The value of a structured approach to finances
Between raising three young children and running a 300 cow dairy farm at Bostocks Creek in Western Victoria, Pete and Marnie Kerr have plenty on their plate.
Since buying their farm of 121ha in 2022 and leasing an additional 160ha, they've used a structured approach to their finances to steadily build their business. Their disciplined approach helped them achieve a recent milestone: purchasing 64ha they had previously been leasing.
Pete and Marnie say that by keeping a close eye on stocking rates, milk production, business costs, and overall profitability, they have been able to identify opportunities, make confident decisions, and build a strong foundation for the future.
“I grew up in Melbourne and started an apprenticeship with family friends,” says Pete.
“From there we progressed onto a low-level share agreement and then took on 50/50 share farming and then we were fortunate to be in the position to purchase 300 acres four years ago.”
For Marnie, having a clear understanding of the business finances has created opportunities beyond the farm gate.
“We've got three beautiful kids and I've been lucky enough to be able to take two years off work to really focus on family because we've had such a tight understanding of finances and how we can support not just the farm but our family as well,” she says.
“My physical involvement fluctuates with family life and employee availability, but I do the books every month and have the data sitting there ready for budgets.
“I think the more you work on finances together, you feel like more of a team. Having a really good understanding of our finances month to month has really helped the business go forward and our family life to thrive.”
Marnie says participating in the Focus Farm Program has kept financial management front of mind.
“I like doing the books and having everything organised. I think the Focus Farm Program has really kept us on our toes with monthly budgeting and making sure we always have all the finances up to date,” says Marnie.
A Focus Farm is supported by a peer group made up of a Dairy Australia team member, farmers and service providers who offer guidance, expertise and practical advice to support Focus Farmers to achieve set goals over a defined period.
Pete uses Dairy Australia's Cash Budgeting Tool to compare actual performance against their budget.
“Each month I enter our data into Dairy Australia's Cash Budgeting Tool, (and) update it with the actuals compared to our budgeted figures. This gives us a good idea of how we're tracking,” he says.
“If there's any surprises that turn up, we can plug them in and adjust our plans, making decisions about what we’re going to do based on what the numbers are telling us.”
The couple also uses the Dairy Australia’s Dairy Standard Chart of Accounts and DairyBase to support their financial planning.
“Our accountants helped us set the Dairy Standard Chart of Accounts up from the get- go,” says Marnie.
“As our business has grown and changed, we’ve made some more purchases that deviated from the standard chart, (so) our accountants have adapted it as we’ve gone along, which has been fabulous and very helpful,” says Marnie.
Pete says years of financial and production data continue to play an important role in shaping the farm's future.
“We've got financials and DairyBase data going back nearly seven years.”
Keeping accurate records has helped the family demonstrate the strength of their business when seeking finance.
“I think it's so important to keep detailed records. We have always been able to provide the bank with good information. This has allowed us to pay the cows and machinery off, and secure a loan without high levels of equity,” says Pete.
“We keep going back to the DairyBase data-set to make plans and set goals for where we want to go.
“Going forward, we’ll continue to use DairyBase to monitor our financial position so that we can continue to improve our business. We have some infrastructure improvements and other big projects we are working towards.”
For Pete and Marnie, strong financial management is about creating opportunities, making confident decisions and building a future that supports both their farm and their family.
Dairy Australia offers a range of programs and resources for dairy farmers at every stage of their journey, from those starting out to experienced operators looking to take their business in a new direction. To learn more about the support available, contact your local Dairy Australia team or visit Farm Business.