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07/02/2024
Cross-generational family farming operations are typical across the Australian farming landscape, yet family members working together sometimes requires a delicate balance.
For the Locke family of Holbrook, NSW, managing their wool and sheep meat operation is a family affair, with Phillip and Mandy, together with two of their sons, 29-year-old Angus and 28-year-old Nick all actively involved.
And, having enjoyed an almost 100-year family legacy on their property “Fairview”, they work hard to ensure their vision for the future is a united one.
A recent two-day Rabobank Sheep Mini Masterclass, held in Jugiong and Gundagai, helped consolidate this vision, whilst providing knowledge and insights to help take their business forward.
Angus Locke reflected that the initiative provided a fantastic opportunity to share ideas, hear from industry experts, and gain valuable knowledge and skills.
There was huge value being in a room of 28 fellow sheep and wool producers, all happy to share information like an open book, and not afraid to have challenging conversations,” he said.
“We’re all facing the same problems, and it was interesting seeing how other people do business –there was such a good cross-section of people, ideas, and enterprises, so it was really refreshing to see the different business approaches.”
“It was an inspiring few days and you can’t help but walk away from these opportunities reenergised.”
Learning together for a strong farming future
Angus, Phillip and Nick all took part in the Rabobank Sheep Mini Masterclass, and Mr Locke believed there was enormous value in doing it together.
“We did try to stay away from each other as much as we could to make the most of learning from others in the group,” he explained. “And on the last session, we came together and really took stock of the impacts on our business, worked out a plan and put some goals to paper while it was still fresh in our minds.”
“When there are different generations within a family business, it helps to be hearing the same message, and we’re lucky that dad is really forward thinking and open to new ideas. Initiatives such as the Sheep Mini Masterclass help ensure that the message isn’t getting skewed, and really strengthens our communication skills, and resolve.”
With another brother, 25-year-old Hugh, currently overseas and Mr Locke expecting his first child, he said the mini masterclass provided a timely opportunity to really stop, assess their business, and work on strategy.
“We’re in a growth phase of the business so we can support succession planning, and this was another opportunity to review the operation for maximum productivity.”
“Thanks to the masterclass we’re looking at incorporating more benchmarking into the business to really understand our cost of production,” he explained. “We’ve also gained greater insight into our profit drivers, and I guess the masterclass gave us confidence that we are on the right track – despite some turbulent market conditions of late.”
The Locke family currently run 10,000 ewes, and despite these challenging market conditions he said the masterclass left him excited and confident for the future.
“When you look back over the past 10 to 15 years, then plot a timeline forward, the prospects are exciting,” he believes. “I know the past is not a 100 percent indication of the future, but there’s still long-term opportunity.
“Both lamb and wool are fantastic premium products which are not as widely appreciated as they should be. Expanding trade relationships and increasing globalisation is encouraging for the industry – I believe we’re in a good position to take advantage of that.”
Expert advice and insights on hand
Senior RaboResearch Animal Protein Analyst Angus Gidley-Baird presented at the masterclass, along with RaboResearch associate Edward McGeoch, and agreed that much of the event’s value lay in its cohort.
“We had a really diverse group of operators in the sheep space including prime lamb producers, wool producers, mixed farmers – with the commonality being sheep, and everyone has a slightly different take on their business,” he said.
Growth was one of the main themes across the two days, with a dedicated panel session discussing internal growth through productivity, or external growth via property acquisitions.
“A common term used was ‘accessing the low-hanging fruit’ – taking advantage of those one percenters that can really increase your production efficiency, or on the flip side, chasing scale and achieving growth in your business that way,” Mr Gidley-Baird said.
Ratios, key identifiers, and ratios around growth, and how to measure it were key features of the masterclass, as were operational returns, and how to best leverage equity levels.
“We ran exercises on how different equity levels, interest rates, and operational returns can really affect the ability to get that return on capital, which was a really thought-provoking process.”
The topic of farming business structures was also explored, and Mr Gidley-Baird said there was much discussion on the various structures – how many family members and staff are in a business and what is the business direction or strategy – and looking at how to maximise that structure to best leverage the people in the business.
“A clear business strategy is a guiding light to work with, it ensures confidence even with fluctuating markets.”
The masterclass also facilitated discussions with a local processor around objective measurements and quality markers in both wool and more recently, sheep meat, with Mr Gidley-Baird excited by the potential opportunities for value-based marketing and premium returns.
For the Locke family, the bigger picture thinking the masterclass encouraged was a key take-away.
“It’s important in the current market to look long term, and continue using gearing and debt to your advantage."
“We’re probably sitting on our hands a bit during this downturn, but the outlook for sheep and wool is positive, and it was empowering to have this reiterated.”
“The RaboResearch analysts are a big feather in the cap for Rabobank, as clients we almost have direct access to their knowledge and insights – they’re an amazing resource and it was great to have Angus and Edward at the masterclass to put things into perspective.”
Upskilling and continual improvement
Currently participating in Rabobank’s Executive Development Program, Mr Locke is excited to realise the value the course affords.
“I’m halfway through what has been a mind-blowing upskilling opportunity – when it comes to farming professional development the EDP is potentially as good as it gets.”
“I’m currently working on my business plan project that I will present and eventually put into practice, which I’m really looking forward to, and I’ve gained so much from the networking opportunities of the EDP.”
“It’s a diverse cross-section of producers from various industries and the week we’ve had together so far was incredible.”
Mr Locke believed the Sheep Mini Masterclass provided an opportunity to further build on concepts and insights explored during the EDP, and the Rabo Client Council Financial Skills Workshop, which he participated in a number of years ago.
“Continual learning and upskilling is so important, and it’s something Rabobank does particularly well,” Mr Locke said. “The networking opportunities the bank provides are also excellent – we’re at a point now where we’re running into a lot of the same farmers at these initiatives, and really bedding down those relationships for even greater shared learnings.”