Business prize for Bonita

By Dairy News

The Australian dairy industry has bought opportunities to Bonita and Merv Koch they could never have envisaged had they stayed in their native New Zealand.

The couple moved to Australia in 2001 with some big ideas and just $6000 in cash.

Today they own and operate a 700 cow A2 dairy operation on 220 ha just outside of Tongala.

Over the past 12 months, the couple has transitioned their predominantly Friesian herd to A2 to secure a premium price for their milk and a sustainable and long-term future.

The decision came after Bonita began Rabobank’s Executive Development Program.

“Farming had taken a back seat while I focused on starting a family.

"I was looking at becoming more involved again, but I felt I was lacking confidence and motivation, so I decided to take on the program,” Bonita said.

She said her defining moment during the course came when she was told ‘If you are doing the same as everyone else, expect to get paid the same’.

“The program helped set the strategic direction of our business and also gave me the confidence to look outside the square at other options and not stay the same as everyone else,” she said.

Setting goals to transition the business was an extremely important part of the process and included a plan to change processing companies by January 1 of this year and supplying A2 protein milk by July 1.

Bonita and Merv successfully negotiated a contract with Freedom Foods and they commenced supply at the start of the year.

“Freedom only have a small number of A2 herds which make it a sustainable and demand-driven market to supply.

"I like the way they think and the products they make.

"I am proud to think our milk goes into a product like their Messy Monkey milk drinks, they do a few niche products and I think it’s great,” she said.

Initially Bonita thought they might transition the herd to A2 over a few years but when she sat down and worked out it would cost them $500 000 through production losses, she decided to fast track the process.

The couple had already been using A2 bulls in the herd for 14 years.

They were hoping for around a 65 per cent rate when they ear notched their cattle and were disappointed when the figure was around 55 per cent, although Bonita does attribute the percentage to the fact they have bought in additional stock over the years.

The spring calving A1 herd was sold and replaced with A2 stock and any young stock to calve into the herd in the future will be A2.

The problem of sending A2 milk was made easier by the fact the dairy already had two vats — supplying just meant the herd was simply split in two (they are expecting the entire herd to be A2 by autumn 2020).

The staff must follow strict protocols and keep the herds separate at all times — the A2 herd is always milked first.

Bonita acknowledges their timing for change might not have been ideal with drought conditions and high feed and water prices, but the couple decided the risk of doing nothing was even greater.

“We feel fairly confident going forward that we can create a larger margin to be able to withstand the seasonal conditions like drought, water prices and high feed costs and even the high costs of labour going forward in the future,” she said.

While changing over to A2 has been a big commitment Bonita said there have been other things they have been able to do within their business to increase profitability.

Half the farm is now sown to a variety of fescue while the other half is sown down to annuals.

They top it in spring when the cows are transitioning off the annuals which freshens it up and the cows have no trouble grazing it over the heat of summer.

The cows are fed a TMR mix on the feed pad every day of the year to keep it a consistent part of the diet, the amount just varies dependent on what the cows are grazing at the time.

Between bores and permanent water allocations (based on 100 per cent) the couple has around 70 per cent of their water requirements.

There is also a 170 Ml dam which can be filled under right rainfall conditions.

The spring calving cows are joined to wagyu and the calves are reared for a week and sold for $325.

Bonita said completing Rabobank’s business course has given her confidence and motivation to really look at her business.

“Being able to step outside and really look at our business has enabled us to produce a premium product and give us a larger operating margin.

We were flying under the radar nicely, but we have had a lot of people ask us recently about the process of transitioning.”

The business plan Bonita generated for the process of transitioning the herd was enough to see her awarded the Rabobank Dr John Morris’ Business Development Prize.