Nicole and Brendan Saunders build multimillion-dollar dairy business in five years
A couple who started as sharefarmers at Maffra have achieved farm ownership and boosted turnover by 10-fold in five years. See how they did it.
Nicole and Brendan Saunders are a glass-half-full kind of couple who look at Australia’s dairy industry and see huge opportunity.
The young couple runs a 1600-cow operation in the heart of Gippsland dairy country, milking herds across 95ha at Maffra, 120ha at Denison and 110ha at Heyfield.
Listen to the above to hear Nicole Saunders speak to the Penfold sisters of Four Daughters in their new segment on The Australian Ag Podcast.
They have built an enviable operation over the past five years, charting a stellar trajectory since starting as share farmers.
Relocating from New Zealand in 2018, the pair have expanded their herd, made production and profit gains, bought their own dairy farm, diversified and, to top it all off, become parents in the process.
“There have been times that it has felt like it has been all too much,” said Nicole, 29, who has been a driving force behind their operation’s rapid expansion, while at the same time getting to grips with motherhood.
Nicole welcomed their son, Jaxson, in 2020, followed by daughter Kara, born last year.
“To be able to achieve what we’ve done, we are really happy with ourselves and it shows that we are a really strong team and are excited about what the future holds,” she said.
What they have achieved in profit, production and sustainability gains is extraordinary.
Business ambition prompted move from New Zealand
Nicole and Brendan had previously been working in the dairy industry in New Zealand.
“We moved because, for us, there was limited scope for growth in New Zealand,” said Nicole, explaining New Zealand’s high land prices had meant farm ownership had been out of reach.
Brendan had been an equity partner in a 1000-head herd and Nicole had started a career as a farm consultant, with a bachelor’s degree in ag science.
In 2018 they packed their bags for greener pastures, crossing The Ditch for Gippsland’s Macalister Irrigation District, to share-farm on Brendan’s parents’ 700-cow dairy farm at Maffra, in a 40:60 split.
The region at the time was not exactly green, however, limping through one of the worst droughts on record.
“There was no feed on farm, none available for purchase, grain prices were at a record highs and milk price relatively low in comparison,” Nicole said.
“So we made the strategic decision to run at a low-cost system and only did 220,000kg of milk solids based on the farming environment we were presented with.”
It was a tough start and they didn’t make a significant profit that year.
But, they didn’t make a loss either.
And that ability to manage a dairy business when faced with huge challenges is what spurred them on to major success.
To date, the couple has built their herd from 350 to 1600 head, boosted milk quality and quantity, and gone from two to 15 employees.
They have achieved their long-term goal of farm ownership, expanded with leased properties, ramped up production to a whopping 800,000kg of milk solids projected for this year and increased turnover by a staggering 10-fold to more than $8 million.
And that’s not all. They have also launched a contracting business and plan to open an on-farm cafe and pick-your-own strawberry operation next year.
Creating a winning business plan
The massive growth was planned carefully by Nicole, who took part in a farm management program run by Rabobank in 2019.
“Hands down, (it) has been, the most valuable learning opportunity I have had,” Nicole said. “I remember vividly, we were asked to set our gross turnover target in five years’ time. My goal was to increase it five-fold.
“I was told that this goal might be slightly ambitious.”
They smashed the target by sticking to Nicole’s clearly mapped out goals: increase profit per hectare, maintain high quality production, improve their team and expand.
Expansion started with a self-assessment of their herd’s performance in 2018. That year they bought 350 cows for an average of $1000 a head, with prices depressed due to the drought.
After a year of operation, they analysed marginal profit and cashflow and decided to switch to a full spring-calving system, as they had been using in New Zealand.
“For us – and I say for us, as every farming system is different and it is what works best for your system – there was no profit in winter milk, as you could still capture a large amount of the winter milk premium without flat supply,” Nicole said.
Split calving led to significant feed inefficiencies on their single dairy platform, because they couldn’t build a high enough pasture wedge with a herd always milking.
“The bottom line said we would make more money being a seasonally calving herd,” Nicole said
So in 2019 they mated their autumn-calving cows in October, bringing them in line with the spring herd. Nicole said it meant a temporary hit to production, but it reflected positively in the six-week in-calf rate.
Production during their transition year hit 270,000kg of MS, and has increased every year since.
Changes to pasture, fertiliser and nutrition boost profits
In 2020, they really started to ramp things up, taking on another sharefarming opportunity and buying 450 cows, for an average $1300 a head. This boosted total production across both share farms to 510,000kg of MS.
In 2021, they finetuned production, buying and trading more cows to boost output to 550,000kg of MS. Huge attention to pasture renovation and fertilisation helped them achieve the result.
They drill Italian ryegrass – an annual that behaves similar to a biennial or short-lived perennial – in autumn, costing about $350 a hectare for seed and drilling.
“We prefer Italians over annuals even though we do annually sow as they have longer longevity through summer,” Nicole said.
They had also increased use of lime and fertiliser, particularly nitrogen (until prices became untenable last year), with tailored application based on soil tests.
Maize was added to the dairy platform, at a cost of 28c/kg dry matter, to provide feed during the autumn deficit. Doubling each cow’s grain ration to 1.8 tonnes a year, and changing from crushed wheat to grain pellets also delivered benefits.
Nicole said pellets offered a more controlled way to add minerals to feed, made it easier to bring cows on to the platform, and removed half a labour unit because they no longer needed one person to push cows on to the platform.
It also increased production because they could tailor pellets to suit lactation requirements.
Their herd’s six-week in-calf rate rose to 76 per cent, and empty rate dropped to 9 per cent.
While the changes to pasture, fertiliser and feed increased costs by about $450,000 a year, the strategy also resulted in a 2:1 return on investment.
This year they have really hit their stride, in May buying their own farm – 500-cow 95ha Mewburn Park at Maffra.
Huge focus on workforce and diversification
Nicole said their staff had been a major contributor to their ability to expand.
They have grown from a workforce of two entry-level part-timers to 15 experienced employees, and try to make their business a great place to work.
“We focus on training for everyone and making sure everyone is on good wages,” Nicole said.
“One of the biggest factors that has made our team enjoy their jobs and lifestyle is we also do quite flexible rosters.
“(Another) thing that has worked with us is to ensure there is adequate housing.
“If you advertise a farm job without any housing you are limiting your pool to within a 15-minute radius of your farm. You can’t really drive an hour at 4am to milk, and twice a day.
“Farming is not glamorous so you have to make sure people have an incentive to work.”
The strategy has meant Nicole and Brendan have not struggled to attract or retain workers, despite labour shortages plaguing the industry.
The next phase of their plan is to diversify into beef, horticulture and agritourism.
With 20,000 strawberry runners on order, planning permits granted for an on-farm cafe and a beautiful new website – theberrydairy.com.au – built, they are on track to welcome visitors to a seasonal pick-your-own berry farm from next October.
“Long term, I would love to connect the dairy and the cafe by having our own milk being turned into a niche product and being able to have a full paddock-to-plate experience,” Nicole said.
“Our goal is to make sure we don’t necessarily just have a sustainable, profitable, resilient dairy business, but an overall business.
“That is where we feel The Berry Dairy will play a big role.”
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