Templeton Family
“It’s a family property, we’re long long term Southlanders,” Vaughan explains.
“The family has been here since the first whalers, it’s been over 100 years on the property and the boys are fifth generation.”
The farm was originally a flax mill, before becoming an extensive sheep and beef operation in the early 1970s.
In 2002, the family converted half the farm to dairy. “The change to dairy was so huge that we decided to go entirely dairy. My brother has the other half of the property, which is adjoining, and is still sheep and beef,” Vaughan says.
Two seasons ago, they split their farm into two and their sons, Pete and Luke, are now 50/50 sharemilking one farm each, heading into winter with 640-650 cows apiece. “We’ve been buying up bits of blocks next door as we go, so the original area has expanded a bit, but it’s all based on the same home block."
“On the dairy units we are just 50/50 owners and we do help the boys, when asked.”
These days, Vaughan and Megan’s main role is running a smaller 70 hectare support block, purchased two years ago, which they put a house on and now live on.
“We run the calves and yearlings and that’s our role, to run the support block. We do help each other out in practical terms, but are financially separate. In the short term, we still own the farms, but we have a plan to sell the boys the land in the next two years, so it’s our transition time from farming to taking a step back from day-to-day involvement.
“We love getting out with the calves and looking after them, but things like running staff on the dairy farms is something I’m happy to leave to the boys now.”
While the couple is pleased to see the next generation taking the reins, they are aware it is a big responsibility for their children.
“We are really pleased, but we do realise it’s not easy for the boys, they’re in their mid to late 20s and they have a lot of responsibility - they work very hard. There’s a lot of stress involved. It’s a great opportunity for them, no doubt, but boy, it’s not easy and we are conscious of that.”
Nuffield opens the door for Rabobank
When Vaughan was a Nuffield scholar he visited Rabobank’s head office, before he was ever a client. This introduction to the bank left an impression on him.
“They had the Nuffield conference in Holland and it was sponsored by Rabobank. I saw how the bank ran and its cooperative nature and was able to talk to the CEO. That introduced me to Rabobank."
“Like a lot of Southern farmers, I seem to end up dealing with a co-operative and I thought it (Rabobank) was a natural fit for how I have always liked to do business,” Vaughn says.
The clincher was when their bank manager, who had been with the business through a huge growth period, shifted to Rabobank about seven years ago.
“He offered us a really good plan to change and we enjoyed that manager, as well, I had had that introduction to Rabobank through Nuffield."
“Rabobank is an agribusiness lender and they have a long term view, I thought that was a great fit for a family farm – we take a 20-plus year view.” Added to that, Vaughan felt Rabobank had the highest quality of staff and people in charge. “
I thought they were the elite of the rural banking space, and they were the people I wanted to work with long term.”
A plan for farm succession
The Templetons have a farm advisory board, which Vaughan says has been crucial to getting them to where they are now.
“We’ve always had bank involvement. They can see the transition from having trust in me, to having trust in the boys to deliver what we say and front up with good budgets.
“We saw involving the bank as absolutely integral to successful farm succession.”
While no one from the bank is actually on the advisory board, a bank representative always attends board meetings.
Vaughan believes farm succession is one of the big issues facing the sector. “I’m 55, but there are many farmers who are older than me and have no plan. We have to get the younger people running the farms, taking responsibility and making decisions. It’s one of the big issues for the farming industry in the future.”
Pete, 27, says the bank has been very supportive of him and his brother entering the industry and, with the whole family viewed as one group, they were able to achieve more.
“They pushed us towards 50/50 rather than contract milking. At the time it was a $4 payout and we were nervous, but it ended up being the right call. They pushed the boundaries a bit, which was not what you would normally expect from a bank."
“Looking at our family as a whole pie, they saw more opportunities than obstacles, which was really handy. Since then they have been very useful in helping us build equity through cashflow and get into a position of looking at farm ownership a lot sooner than we thought would be possible.”
He felt the bank’s involvement in their succession planning, leading it from the start, helped break down a lot of the barriers a young person like him might face on entering the industry. “The bank has been very supportive and we’ve had good discussions about options and limitations as well…we wouldn’t have got where we are without the support of Rabobank, or as fast, and with relative security.”
Older brother Luke, 29, believes they are lucky to have a bank manager in James Alexander who is close in age to them, and someone with practical farming experience too.
“We had the chance to go 50/50 – we were low equity and wouldn’t have had enough to go it alone, but they have treated us as one group and gave us access to mum and dad’s interest rates, which is very helpful.”
Luke enjoys the industry events held by Rabobank, with expert speakers and tries to make good use of them. “I really enjoy those events, especially the economic analysis. The networking opportunities are also really good.”
When they started out, the ‘big hairy goal’ was farm ownership by 2020, something that now looks achievable sooner. “Our parents would have to leave some equity in, but we have the farms producing at a level where we can run on our own. The analysis showed we could do that at any time, so the immediate goal is to buy the farm that we are 50/50 on.”
The bank has also challenged the pair on whether what they are doing is the best use of their equity and talents. “They encourage us to look at all options. They are supportive, but they also challenge us and ask if we could be pushing in a different direction. That’s something that’s good for me, I like that sort of thinking.”
While they felt nervous to start with, Luke says Rabobank placed a lot of trust in them, especially him, as he didn’t have a farming background and previously worked as a forestry engineer. “But they have backed us with experienced people and I have always felt respected by the bank."
Giving back
As well as implementing a robust farm succession plan within their own business, Vaughan and Megan are committed to helping other young people wanting to get a start in the industry. Megan is a member of the Rabobank Client Council in Southland and the couple has been involved in its mentoring programme.
“The Council identified one of the things it wanted to do was help young people progress in the sector. We have mentored another couple and that’s been really awesome.”
Through the programme, the bank’s rural managers nominate young people to attend learning and mentoring days with guest speakers, to highlight the pathways available and how they can move ahead.
“We get a huge kick out of being involved,” Vaughan says.