Successful contract milking comes down to creating a good relationship between the farm owner and the milker based on good communication, empathy and being the right ‘fit’ for the farm.

The roots in establishing that relationship are often done before the contract is signed by shopping around and taking the time to find a contract job that was profitable, Federated Farmers dairy vice-chairperson Richard McIntyre says.

“Don’t be afraid to turn down positions that don’t fit, you don’t have to say yes to the first one and take your time to get the right one,” McIntyre said, speaking during a webinar on Contract Milking for Success.

That was important. If an aspiring contract milker got turned down, he says it could be they were the wrong fit for that particular farm.

“You’ve dodged a bullet there too,” he says.

Once the contract milker has found a farm where they think it is a good match, get to know the farm owner and how they like to run things and run it that way.

“Every farm owner is particular about certain things. Run it the way they like it,” he says.

Do not underestimate the value of being easy to get along with.

“The number of farm owners that really struggle because their contract milker’s difficult to get along with is amazing,” he says.

It was something that was often overlooked as people concentrated on farm skills such as pasture management and production.

“If you’re easy to get along with, you don’t have to be absolutely perfect. Those little imperfections will be looked past.”

The webinar outlined how contract milkers can set up and maintain a good relationship with farm owners.

The federation’s sharemilker farm owners’ chairperson John Numan says farm owners should let prospective contract milkers know as much as possible about themselves during the interview stage.

“The more you talk, the more you get to let them know and then the two parties get to know their personalities and you can quickly work out if someone’s been upfront, honest, clear and concise,” Numan says.

The organisation’s sharemilkers’ chairperson Aaron Passey says people need to do their due diligence and not go into a contract blind.

They should also not be afraid to go above and beyond what their contract stipulates. It went a long way to build up a contract milker’s reputation if they are prepared to tackle jobs they do not necessarily need to, such as fence repair or weed control.

“All those little things that you can do that might take 10 minutes out of your day will make you look a lot better to your farm owner because you’ve gone above and beyond, it makes you look better to the neighbours and everyone else in the district,” Passey says.

DairyNZ’s Paul Bird says there were 2300 dairy businesses that operated as contract milkers and are an essential part of the dairy industry.

It allowed hard working people to run their own businesses and grow wealth. While the system was working well, it was not without its challenges.

Establishing a fair risk premium between contract milker and farm owner was key to meeting some of those challenges, he says.

For contract milkers going into a partnership with the farm owner, they had to have a premium that is above what a farm manager would be paid.

This is because the contract milker takes on extra risks and responsibilities they otherwise would not have as a manager, he says.

The process to establish what the premium is needed a thorough approach.

“The first step going into this relationship, the fundamental contract has to be suitable financially, that the contract milker can make a fair profit and also from the farm owner’s perspective as well,” Bird says.

People have to be compatible and have a good understanding of the contract for it to be a successful partnership.

There was no magical number for getting that risk premium. There are numerous variables that both parties needed to consider before coming to an agreement on what an appropriate premium is.

These range from the skills and experience of the contract milker, the support the farm owner may or may not be able to provide, the on-farm infrastructure and the complexity of the farm system.

“There’s no right or wrong answer, but these are the factors you need to think about,” he says.

Questions around what the right contract rate is are the wrong questions to ask when examining budgets of a prospective farm.

Instead, contract milkers should ask what the right risk premium is coming onto a farm that is appropriate in partnering with the farm owner.

“Then you would look at the cost structure and the contract rate to try to get to that premium that everyone is comfortable with,” he says.