Taking a flexible approach to transferring farm ownership helps retain young, capable and enthusiastic people in farming. 

Last year Brent Irving of PGG Wrightson Real Estate, Otago won both PGG Wrightson Real Estate Rookie of the Year and the REINZ Rural Rising Star of the Year titles. Having helped establish more than 130 equity partnerships, Brent’s knowledge of various models of farm ownership has played a big part in his real estate success. Brent says the most common form of farm ownership shines a light on the possibilities.

“An excellent first step into farm ownership is an equity partnership, which is essentially no different from a traditional family-owned farm. Often with a typical farm, several family members across generations will be partners. An equity partnership is exactly the same as that, other than that these partners are not blood relations.

From a long career in rural banking, and prior to that as a wool rep, Brent moved to marketing rural property in 2021, so has seen plenty of different farm ownership models.

“For anyone managing someone else’s farm, an equity partnership is the logical and most important step onto the farm ownership ladder.

“When a farm is in traditional family ownership, a succession plan will help keep the up-and-coming generation in farming and give them the opportunity to seamlessly take over the reins. When sons or daughters do not want to go farming, an equity partnership aims to find others in that generation who do, while offering older farmers an easy, low stress way to exit.

“There are plenty of opportunities to be flexible. Linking up the right people, with values aligned, is the key to success and satisfaction,” he says.

One couple Brent has worked with, John and Tracy Herbert farm, at Heriot, West Otago where both are heavily involved in the local community, John as a local councillor, Tracy as a volunteer in several organisations. Their family farm is a 490 hectare property, which they added to by buying a neighbouring 160 hectare farm in 2016. A couple  of years ago they were ready to take the next step, as John explains.

“Farming has given us amazing opportunities, starting with some assistance from my parents, helping us into first farm ownership. We took a lot of risks, and worked hard, though none of that would have been possible without the initial opportunity they gave us.

“In the past few years, personal and family perceptions have evolved, and we have made some investments off the farm. Farming doesn’t become easier as you grow older, and my desire and drive for the industry is less now than when I was younger. We were ready to loosen our bonds to the farm: we can see other opportunities for ourselves and want to make the most of those.

“We brought an open mind to passing the farm on, and over a series of conversations, between ourselves and with Brent, including discussions with others, we looked at what was possible similar to the opportunities we had when we were starting out,” he says.

Ash and Tara Kinaston began in farming by trading stock on a leased block, building equity by buying residential property when they could afford to. When John and Tracy were looking to ease out of farming, Ash and Tara were, and still are, leasing a 530 hectare farm near the Herbert’s farm and had graduated to running breeding stock. Ash says their plans had evolved.

“So long as we were able to ride out commodity prices fluctuations, taking the good with the bad, building up capital stock, growing and breeding our own herd, and improving the lease block to increase performance for long term gain, we were able to progress. We had looked at other properties, though never actually put in an offer, so buying the Herbert’s 160 hectare farm was our first crack at ownership,” he says.

With assistance from John and Tracy, and by continuing their lease, Ash and Tara have increased their stock carrying capacity to almost 7000 stock units.

Meanwhile, Scott and Kjersti Walker, and Cory and Debra Coulston were also setting out in farming on properties adjoining the Herberts.

Scott started as a shepherd, progressed to a stock manager, and graduated to an equity partnership on a farm neighbouring the Herberts, a 500 hectare property Scott managed, then leased from the equity partnership, maintaining the Walkers’ own share in the land. Last year he and Kjersti took the opportunity to lease approximately 210 hectares from John and Tracy, growing their own capacity from 4800 to more than 7000 stock units.  

“We have taken several steps up to grow the business, and with this lease we have gone from 500 to 700 hectares. Although those have been controlled steps, every one has been a challenge, stretching as far as we can each time, and putting it on the line a bit until you get the momentum. It is always a stretch, though manageable,” he says.

Cory and Debra are in a similar position, though with family backing: in partnership with Cory’s brother and parents.

“Our family has been able to grow our business, which is the way it has gone for previous generations. When opportunities like this come up, to lease half the farm right next door, you take them when they arise. By leasing 210 hectares from John and Tracy we increased our stocking capacity by around 15 per cent, and now farm just under 12,000 stock units. My parents set themselves up by trying to add bits on whenever opportunities to grow the business came up. We are repeating what the previous generation has done,” says Cory.

Brent Irving says flexibility is the key.

“I hear young farmers frustrated thinking they need two or three million dollars to buy their own farm, which is beyond reach for many. So long as you consider all the options, there are ways to graduate to farm ownership that don’t require that amount of equity, and that don’t require marrying well or being the child of someone with enough money.

“Farming is an industry that is willing to help: plenty of people are prepared to provide guidance or a leg up to those who need it. John and Tracy have done that for Ash and Tara, Scott and Kjersti and Cory and Debra, helping them to take an important step in their farming careers,” he says.

From John Herbert’s perspective, selling the farm outright might have been a better option financially, though retaining ownership for now gives his children an option or opportunity in the future. 

“That said, not every decision is about money, and we have the satisfaction of seeing the next generation take that important step, without altering the trajectory of our own lives.

“All three couples are good farmers and good neighbours. As a consequence of us helping them to move into farm ownership, they are staying local, meaning the local squash and rugby clubs keep them as members, and local businesses keep them as customers. To be able to do that and help them become better established is extremely rewarding. 

“If we can’t help someone, what are we doing here?”

Property Express - Out Now

Welcome to our autumn 2023 edition of PGG Wrightson Real Estate’s Property Express. From the first page to the last, this magazine is packed with premier rural properties which could be the setting for your next chapter.

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