiencing challenges, whether that is from the perspectives of physical, financial or people issues. Today, however, they are being taken up by more farmers to mitigate risk and avoid problems.

This article tells how one northern NSW dairy business recently undertook a Taking Stock consultation at a critical juncture in their business. It helped them to develop a strategy and make some difficult decisions before the situation deteriorated beyond their control.

Sam and Fleur Tonge are well-known and well-respected farmers on the Far North Coast of New South Wales region. The land they farm has been a dairy for about 110 years. When faced with a decision that could see the dairy close for good, they felt they needed to get some advice to check and guide their thinking.   The farm normally has a highly reliable water source from Toonumbar Dam. But after an extremely dry year, with their property receiving less than half of their annual rainfall and Toonumbar Dam approaching 20% capacity, they reached a point where it was time to plan for the possibility that  their business would have to operate with no irrigation and historically high bought-in-feed costs.

In an average year, the farm relies on about a metre of rainfall along with irrigation through key periods to run a pasture-based system. Sam and Fleur contract  their grain supply months ahead in an attempt to manage their margin over feed costs (MOFC) and budget accordingly. They are also very proactive in measuring and managing their animal health and performance issues in their herd. They have also used a variety of nutrition programmes over the years, but after participating in an  advanced nutrition course delivered by Subtropical Dairy, they have been using the Rumen8 programme to develop and review feed rations.

In November 2019, with weather conditions deteriorating and with the possibility that irrigation would be restricted, they ran a number of simulations through Rumen8 to see how they could maintain a cost-effective diet for the milking herd. After analysing these alternatives, one of the possible scenarios they were facing was to close the dairy. This would have ongoing consequences for their future cash flow, their employees, and the local businesses they support. Another alternative was to totally exhaust their feed reserves and increase their debt. This had the potential to create a vulnerability if the following winter proved to be very wet and difficult. Both of these scenarios would have long term ramifications for their daughter to potentially be involved in the business in the future.

Given this situation, they decided it was timely to get external advice to assist them with their decision making. Hence, they approached Subtropical Dairy to fund a Taking Stock consultation with a senior experienced local consultant with a strong understanding of production figures and experience across a wide range of dairy farming systems.

Both Sam and Fleur found the Taking Stock consultation very valuable. Having an unbiased, independent perspective allowed them to have a frank and open conversation, specifically about their situation, their future and their options going forward. The Taking Stock consultation involved a full assessment of their aspirations and the farm, including their feedbase and herd’s performance. They also went through the scenarios they had developed including their diets and farm costs. The follow up and feedback included testing probabilities of scenarios such as rainfall outlooks and forecasts, dipping into feed reserves and short-term financial options. The process allowed them to challenge their thinking and come up with options that would allow them to continue dairying in the longer term with the least impact on their feed and financial reserves.

After the Taking Stock process, Sam and Fleur felt more comfortable and were able to arrive at a compromise strategy that suited them both. They had confidence in going forward that a sound and logical plan had been formulated. With different decision-making styles, having an experienced adviser to guide the process gave the Tonges opportunity to find some middle ground without putting their personal relationship at risk.

The Taking Stock programme is available to address the needs of dairy businesses, including physical, financial and people issues. This could include:

• Feed options, planning and budgeting (including irrigation options);

• Managing a fodder shortage;

• Herd decisions and animal health including reproduction;

• Managing cash and budgeting;

• Managing your farm team during tough times;

• Meeting with your bank.

What is in it for you?

• A fully funded three to four-hour confidential consultation on your farm with a trained consultant;

• An action plan tailored to your farm with potential areas of improvement to consider;

• A follow up visit with the consultant after the Taking Stock visit.

What will you need to do?

• Prepare for your consultation and consider what you would like to discuss;

• Commit three to four hours to meet with the consultant, plus some time to prepare beforehand;

• Ideally, all key decision makers in the business will take part in the Taking Stock process;

• Contact a member of the Subtropical Dairy team to get a Taking Stock organised.

We thank Sam and Fleur for their thoughts and contributions to this case study. Taking Stocks are confidential between the client and the consultant, with no figures or specific data shared with Subtropical Dairy or Dairy Australia without the participant’s permission.

If you, or someone you know requires help or could benefit from a Taking Stock, please reach out to any of the Subtropical Dairy team members to get you started.