Leasing and Joint Venture Tom Kininmonth & Mooleric Contract - - PowerPoint PPT Presentation

Leasing and Joint Venture

Tom Kininmonth & Mooleric Contract Share Farming Agreement (CSFA)

History

2008 finished VCE 2009 Jackroo NT/WA 2013 Graduated Bachelor of Commerce 2015 joined Kininmonth Family Trust 2016 Mooleric CSFA

Kininmonth Family Trust

Grazing 700 HA Winter Crop, 300 HA Summer Fodder Crop, 100 HA

Livestock 3100 1st x and Composite ewes joined to maternal and terminal rams Aiming for 800HA @ 15DSE’s by 2022 (12,000dse’s) Cropping Rotation of Wheat, Barley, Canola, Faba Beans, Forage Rape

Personal Income

Why joint venture?

• Contractor (me)
• Mooleric Land Owner

Passion ate About Farmin g Drive to grow wealth $ Limited Capital

• An improved asset
• Relationship between the land
• wner and the contractor: trust

and loyalty

• A remuneration from the

agreement that allows her to invest in on farm capital expenditure

Structure CSFA

Mooleric 375hectares, 8 DSE’s/ha with the potential of being 12DSE’s/ha Proposal I put together:

• 5 year farm plan: fencing subdivision, rock clearing, pasture development, water

points, poly

• Budgets for years 1 to 5
• As well as a tour of farms that my father and I manage showing what I could

achieve with regard to pasture production and animal husbandry and overall farm management and development Agreement

• Put together by Duncan Ashby -Pro Advice, Mooleric land owner, myself and a

lawyer

CSFA - Roles

Contractor (Tom)

• Provides breeding livestock
• Farm management expertise
• All farm labour ie; drenching,

jetting etc

• Farm planning ie; annual

pasture development, new fencing water points etc

• CSFA budget, monthly

cashflow update, quarterly & annual reporting Land Owner (Mooleric)

• Contributes land and all fixed

equipment ie; yards, woolshed

• Sets up the CSFA farm
• verdraft account

Financial Structure CSFA

Payment to the farmer:

• Basic return
• 40 % share of the divisible

net surplus Payment to the contractor:

• Basic Remuneration
• 60 % share of the divisible

net surplus

Contractor remuneration rates per/head: includes market rates for all sheep work (except shearing) and a rent for the sheep. Landowner (farmer) - basic return based on approximate lease prices less 10% maintenance spend

Contract Farming – Sheep Example

1,000 acre (404 ha) Australian Example - Farming Contract (625mm Rainfall) Output Area (ha) $ $ Sheep Sales 404 253,481 Wool Sales 39,652 Total Income 404 293,133 Total Variable Cost 67,218 Gross Margin (before direct sheep labour) 225,915 $/ha Contractors Basic Remuneration @ $/ha 82 32,998 Overheads (agreed fixed costs - on this area only) 28,260 Total Overheads 61,258 Net Return 164,657 Farmers Basic Return @ $/ha 133 53,732 Divisible Return 110,925 Farmer 50% 55,462 Contractor 50% 55,462 Total Return $/ha $/ac Farmer (return to land and some management) 270 109 109,194 Contractor (return to management & stock capital) 219 89 88,460

Internal Reporting

• Farm management accounts are prepared

for an annual review in August

• Monthly cashflow statements are

prepared using (Figured and Xero) forecast v actual

• A quarterly farm report is also prepared

Key learnings, key points of success

• Time management is crucial
• Communication
• Intermediary: Duncan Ashby
• Key values: honesty, integrity, treat

the farm like its your own

Questions?