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

Leasing and Joint Venture Tom Kininmonth & Mooleric Contract Share Farming Agreement (CSFA)

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

Kininmonth Family Trust Livestock Summer Fodder 3100 1 st x and Composite Crop, ewes joined to maternal and 100 HA terminal rams Aiming for 800HA @ Winter 15DSE’s by 2022 Crop, (12,000dse’s) 300 HA Grazing 700 HA Cropping Rotation of Wheat, Barley, Canola, Faba Beans, Forage Rape

Personal Income

Why joint venture? • Contractor (me) • Mooleric Land Owner - An improved asset - Relationship between the land owner and the contractor: trust Limited and loyalty Capital Passion - A remuneration from the ate agreement that allows her to About invest in on farm capital Farmin expenditure g Drive to grow wealth $

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 Land Owner (Mooleric) - Farm management expertise - Contributes land and all fixed - All farm labour ie; drenching, equipment ie; yards, woolshed jetting etc - Sets up the CSFA farm - Farm planning ie; annual overdraft account pasture development, new fencing water points etc - CSFA budget, monthly cashflow update, quarterly & annual reporting

Financial Structure CSFA 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 Payment to the farmer: Payment to the contractor: - Basic return - Basic Remuneration - 40 % share of the divisible - 60 % share of the divisible net surplus net surplus

Contract Farming – Sheep Example 1,000 acre (404 ha) Australian Example - Farming Contract (625mm Rainfall) Output Area (ha) $ $ Sheep Sales 253,481 404 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?