Meet the entrepreneur who turned a small farm into a multi-million dollar business
Lachlan and Maryanne McKenzie have built an agribusiness powerhouse after buying their first 2ha at Lara. This is how they did it.
Lachlan McKenzie credits his grandfather Mitch McKenzie – an agribusiness leader – for his entrepreneurial spirit.
While it is clear that Lachie inherited an aptitude for business, he didn’t inherit as much as an acre of land.
The genesis for farm ownership goals, Lachie, 52, tells The Weekly Times, was a throwaway comment that stuck in his mind, made by a lecturer at Dookie College where both he and wife Maryanne studied.
As he tells it now, the lecturer cautioned the student cohort they should get any ideas of buying their own farm “out of our heads”. It was too hard, finance too hard to come by, it was argued.
The swift ascent of Lachie and Maryanne – the pair dropped $275,000 on an Angus bull, Cluden Newry Uppercut U15 earlier this year, then purchased the 1200ha blue ribbon property Condah Hills from Dunkeld Pastoral Co, the agricultural enterprise of legal eagle and businessman, Allan Myers AC KC – has turned heads in pastoral circles.
Now, with their names on three Western District farms – Condah Hills, Bruanlea and Torah – plus land at Ballarat, and the McKenzie Ag Services grain, fodder and ruminant nutrition consultancy enterprise, which trades more than 300,000 tonnes of various animal feeds annually, the couple have clearly proven that academic’s assertion dead wrong.
“In the background, always, we were always wanting to buy a farm,” Lachie said.
After Dookie his first job was in a government department. “I was there for 26 days,” he said, adding, “I just figured out this culture is not where I want to be”.
He then joined James & Son, an English animal feed company where he moved up to help with the company’s international expansion, and after that, worked in consultancy with the firm.
During this time, McKenzie started a cattle trading and feeding business Wahroonga beef, with business partner Ian MacDonald, at most handling 12,000 cattle on feed.
“There was a lot less intensive feeding back then, it was mostly the big feedlots with very few smaller operations finishing cattle on grain,” Lachie said.
Market volatility, driven by drought, high grain prices, and low finished cattle prices, led to a decision to close.
“We had a few really good years, and then just said, we’ve got wind this up, because if we don’t, we’re going to undo all the good work we’ve done,” he said.
While running the beef enterprise and continuing in consulting, Lachie also served nine years as chief executive of the Ballarat Turf Club, pursuing his other life long passion of thoroughbred racing.
BUYING UP
Property acquisitions started with a modest 2ha at Lara for $151,000 in 1998.
They sold it for a $100,000 profit a couple of years later, and then purchased 16ha near Ballarat.
Now, they have close to 2500ha all up.
The first large farm they bought was Bruanlea at Tarrenlea, and then a second property Torah at Wando Bridge, taking the land area in that region to 1200ha.
“We’ve only expanded as we’ve paid off farms,” Lachie said.
“I’ve never really only had one job,” he said, adding that in his younger years he worked “every single Saturday and Sunday and every public holiday”.
“I just never had a day off. I loved it.”
The biggest purchase so far came this year with Condah Hills, which boasts a mothballed feedlot – not for long – and irrigation.
The McKenzies now have 3600 cattle running on the former Myers land. The initial focus at the newly acquired farm has been pasture improvement and summer cropping, and next the feedlot will be brought back to life, and then plans for a third pivot.
STOCK LOT
Across the farms, the McKenzies will calve down 1350 females this coming July to August, with all calves to be weaned from February and containment fed until eight weeks after the autumn break to allow pasture to get away.
Lachie said the goal was to hit 2000 breeders in a couple of years.
The cow herd includes registered animals, which form an Angus stud used to supply genetics for the McKenzie properties.
“We are rapidly improving the herd with AI, ET and genomics,” he said.
The McKenzies have also drawn genetics from customers’ studs, including Weeran, Paringa and Yerwal Estate.
Prime lamb production is also a focus, with a flock of composite ewes, based on Cloven Hills genetics, producing around 5000 Poll Dorset sired sale lambs annually.
Additionally, the McKenzies have a cattle trading business, which utilises any surplus paddock feed and provides opportunity for trialling various feed options through the McKenzie’s feedlot.
BROAD RANGE
The McKenzie Ag Services business started in 2017, with the aim of selling 1000 tonnes of beef and lamb feed in a month.
“The first month, we did 700 tonnes, and then the next month we did just on 1000 tonnes,” he said.
“Now we do 1000 tonnes/day.”
The Tarrenlea Mill produces 10-15 per cent of the total tonnage shipped by McKenzie Ag Services, with the remainder being grains, meals, by-products, hay and pellets/mixes manufactured through toll milling arrangements at other mills.
McKenzies also supply a broad range of feeds to their beef and lamb clients in NSW, Queensland, South Australia and Tasmania.
“The thing with ag in Australia is, it is generally dry somewhere,” Lachie said.
It is clear that a big driver of the McKenzies success is the relationship with their clients, and staff, who are treated more like friends and colleagues.
“The relationship we’ve got with our customers... and the quality of our staff are the two things I think that are more important than any other thing,” Lachie said, describing how their success was as important as his own.
“We empower our staff to make decisions, they run the show,” he said.
This includes farm managers, Scott Goodwin at Bruanlea, Justin Carlin at Torah, and Ryan Lenehan at Condah Hills as well as “irreplaceable” business manager Becky Lingard.
All five administrative staff work from home, Lachie said, with the aim of providing “more flexibility and work life balance”.
“We have developed a team of staff that have skills that I don’t have,” he said.
“I think one of the keys in business is to understand what you’re not good at and recruit a team to cover this.
“I think we have excelled in this area. We have a highly motivated team with a diverse skill set. I am very proud of all our people and feel very fortunate to have them all in our business”.
SOLID BUSINESS
The business model is built on “large volumes at a very small margin”.
“It’s quite common for us just to make a $5/tonne margin, but if you make a $5 margin and do 1000 tonnes/day it is a solid business,” he said.
“We don’t have offices in town, nor do we have multimillion-dollar mills in specific spots. We have a low cost business with a long-term, loyal customer base.”
The lean structure allows them to offer competitive pricing while maintaining profitability.
“It is very rare for us to have a bad debt. We have a robust credit checking system, and develop strong business relationships with our clients” he said.
“I have no interest if someone comes to us to buy and wants to know if we are $2 cheaper than the next supplier.
“What we can offer is more value.” This value, he said, comes from “complete trust and integrity, so honesty, openness, communication,” combined with his “ration formulation, animal nutrition, practical feeding advice and feed procurement capabilities.”
“The most important thing for me is that my customers are successful,” he said.
JBS has been a key partner, with McKenzie providing ration formulations for the meat giant’s Yambinya beef and lamb feedlot, as well as feed procurement services.
“JBS has been instrumental in our growth,” he said.
“They’ve supported us for many years now, and we do everything we can to support them and the suppliers within their Farm Assurance Program.
“I have a strong understanding of the feeding side of JBS’ Farm Assured grass-fed program and have trialled many FA compliant feed rations within our own program,” he said, noting that “a lot of the traditional feed companies probably struggle with pasture fed programs, as they lack understanding of the technical side and have not had the hands-on, practical experience that we have”.
Other major clients include beef and lamb wholesalers, corporate feedlots, family farms and live exporters.
Over the past 14 years Maryanne has worked in childhood education as well as in the family business but is now moving full-time in the business.
The pair have three adult children – Lauren, Hugh and Patrick – and if the family have what can be considered downtime, it usually involves horse racing.
This year the McKenzie clan were all together to see their horse, Middle Earth, run third in the Melbourne Cup.
“There were two or three seconds there I will never forget, when I thought he was going to win,” Lachie said.
Asked if that thrill was enough to satisfy the lifelong lover of horse racing, Lachie’s response says a lot about his mindset: “All it did was make me more determined to win one”.
More Coverage
