With time running out, all options were on the table.
A suggestion from Tim’s brother led them to Pricewaterhouse Coopers (PwC) to ask if they had any investors interested in dairy.
Just two months later and by mid-July, an equity partnership was signed and farming began in August – just in time for calving.
Tim explains PwC had a department linking investors with businesses.
“It just so happened that PwC had a family looking to invest in dairy, they had already worked through a lot of the logistics and processes when we reached out,” says Tim.
The Humphris entered an equity partnership with the Hewitt Group. The Hewitt group, led by Brian Hewitt and his son Jonno, brought an experienced background with a range of portfolios.
The Hewitts had two main conditions.
“The farm had to be in a secure rainfall area and the partnership had to include equal shares in the land as well as the operating side of the overall business,” explains Tim.
This ensured shared benefits from land value growth and avoided conflicts over capital improvements.
While it may not suit those with less initial equity, for Tim and Marie this was ideal, especially given the rise in land prices since 2019.
Over the last six years the partnership has grown significantly.
At the Nirranda South farm cow numbers have increased from 350 to 600, and land ownership has expanded from 290 to 490 hectares.
Growth wasn’t a requirement of the agreement, it happened organically.
Marie credits the success of the equity partnership to mutual respect and complementary skills.
“We each bring specific skills and experiences to the partnership. Brian has decades of business experience and Jonno brings financial expertise.
“Tim brings the dairy farming knowledge and practiced as a vet for 15 years, and I have worked in several corporate roles focusing on HR and project planning,” says Marie.
“The key to it working well is transparent and honest communication from all involved.”
Decisions are made collaboratively, using a simple framework: What’s the cost? What’s the benefit? And, what’s the return on investment?
Other than land purchases, the most significant investment on the farm has been the installation of a concrete feedpad for 650 cows, built a year ago.
Funded through cashflow, the farm currently reinvests all profits.
Tim and Marie draw a wage from the operating business, with future profit distributions to be made based on each party’s investment share.
Quarterly on-farm meetings and monthly online check-ins keep everyone aligned.
The partnership has also grown into a friendship, with the Hewitt family visiting annually from Melbourne for a farm day, giving their 11 children a glimpse of rural life.
Tim and Marie are happy with their route into farm business ownership and look forward to what the future holds.
“Using this model allows us the benefits of scale, access to different business knowledge and more overall equity to leverage for growth and improvements,” says Tim.
The couple say they are lucky to have met the Hewitts and forged the partnership.
However, it is clear their success isn’t just luck.
It’s about identifying opportunities, evaluating them with a business mindset, and having the practical knowledge and drive to make them work.
Equity partnerships are gaining in popularity, particularly in family succession planning. For those exploring similar paths make sure to ask questions, build connections, and seek professional advice from accountants, bankers and solicitors.
To find out more about share equity arrangements and read more case studies visit: https://thepeopleindairy.org.au/home/training-development/planning-for-the-future/shared-equity-arrangements/
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