Safety and business growth the goals for ex-mining executive new to farming
RETIRED oil and gas industry executive-turned-sheep farmer Bruce Wood is rapidly marking his mark in his newly adopted industry, amassing 1440ha of high rainfall and irrigated farmland, turning off 9000 lambs annually.
RETIRED oil and gas industry executive-turned-sheep farmer Bruce Wood is rapidly marking his mark in his newly adopted industry, amassing 1440ha of high rainfall and irrigated farmland, turning off 9000 lambs annually.
While the growth and development of Locmaria — the five-year-old cell grazing enterprise he and wife Yolanda run between Hynam and Apsley on the South Australia-Victoria border — has been brisk, growth was not the top aim.
“Safety is our highest business priority,” Bruce told The Weekly Times, a point reinforced by the induction all visitors to the farm complete.
Daughter Sophie Sommerville plays a business support role and set up the farm’s HR policies and procedures. The couple has three other daughters — finance consultant Nina Wood, who sits on the farm’s advisory board; Nicole, a medical researcher, and Stef, a barrister.
The family is determined to create a safety cultural change for the farm’s “team members, contractors and visitors”, Bruce said.
“The attitude within the farming industry to safety is unethical, completely and utterly irresponsible,” Bruce said, noting the high workplace death statistics.
Locmaria has extensive policies, procedures and inductions and staff are encouraged to take an active role in their safety.
Monthly, minuted meetings for the seven staff are also helping to drive change, Bruce said, and investments have been made in the safest possible machinery, equipment and infrastructure.
For example, no quad bikes are used on Locmaria, it’s side-by-sides only; new yards have been built and sheep handlers purchased, while annual programs are run for staff training — all aimed at preventing Locmaria staff from becoming a statistic.
NEW CHAPTER
“I RETIRED at 59 but needed something to do, and always thought agriculture was a good investment,” he said.
“I wanted the investment challenge, I had money to invest so looked at putting part of that into direct investment.
“If you cut out spending on farm developments, agriculture is the best investment we’ve got compared to real estate and financial investments, equities and bonds.”
The family bought a collection of properties near Hynam, an area matching their criteria — rainfall reliability.
The holdings also have 760 megalitres of water licences, all of which will be used for pasture irrigation next year.
Bruce came across cell grazing at the Struan Research Station and through a New Zealand consultant he now employs.
A regular NZ visitor, it occurred to him early on that Australia’s biggest opportunity was to get stock to eat more of the grass grown on farms.
In conventional Australian systems, in average years, only 25-30 per cent of grass was consumed, compared to 85 per cent in comparable NZ systems, he said.
“People here tend to stock for the worst year, and the challenge is for us to eat more of the grass in a good season.”
At Locmaria stocking rates have doubled in cell grazing areas, from around 12.5 DSE/ha.
“Across the properties we’re running 15 DSE/ha,” Bruce said, as not all land had yet been converted to cells. “Advice is we can get that into low-mid 20s.”
Locmaria has five irrigation areas divided into 12 cells of phalaris, rye-grass and clover pastures. Wetter areas are sown to fescues, while drier soils grow lucerne blends.
Each grazing block is hardwired with ringlock fencing and the 12 cells within divided with three-wire, drive-over electric fences.
Stock, along with watering, was moved on a two-six day rotation, depending on feed availability assessed by eye and pasture cuts and are experimenting with drone measurements.
Cell grazing required a sharper focus on aspects like stock water and animal health, Bruce said.
“We keep a sharp eye on soil and fertility levels, soil testing yearly,” he said.
Establishment of the system cost $400-$500/ha, but this was offset by a doubling in revenue and higher stocking rates.
“All our fixed inputs are a function of owning the land and our variables are a function of the number of ewes,” he said.
Cell grazing required planning and “almost a manufacturing mentality”, and although productivity was boosted, labour demand and inputs were also raised.
“You move to a cookie-cutter approach … by definition you end up with a large team of people and that puts a lot of farmers off (cell grazing),” he said.
TEAMS NOT UNITS
“I REFUSE to use the term ‘labour unit’, I prefer ‘team members’, nobody wants to be called a labour unit,” Bruce said.
“I don’t even calculate (labour costs), the only thing I look at is EBITDA/ha or cash flow/ha and return on investment.”
Once developments were completed, Bruce expects costs to meet industry averages and for the business to convert at least 45 per cent of revenue, less annual costs, to cash (without depreciation costs).
Now, Locmaria produces 205kg of carcass weight in meat and wool product/ha and aims to lift this to 300kg/ha.
Locmaria sold 9000 lambs last season and this year joined 8000 first-cross ewes and 2500 Merinos breeding replacements.
Merino breeders are bought in, as well as half the first-crosses, but Bruce wants to close the first-cross flock within two years to reduce biosecurity risks.
The aim is to reach 15,000 lambs by 2023 and eventually, 20,000.
Maiden first-cross are joined to Suffolks and mature ewes, to Poll Dorsets.
Sheep genetics are selected on high birth weight and fast growth.
Lambing begins mid-June and finishes in September and early lambs turned off before Christmas. Lambs are sold over-the-hooks at domestic trade weights, via an agent, as Bruce said flexibility was currently important to the business.
When analysing business performance, Bruce does not have rigid production goals.
“What I really drive for is long-term return on investment,” he said.
“I revalue everything every two years and want to know what my cash return on investment is on revalued assets and capital growth — I’m targeting the top end.
“We always thought it’d be five years before we got cash returns and have grown bigger than we thought we would; we’re on target.
“Production is growing 30 per cent per annum; we grew revenue 50 per cent this year, but that depends on markets.”
HEADS TOGETHER
BRUCE and Yolande appointed five key fee-for-service production consultants, as well as a formal, paid, advisory board that meets quarterly.
Bruce acknowledges Locmaria’s growth coincided with a buoyant time in sheep and wool.
“I never predict prices, I go with whatever they are and make sure I can survive a 50 per cent (price) reduction by stopping development,” he said.
He said 20-25 per cent debt was reasonable — indeed he regards moderate debt as a motivator. “Debt pushes you but it can’t be your master; debt should never be more than half your asset level.”
What keeps him awake at night? “How we handle a bad season — to tackle that, we know what it will cost and have to have money available,” he said.
“Longer term, pressures on livestock from global warming and potential government limitation on livestock numbers due to methane output.”
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