Geoffrey Kane and family
Geoff Kane won the Skellerup Young Farmer of the Year Contest in 1981, the first year it was televised. He was a sharemilker with a stepping-stone farm in partnership with his wife Cynthia purchased in 1977. The first dairy farm was initially 87ha south of Shannon, southern Manawatu. Also in 1981 they purchased the home farm of 180ha on Mangahao Dam Rd, Shannon, using a 10-man company structure, which has now been revised to Geoff and Cynthia as major shareholders. Fifteen years ago they formed a family trust and bought some small parcels of land and a forestry block. The trust now owns a second dairy farm of 75ha (purchased six years ago) and several other blocks of land around Shannon, including 20ha of forestry.
In recent years they have purchased 4ha lifestyle blocks on their boundaries when they have become available. Geoff now receives 13 rates notices. The three farming entities are accounted and reported separatelypartnership, company and family trust. Contrasting farm financials are also useful, Geoff believes.
More and more assets are being transferred to the family trust as farm succession planning for three sons. Oldest son Leo, aged 26, is due back from overseas soon.
The three farm ownership structures and the scattered number of land holdings have led Geoff and Cynthia to make a particular study of farm business development, risk analysis and succession planning. They have three sons, although only one is involved in farming at present. The first farm was purchased with a conventional farming partnership and the second with a small company, now changed to just Geoff and Cynthia as directors. The family trust was established for the usual taxation advantages, including the ability to spread income around family members, and now facilitates the succession plan. More assets are signed over to the trust each year and this will eventually result in sons being able to take over farm equity without death duties and/or allow Geoff and Cynthia to retire with equity. Geoff says it is also handy for spreading risk through diversification into sheep, then beef, forestry, a share portfolio and a city building investment. We went through the tough times of the 1980s and we now put away emergency funds, which is something which can be cashed up, he said.
Shannon district is experiencing big lifestyle block (4ha) subdivision which has raised land values and brought new pressures on remaining farms. Geoff has purchased an average of two blocks per year recently to expand farming operations. However the economic of purchasing may no longer stack up. The trust dairy farm has $1 million of debt costing $100,000 in annual servicing. If the three adjacent 4ha block titles were sold again that $1 million would be repaid. The herd would have to be reduced from 180 cows to 160 cows, but that loss of production would be more than compensated by the lower servicing cost.
Geoff has been trying to increase the size of his business enterprise every year, but this is now high-priced land ($50,000/ha), dairy production expansion means extra costs for Fonterra shares, interest rates are high and the available land near Shannon is going rapidly. I dont think we would cease farming here, but perhaps reduce the amount of land.
Geoff gets on well with lifestyle block neighbours, but can see potential for conflicts.
An example is cows crossing roads, which occurs about three times a week, when Geoff makes sure the road is hosed afterwards. Another example is haylage bales or tubes which lifestyle block owners may find visually offensive, or odours from farming activities.
With dairying in proximity to lifestylers, there is always some capital works requirement, like effluent system upgrades, irrigation, etc. which need RMA approvals. Farming is accumulating debt at a great rate (doubled in five years) and as loans come off fixed terms to floating, interest rates have gone up by 2%. That extra debt must still be servicing when an industry downturn comes, warns Geoff.
Two dairy farms contain 240 and 180 cow herds. The older farm (partnership) is still worked by Geoff with one farm worker and a 20-a-side herringbone shed. The newer (trust) farm has 180 cows, a farm manager and relief milkers and a 12-a-side herringbone. Production is around 350kg MS/cow/year and 1000kg MS/ha on the bigger farm and 1200kg/ha on the smaller.
The herds are Friesian, mated with Friesian AI and tailed up with Hereford. All calves are reared within the Kane farming structure, either as Friesian bull beef, Hereford-cross steers and heifers or Friesian herd replacement heifers.
The home (company) farm is running 400 bulls and finishes 500 lambs annually, some of which are home-bred. Home farm has pasja and turnips for supplementary feeding as well as pasture. Target finished weights for bulls are 320kg CW, achieved about two years of age. The home farm is not set up with intensive cell system, but paddocks are subdivided and bull groups rotated during winter.
300-plus weaned calves are run on leased blocks, where maize is also grown.
Geoff has contractors make 120T DM maize silage and 120T DM grass silage annually and this year the silage is in one long tube.
He has annual pasture renewal on the dairy farms and is presently participating in clover establishment and management trials with John Brock and Gerald Cosgrove from AgResearch Grasslands. Lots of stock and fodder movements mean extra trucking expenses with contractors doing all the work. Geoff has installed a meal feeder in the smaller dairy shed. He has enough supplements to feed all livestock for four months of the year.
In recent years they have purchased 4ha lifestyle blocks on their boundaries when they have become available. Geoff now receives 13 rates notices. The three farming entities are accounted and reported separatelypartnership, company and family trust. Contrasting farm financials are also useful, Geoff believes.
More and more assets are being transferred to the family trust as farm succession planning for three sons. Oldest son Leo, aged 26, is due back from overseas soon.
The three farm ownership structures and the scattered number of land holdings have led Geoff and Cynthia to make a particular study of farm business development, risk analysis and succession planning. They have three sons, although only one is involved in farming at present. The first farm was purchased with a conventional farming partnership and the second with a small company, now changed to just Geoff and Cynthia as directors. The family trust was established for the usual taxation advantages, including the ability to spread income around family members, and now facilitates the succession plan. More assets are signed over to the trust each year and this will eventually result in sons being able to take over farm equity without death duties and/or allow Geoff and Cynthia to retire with equity. Geoff says it is also handy for spreading risk through diversification into sheep, then beef, forestry, a share portfolio and a city building investment. We went through the tough times of the 1980s and we now put away emergency funds, which is something which can be cashed up, he said.
Shannon district is experiencing big lifestyle block (4ha) subdivision which has raised land values and brought new pressures on remaining farms. Geoff has purchased an average of two blocks per year recently to expand farming operations. However the economic of purchasing may no longer stack up. The trust dairy farm has $1 million of debt costing $100,000 in annual servicing. If the three adjacent 4ha block titles were sold again that $1 million would be repaid. The herd would have to be reduced from 180 cows to 160 cows, but that loss of production would be more than compensated by the lower servicing cost.
Geoff has been trying to increase the size of his business enterprise every year, but this is now high-priced land ($50,000/ha), dairy production expansion means extra costs for Fonterra shares, interest rates are high and the available land near Shannon is going rapidly. I dont think we would cease farming here, but perhaps reduce the amount of land.
Geoff gets on well with lifestyle block neighbours, but can see potential for conflicts.
An example is cows crossing roads, which occurs about three times a week, when Geoff makes sure the road is hosed afterwards. Another example is haylage bales or tubes which lifestyle block owners may find visually offensive, or odours from farming activities.
With dairying in proximity to lifestylers, there is always some capital works requirement, like effluent system upgrades, irrigation, etc. which need RMA approvals. Farming is accumulating debt at a great rate (doubled in five years) and as loans come off fixed terms to floating, interest rates have gone up by 2%. That extra debt must still be servicing when an industry downturn comes, warns Geoff.
Two dairy farms contain 240 and 180 cow herds. The older farm (partnership) is still worked by Geoff with one farm worker and a 20-a-side herringbone shed. The newer (trust) farm has 180 cows, a farm manager and relief milkers and a 12-a-side herringbone. Production is around 350kg MS/cow/year and 1000kg MS/ha on the bigger farm and 1200kg/ha on the smaller.
The herds are Friesian, mated with Friesian AI and tailed up with Hereford. All calves are reared within the Kane farming structure, either as Friesian bull beef, Hereford-cross steers and heifers or Friesian herd replacement heifers.
The home (company) farm is running 400 bulls and finishes 500 lambs annually, some of which are home-bred. Home farm has pasja and turnips for supplementary feeding as well as pasture. Target finished weights for bulls are 320kg CW, achieved about two years of age. The home farm is not set up with intensive cell system, but paddocks are subdivided and bull groups rotated during winter.
300-plus weaned calves are run on leased blocks, where maize is also grown.
Geoff has contractors make 120T DM maize silage and 120T DM grass silage annually and this year the silage is in one long tube.
He has annual pasture renewal on the dairy farms and is presently participating in clover establishment and management trials with John Brock and Gerald Cosgrove from AgResearch Grasslands. Lots of stock and fodder movements mean extra trucking expenses with contractors doing all the work. Geoff has installed a meal feeder in the smaller dairy shed. He has enough supplements to feed all livestock for four months of the year.