Farm Ownership: Sweet succession for dairy farming duo

Victorian dairy farmers Adam and Natalie Roberts are achieving their business dreams on the back of sophisticated ownership strategies and strong banking relationships.

Adam and Natalie Roberts epitomise the best qualities of Australia’s dairy farmers.

 

Smart, innovative and resilient, the couple have embraced progression and ownership pathways to take over and successfully run two family dairy farms in Victoria – one in Timboon and the other in Camperdown. They milk up to 900 cows.

 

The Roberts are carrying on a long family tradition. Fifth and fourth-generation dairy farmers, respectively, Adam and Natalie have been on the dairy industry’s rollercoaster ride in recent years.

 

A 2016 fracas – whereby major producers slashed milk prices for farmer-suppliers and demanded the payment of ‘clawback’ debts – forced many farmers to quit the industry.

 

However, Dairy Australia’s Situation and Outlook Report for December 2021 suggest the 2020-21 season has been one of most profitable for Australia’s dairy industry in recent years, providing confidence for the Roberts family and their fellow farmers.

Put succession planning on the agenda

Early in his farming career, Adam pledged to own a dairy farm by the age of 40. Now in his early 40s together he and Natalie own two, thanks to an inspiring story that highlights the value of succession planning in multi-generational farming families.

 

Adam started as an apprentice on his family farm aged 15 and bought the business a decade later through a leasing and succession planning deal. In 2016, he and Natalie used the same process to buy the dairy of Natalie’s family. But within a month of buying the second dairy, the milk clawbacks left the industry reeling.

 

Drawing on years of industry experience and a dogged passion to keep growing, Adam and Natalie have weathered the challenges and have one key piece of advice for other farmers – engage an independent expert to assist with funding and purchasing arrangements and approach them on commercial terms that set out the precise rights and obligations of all parties.

 

This is where Westpac comes in, having been all in for the duo throughout their dairying journey. Westpac funded the land purchase for the Timboon property in 2005 and has been Adam and Natalie’s bank of choice ever since.

 

“They’ve always been supportive of our growth and ambitions, as well as always being approachable and across the industry,” Adam says. “You can discuss milk prices and grain prices with them because they have a handle on both.”

Count on trusted banking partnerships

Such an enduring agribanker relationship is highly valued within farming communities and is not unusual for Westpac. Eighty-seven per cent of Westpac’s agribusiness customers have been with the bank for more than a decade.

 

Tim Foley, a Senior Relationship Manager with Westpac, has worked with the Roberts family for almost a decade and says Westpac understands the unique needs of its agricultural customers.

 

“We can’t just look at a client in a three- or five-year window. We’ve got to look longer term and that’s what we do with our agri clients, so we can help them out during the tough years. We really want to be a partner in our clients’ businesses and to grow with them.”

 

Tim adds that Westpac has been recruiting a number of younger bankers to join its team of experienced ‘old hands’ who are working in areas where they grew up, which gives them a greater understanding of the communities and clients they serve. In his case Tim grew up in Colac, southwest of Melbourne, and continues to live and work in the area. The bank has also been conscious of bringing more women into its agribusiness division, with female numbers rising 17 per cent since 2019.

 

Westpac’s approach contributed to it being named Bank of the Year – Agribusiness 2021 by Canstar. The award recognises the value proposition that Westpac provides to its agribusiness customers through highly competitive lending products, as well as the provision of agriculture-specific banking facilities and services.

 

Adam says managing farm ownership with Westpac’s help through share-farming and leasing deals prior to purchase has made the process easier. He also values having continuity of relationship managers.

 

“We go to Tim now and he’s already across what (we’ve) been able to do in the past and where we are going in the future. During the clawback, the first person I rang was Tim  and he knew where we were at and helped develop the plan moving forward.”

Recruit and train the best people

The dairy industry is Australia’s fourth-largest rural industry, generating farmgate production value of about $4.4 billion and producing more than 8.8 billion litres of milk a year.

At its heart, dairy is a people business. In addition to strong banking relationships, Adam and Natalie have benefited from an insistence on recruiting and retaining the best possible people for their dairies.

 

“Staff have always been key throughout – finding the right people has been crucial for the whole operation,” Adam says.

 

And there must be give and take. The Roberts’ staff are expected to work hard and be loyal to the business and, in return, the couple vow to keep educating and training their employees, creating interesting opportunities for them and having their back.

 

“We want them to feel as though our business is their business and if they want to progress within that business, we need to make pathways for this to happen,” Adam says.

 

Tim urges other family farming operations to pay attention to such pathways, including through succession planning. “It can’t happen overnight. The earlier you start planning for the future the better you’re going to be.”

 

Whatever happens, he is confident that the Roberts family will thrive on the back of smart planning and a passion for the dairy industry.

 

“You’ve got to grow at a rate that suits your operation. And it’s testament to them to have been able to plan and create wealth and equity through improving their overall farm operations and being able to produce really strong cash profits.”