Financials helping analyse progress and plan for success

Having travelled the world to find the scope, scale, and opportunity they were looking for, then working their way up to 50/50 share farming in Northwest Tasmania, Irish farmers Denis Ryan and Aisling O'Neill, are taking the step into land ownership.

It's one of many reasons the couple, who have about 1100 cows, say they found Dairy Australia's recent Wealth Creation workshop with Lynaire Ryan and Paul Bird well worth their time.

The course offered the pair a chance to consider the return they've gained over the last decade through a series of opportunities they've secured by biting off "maybe more than we can chew" every 6–12 months, then "chewing" like mad, Denis says.

"It was good to sit down and learn and go through and realise those efforts haven't been in vain, and we have progressed very well from essentially nothing, coming to Tasmania and Australia – so compounding on about 23% year-on-year," Denis says of the return of equity on their initial investment.

He and Aisling also learned about the level of return on investment they can expect from taking that step into land ownership, including how long it's likely to take.

"As share farmers, we probably grow our return a lot quicker just through our livestock," Denis notes. "But with the land, it's a slower level of appreciation."

While they used to focus on one shorter-term goal at a time, they are now looking further into the future.

"We're thinking in decades now, and achieving those long-term goals means having a solid understanding on the finances of the business," Denis says.

Denis and Aisling do their own business activity statements, payroll and bookkeeping, and use Dairy Australia farm business tools, like the Dairy Standard Chart of Accounts, to capture and report on the businesses financial position.

"We're always reflecting on what we're taking in and what we're spending and trying to make that aligned to, say, budgets we've prepared across the season," Denis says.

The couple have been using Dairy Standard Chart of Accounts for years and find it beneficial. In recent years they've also started to use DairyBase, an online tool to help dairy farmers and advisors measure and compare farm business performance over time.

"We expect DairyBase will help sharpen the pencil on what we're doing now, once we've established our core base of contracts with share farming and land ownership and debt repayments," Denis says.

Denis notes that many of the principles they learned in the Wealth Creation workshop, including "the return of 72" – a rough-hand way of calculating how long it will take to double a sum of money – have application beyond the business.

"You can absolutely relate them back to your own private lives as well."

The pair agree that relational and financial risks are often intertwined.

"Farming is an investment with money, but also quite a lot of your life as well," Aisling says.

"You have so much invested: machinery, livestock, and then your time as well; so there's a massive step up from being a manager to a lower order share farmer, to a 50/50 share farmer, then to obviously land ownership," she adds.

"If partners aren't aligned, it does crumble, and it crumbles pretty fast."

Dairy Australia's Our Farm, Our Plan program, helped them mitigate that risk.

"Getting our vision for our business and for our lives down on a piece of paper was really good for team alignment," Denis says.

The Our Farm, Our Plan program supports farmers to improve business planning and better manage risk, and includes one-to-one support over 24 months. Farmers develop long-term goals, identify and prioritise actions, and manage uncertainty and risk.

Even if a Dairy Australia course is on a topic they're familiar with, Denis and Aisling still try to attend.

"You'll always pick up something that you may not have in the past, or you'll always meet new people, so we have an attitude of: any courses available, we make our best efforts to go," Denis says.

To find out more about how Dairy Australia supports farmers with farm business analysis and planning, reach out to the local team or visit Farm Business.