$20 million gives new life to clapped-out farms

Before attending the opening of the new dairy academy on one farm, guests toured Pineview, a farm on the plateau near Reporoa. 

Pineview is one of 16 farms in the North Island bought by Shanghai Pengxin. This is one of four farms near Reporoa; the others are in Waikato, Taranaki and Manawatu. Shanghai Pengxin also owns 13 dairy farms in the South Island.

Visitors were bussed to Pineview and, from under umbrellas, saw changes made there and on the other farms.

Pineview runs 1130 cows on a 385ha milking platform, producing 461,000kgMS. The irrigators were going during our visit but good, unseasonal rain has helped the grass grow well. The farm looks in good shape.

Heading the tour party was Terry Lee, now the managing director of NZ Milk and president of overseas investment for the Pengxin Group.

Lee told Dairy News of his pride in the farms' rapid improvement: $20 million of new infrastructure including 300km of fencing, 900 water troughs, 1500 gates, four houses, five effluent ponds and two cowsheds.

"We did everything we could to improve the farms, including improving animal welfare and taking care of the people who work there. We have achieved a lot with the help of Landcorp, our joint venture partner.

"We see the farm as an asset, but the real asset is the combination of farm and people. Without good management and people the farm is not going to produce to its capacity.

"We want to be a good corporate citizen in New Zealand and the care of people and animals are most important to us," he says.

Lee came to NZ with his family in 2003 and says he enjoys the clean green nature of the country and the friendliness of the people.

Pengxin NZ Farm Group chief executive Andy MacLeod says the North Island farms were dilapidated when his organisation took them over. (The South Island farms they bought from Synlait in 2014 were much better.)

An immediate, sharp focus on the North Island farms after the takeover improved animal welfare and staff accommodation. Landcorp, the North Island farm sharemilker, quickly nipped problems in the bud. Now performance and productivity are trending in a "pleasing way".

Pineview shows some signs of its past -- old water troughs and sheds stand alongside new purpose built sheds and fences. There's a new effluent pond and rotary milking shed.

But, like Lee, MacLeod is people focused.

"It's very easy to put people in a bus and show them a nice new shed etc. There are four farms up there on the plateau and two are old herringbones and they have a long term future. So it's not all about new sheds and effluent ponds, it's really about the people and having good accommodation for the managers and their partners who live here. We need to keep them safe and well."

MacLeod says the company does not intend to 'gold plate' the farms, but rather to bring them up to a profitable and sustainable level which complies with all rules and regulations.

'We don't need to own every cow'

All told, Shanghai Pengxin owns 29 farms (16 in the North Island) and runs 30,000 cows on 12,000ha, producing about 19 million kgMS annually.

Landcorp recently gave notice that it would not seek to renew its North Island-farm sharemilking contract with Shanghai Pengxin when it expires in May 2017. The length of notice given by Landcorp is most helpful, says Andy MacLeod.

"Normally we wouldn't have been told this until December so we have well over a year to plan that transition.

"The fact is we are already milking 18,000 of the 30,000 cows, and we have good skills at Purata in the South Island where our farms are located and among our staff in the North Island.

"I have told my masters that we don't need to own every cow and the share milking model is a good one that's worked well for years."

But MacLeod acknowledges that the present volatility in the dairy industry makes it hard for sharemilkers. New contracts that take into account such volatility may be necessary in future, he says.

Sharemilkers stays, reaps rewards

Anthony Kiff joined Landcorp immediately after the Crafar farms came into Shanghai Pengxin ownership and Landcorp took over as the sharemilker. He now manages Pineview and says there's been massive improvements since he arrived.

"When I first came here it was challenging and trying. I spent a lot of hours in the shed due to the poor facilities -- a 64-aside herringbone where you could only cup about 55 cows at a time. We were spending about six and half hours in the morning and at night because of the design.

"Our accommodation you could say had eczema because the house was not maintained and was run down. But after a year they got things back to a good standard."

Each paddock had only one water trough, now there are two, Kiff says. These upgrades have made a huge difference for him and his staff.

"With the better facilities I'm able to upskill and educate my staff.

"That's been the biggest bonus for me personally – spending time with the staff and teaching them new skills and not making them into glorified milkers."

Kiff is a local lad who first worked for Alan Wills, the local Federated Farmers president and a highly respected dairy farmer. Kiff credits Wills with teaching him a lot of the skills he has today, which he is now passing on to his staff.