A Waikato farmer has succeeded in creating a top farming business, as well as a career in the corporate world.
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Zach Mounsey is an equity partner and sharemilker on the family farm at Te Kawa near Otorohanga milking 440 cows.

The desire to have a dynamic farming business as well as an exciting career off the farm, a Waikato farmer has come out on top in both.

And he got there by focusing on creating a simple, profitable farming operation with an efficient Jersey herd.

Zach Mounsey who is an equity partner and sharemilks 440 Jersey cows on 161ha at Te Kawa near Otorohanga on the family farm, which was the most profitable Waikato 50:50 sharemilker in Dairybase for 2018. He is also the general manager of milk supply for Happy Valley Nutrition (HVN), a new dairy processor aiming to produce high-quality infant formulas.

His background from study and working with Fonterra and DairyNZ have built his knowledge and skillset for success both on and off the farm. He credits his farming business success to a focus on efficiency, cost management, cow health, pasture management and getting a return on every dollar spent.

“In every aspect of the farm business, I’m trying to maximise returns. This approach informs everything from breed choice and milking intervals, to feed inputs and infrastructure,” Zach says.

Several years ago, he made the decision to change the breed of cows they were milking. At the time, the family owned a farm at Otorohanga that had contour and soil that was more suited to a smaller animal than the black-and-white and black cows they were carrying. They strategically purchased a Jersey herd and continued to target A2:A2 production.

“Changing to Jersey was a no-brainer on that farm and I think other farms could consider it too,” he says.

“The herd we looked at was doing similar production to our Friesian-cross animals while on a once-a-day system, with a lower maintenance feed requirement.

“And it also appealed to me that Jersey genetics predominantly carry the A2:A2 allele, which we started breeding towards in 2012.

The herd is now completely A2:A2 and they supply exclusively to Synlait. They are pleased they are getting financially rewarded for the breeding decision they made 10 years ago after realising the opportunity and on-farm value A2:A2 could deliver.

He describes the herd as low-maintenance, with very few animal health issues.

“We have very few cases of lameness or mastitis and our somatic cell count typically averages less than 150,000 for the season,” he says.

The herd’s outstanding health and reproductive performance also results in savings on youngstock.

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The Wakaito farmers made the decision to switch to Jersey cows, which are on once-a-day. The herd is on track to produce 150-160,000kg MS.

He is focused on growing the business and looks at opportunities as they arise and they recently bought 30ha from a neighbouring farmer.

They are gradually building cow numbers, which can be challenging since they are exclusively A2:A2.

Growing up on the family farm at Otorohanga he was a typical farm-kid and liked to do the traditional things that kids do. Some of his earliest farm memories were reaching up with the teat sprayer while his parents were milking the cows.

“It was just Mum, Dad and myself on the farm but I come from a long line of farming family,” he explains.

He is the sixth generation on the farm.

“I always wanted to be a farmer but Mum and Dad pushed me to spend some time off the farm to learn more about the world before I settled into the farming business,” he says.

“So keeping that in mind, when I was 16 I decided I wanted to have a dynamic farming business because that’s where my passion is, but I also wanted an exciting role outside of farming.”

Rather than studying agriculture or agriscience directly, he studied finance and economics at Waikato University.

“I thought I had a good handle on farm systems already and wanted to get a greater depth of understanding in business, commerce, finance and economics,” he says.

“I knew somewhere along the line the two would complement each other.”

His first role out of university was with Fonterra in finance and public trading, based in Auckland, which was a huge adjustment.

As a small-town country boy, he quickly realised he was a long way from home when he arrived in the big smoke of Auckland and received funny looks when he asked where to park his car, but he soon learnt.

“I stayed on the farm through university and even while I was working in Auckland, I spent nearly every weekend back home in Otorohanga on the farm,” he says.

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Zach is big on using data to make decisions. He religiously monitors his round length at different times of the year and the residual being left behind.

“I can count on one hand the weekends I didn’t. I put a few miles on my poor little car, but I really didn’t want to lose sight or context of the farm.”

In 2015 he received a scholarship to attend the Global Youth Ag-Summit in Canberra, Australia, through Bayer Crop Science.

“It was an interesting experience, there were 100 people from all over the world and that brings a lot of different viewpoints to consider,” he says.

“We were exploring world hunger and malnutrition and opportunities to solve the issues. But ultimately, it was the same problem that we’re experiencing worldwide now, with political policy driving inefficient systems and creating the wrong price signals.

“I did find some frustrations, as a lot of the other scholars attending the event seemed to lack ground-level farming experience and business acumen.”

He still keeps the learnings he took away in mind with his own business planning and his work with HVN. Particularly when considering messaging and price signals to producers regarding production, sustainability and the value proposition of New Zealand milk.

He has also completed the Kellogg Rural Leadership programme with Lincoln University and has received an AGMARDT Leadership scholarship that he applied to further study through Harvard Business School. And he has spent time in America and South America studying greenhouse gases and their connection to agriculture, predominantly in pasture-based bovine systems.

“I’m always keen to learn more and know how to influence decisions and create efficiencies,” he says.

After three years with Fonterra, he jumped at an opportunity to move into an economist role with DairyNZ based at their head office in Hamilton. That allowed him to move back to the farm and contribute more to the weekly operation.

“I enjoyed my time at Fonterra but being on the farm is really important to me,” he says.

He enjoyed farm life so much, he eventually left his professional career to be involved full-time in 2016. He had become an equity partner during university but was now ready to buy the herd to sharemilk.

Not long into his full-time farming career, another opportunity came up with DairyNZ and he stepped into a corporate support role that had him working closely with chief executive Tim Mackle, while keeping the farm running back home.

While working at DairyNZ, he made a contact who was also involved in a new startup milk processor, HVN. His name was mentioned to the founders and they approached Zach to join the team.

“Within two or three weeks of my name being put forward I had a contract on offer,” he says.

The opportunity to work with a new dairy processor was exciting. He was their first full-time employee, initially in a generic development role and helped with the consent process.

He helped commercially establish HVN within the King Country community, supporting the financial and economic modelling and put together the milk supply strategy. And as the team has expanded, he has moved into the position of general manager of milk supply.

Earlier this year, HVN entered an agreement with Burt Lewis Ingredients (BLI) to supply the North American company with milk powder. The agreement is conditional on both parties meeting certain operational and quality conditions, which include BLI purchasing a minimum of 4800 metric tonnes per year of milk powders that are destined for export markets.

The agreement has a three-year minimum term and requires HVN to complete the construction of its factory near Otorohanga and it satisfies the quality assurance requirements of BLI.

It is great news for the new company and he is excited to be part of the process.

“It’s been hugely exciting being part of a new greenfield dairy processor as a startup opportunity and having a hand in most aspects of the business,” he says.

Construction of HVN’s factory is in its first phase, with earthworks under way. In June it announced it had completed the purchase and settlement of the 142ha of farmland called Woolly Farm, which the factory is located on.

Once operational, HVN’s factory will have capacity to produce 35,000t per year of products and aims to commence operations by mid-2023.

“Earthworks have started on the plant in Otorohanga and we are looking forward to signing up suppliers soon,” he says.

In 2019, the family sold the Otorohanga farm and purchased their current property in Te Kawa, which is 161ha and runs as a System 2.

“We like to keep the system simple and efficient, and moving to Jersey cows was a big contributing factor to allow us to operate the way we do,” he says.

They have a farm manager who takes care of the daily tasks and an extra team member helps out through calving and mating. His parents Andrew and Anita Coombe have off-farm roles of their own and live on a lifestyle block closer to town. But they still contribute to the strategic side of the farming business and help out during the silage and hay-making seasons.

They milk once-a-day throughout the season, targeting 340-350 kilograms of milksolids per cow, achieving 125,000kg MS last season, with a target of 150-160,000kg MS on the larger platform this season.

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The site on which the Happy Valley Nutrition factory is being built at Otorohanga.

“I find Jerseys to be highly efficient converters of feed into milksolids, which gives the best return on per kilogram of dry matter basis,” he says.

They are part of the Lead with Pride Programme at Synlait, which is designed to recognise and financially reward suppliers who achieve dairy farming best practices.

“It means we do things like formally body condition score the herd and ensure we’re passing on information to Synlait around what’s happening on the farm,” he says.

Suppliers are responsible for ensuring they are meeting the required standards for environmental management, animal health and welfare and milk quality. As well as a social responsibility of supporting the team who are working on-farm.

Synlait claims this helps their customers differentiate their products in the competitive marketplace through having absolute integrity and superior quality milk, as well as assurance it is being sustainably produced.

“It gives us, as farmers, an incentive to prove we are doing the best we can on-farm, operating efficiently and sustainably and we are rewarded financially, which is a good driver,” he says.

Zach is big on using data to make decisions. He religiously monitors his round length at different times of the year, and the residual being left behind.

“As long as we’re happy the cows are fully fed, we don’t want to over-complicate things too much,” he says.

“So round length and cow condition are key, as well as staff morale. We all have other roles off-farm, but we make sure we’re not too far removed from the farm as well so there are no surprises.”

They utilise maize and grass silage that has all been grown on-farm and hay grown at the support block, with no supplementary feed being bought into the system. Zach and his dad manage the lease block and do all the silage and hay themselves.

They have been palm kernel-free for three years now and prioritise grass-fed production.

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Watching the market trends, Zach anticipates grass-fed free-roaming systems will become the next attribute to receive recognition to maintain the value proposition for NZ agriculture.

“It’s fundamental for dairying in New Zealand and we need to maintain our global reputation for pasture-fed, free-roaming natural and sustainable dairy,” he says.

“I would love for this to be further recognised and monetised going forward.”

Calving starts on July 10 and they rear about 18% replacements.

The calves are collected in the afternoon but if they know the weather is going to be nasty, they will do an evening run to bring them into the warmth and get them fed to help them through.

“It can be a bit tough on little Jerseys when it’s getting cold and wet,” he says.

“We do rear as many replacement heifers as we get, typically selling any surplus animals as rising two-year-olds, but as we are trying to grow numbers we will likely keep more for ourselves over the next couple of years.”

Depending on pasture availability, the calves move to a leased support block 10 minutes down the road at some point after weaning at around 80 to 90 kilograms.

“Since we’re still growing cow numbers, we’re somewhat understocked, so it all depends how we are going for grass,” he says.

“There’s no point sending the calves to the support block and having surplus grass here.”

Zach 13

He and his dad manage the youngstock and until recently, they had not been weighing them but have always been satisfied with their condition and how they look when they enter the herd. It helps that they see them regularly and are able to make nimble decisions about their management.

But moving forward, under the Lead with Pride programme for Synlait they will start weighing and collecting the data.

Mating begins on October 10. They are nominating high BW CRV A2:A2 Jersey bulls for four weeks of artificial breeding followed by a mix of Angus and Jersey bulls with mating finishing on New Year’s Day.

“A2:A2 is our first criteria when picking bulls, and we continually focus on efficient genetics that lean towards once-a-day, udder capacity, milk composition and fertility,” he says.

“We don’t use any intervention during mating but our management practices, the condition of the cows and the genetics we’re using are all contributing to our great reproductive results.”

They have great reproductive performance, with a six-week in-calf rate sitting around 85-87%, which helps keep replacement rates low and gives them options with surplus animals.

“Because we have little need to cull on health traits, we have lower rearing and grazing costs than many,” he says.

The farm business has grown significantly over the past few years, including expanding the herd on the new farm, purchasing two surrounding neighbouring properties and expanding the herd further onto them.

They were fortunate the new farm already had significant sustainability developments, with the effluent and waterway fencing sorted. So their next objective is to plant some shelter and fruit trees.

As well as a change in his personal situation he is now working on consolidating their assets.

“I want to make the most of our assets and the favourable milk prices we are seeing at the moment but that being said, I am always looking for opportunities to make the most from the farm,” he says.

“It’s likely we will expand further in the near future or invest in other land-based assets or additional housing on the farm, all while maximising production while maintaining operating expenses.

“We like to keep things simple, keep the cows happy, keep the team happy and I’m actually just starting life as a bachelor again, which is a completely different world.

“It’s the ease of our farm system that allows me to operate the way I do, if it was any different I wouldn’t have the same flexibility, but we have a great set up and I really enjoy it.”

If he is not working on the farm he is working in the sector.

Only 31 years of age and with both sides of his career progressing well, his timetable is full to the brim.

“My life revolves around dairy, I reckon I work 16 months a year,” he laughs.

“Most of the time I balance everything pretty well, but there are always pinch points where things are happening on-farm, at work and in my personal life, and I need to prioritise, but there will always be casualties and usually it’s my social life.

“But I describe myself like a bicycle – if I’m not moving forward, I’m completely off balance.”

He keeps an eye on his long-term goal of farm ownership, being hands-on where he can and maintaining a professional career at a high level.

“I’m always trying to add value and shift farmers’ milk up the value chain. I want to continue to contribute to the success of New Zealand farmers and rural communities,” he says.

Nominations are open for Fonterra’s board election but a repeat of the drama that rocked the vote three years ago can be ruled out.

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