Sowing the seeds of diversity in Victoria

Family seed operation a shining example of farm vertical integration

Grower Stories
Baker Seed Co managing director Ashley Fraser in a field trial at Henty, NSW. Ashley is a strong believer in business diversity. PHOTO Andrew Cooke

Baker Seed Co managing director Ashley Fraser in a field trial at Henty, NSW. Ashley is a strong believer in business diversity. PHOTO Andrew Cooke

Aa

Communication is key to success for vertically integrated southern seed company.

Aa

A keen eye for a business opportunity about 50 years ago led to grain grower Geoff Baker setting up a seed cleaning company that is now part of a highly successful vertically integrated operation at Rutherglen, in north-east Victoria.

Geoff spied a gap in the market for subclover seed, so he and two brothers set up Baker Seed Company and started growing crops to produce seed.

These days, Baker Seed employs 20 people and dovetails perfectly with the family's grain growing operation, Lilliput Ag.

Geoff still keeps a weather eye on the two companies, which are managed by his sons-in-law Andrew Russell and Ashley Fraser (pictured above).

Mixing it up

Lilliput Ag managing director Andrew Russell at the Henty Machinery Field Days in NSW. PHOTO Andrew Cooke

Lilliput Ag managing director Andrew Russell at the Henty Machinery Field Days in NSW. PHOTO Andrew Cooke

Andrew runs Lilliput Ag, which comprises 2500 hectares of cropping country near Rutherglen.

He credits the operation's ability to produce wheat, barley, triticale, oats, canola, safflower and a range of legumes and pasture seeds to Geoff's willingness to be an early adopter of modern farming methods and the decision to start liming operations on his property in the 1980s - which means his soils are in an ideal 5.2 to 5.7 pH range.

Most of the farm's production goes to Baker Seed for cleaning, although the seed company's growth means it now buys from several contract growers.

Lilliput Ag also allocates 20 per cent of its land to sheep and has a small breeder cow operation. Waste matter from Baker Seed is used as a low-cost livestock feed to minimise waste.

"We have a basic four-year cereal/legume/cereal/canola rotation and everything that can be used for seed is quality-assured and stored in isolation until it is sold," Andrew says.

"We now supply only five to 10 per cent of Baker Seed's total production.

"We have a lot of outside growers who supply us with cereals and pretty much all cultivars.

"These growers are hand-picked, because they need to understand quality assurance and the parameters and logistics involved," he says.

Baker Seed supplies growers Australia-wide, albeit with a focus on the eastern seaboard.

It has diversified significantly since 1970, with new arms of the business in contract packaging, seed coating and sizing, feed mixing and blending - even bird seed.

Andrew says his and Ashley's roles are completely independent and the two companies are owned and managed separately, although there is "quite a bit of cross-over". The pair speak several times a day.

Ashley participated in the Nuffield Scholarship program several years ago to investigate seed coating technologies.

Open lines

"Communication is paramount with running the two businesses side-by-side," Andrew says.

"There is a lot going on and we have always had a strong commitment to communicating as much as we possibly can."

Andrew says there have been issues over the years - as anyone would experience in a business - but the family has always managed to work them out.

"The succession plan from Geoff and his brothers was finished last year, so we really are into a new phase, although they are still playing a role," he says.

"It has been a long road with lots of challenges, but the family unit has been very resilient."

The key benefit from vertical integration is diversity, Andrew says.

"I think in agriculture today you need to have diversity to be resilient and sustainable.

"In our business, we have that with livestock in the system and the ability to value-add and sell produce to the seed business.

"Also the seed business processes other people's seed and summer crops. It all adds income sources and another element to the business."

Understanding your market

Andrew says it's also really important to educate yourself about your market.

"If we have learned anything over 25 years it is not to rely on the adage 'if you build it they will come'," he says.

"You really need to understand your market and be an expert in your field. If you are going to do something, you need to be 1000 per cent professional about it.

"We have strived to be in the top 20 per cent of growers, and the same applies to the seed cleaning business.

"It's important to have an open mind about how you can achieve something, and then stay ahead of the game using whatever you have to achieve outcomes."

Skill development

Field trials, such as those run by Baker Seed Co at Henty, NSW, provide valuable local information. PHOTO Andrew Cooke

Field trials, such as those run by Baker Seed Co at Henty, NSW, provide valuable local information. PHOTO Andrew Cooke

Ashley and Andrew place a high value on academic study and they each have a diploma in agribusiness and an advanced diploma in agriculture.

They have employed a local agronomist for the past 15 years, as well as seeking marketing and business advice.

Andrew is a member of GRDC's Southern Panel and serves on the Regional Cropping Solutions Network, while Ashley completed a Nuffield Scholarship in 2012 and is chair of the Victorian Farmers Federation grains council.

"Ashley and I both come from dairy farms in Victoria, although our families didn't continue on with the farms," Andrew says.

"We found ourselves in the trade and manufacturing industries, then we met Geoff's daughters and came here and found there was an opportunity to work in this business.

"That started out being very short-term but then became long-term."

In recent years, they have joined a network of progressive rural businesses, called Ag EDGE, which offers facilitated peer review, external expert advice and information sharing.

"This involvement has been very helpful to us as a board of directors," Andrew says.

"It essentially acts as an independent chair of our board. We have picked up so much, particularly in terms of our wives (Geoff's daughters Pam and Sue) working in the business."

Building soil health and risk management

On-farm, Andrew says he has a strong focus on soil health and trying to boost organic carbon levels.

"We practice strategic tillage and the placement of lime to depth to deal with stratification and acidity issues that arose after 10 to 15 years of cropping," he says.

"We are also very mindful of resistance in diseases that can arise from just growing one cultivar consistently, so we try to spread it."

Andrew says it is advantageous to grow a wide range of crops, particularly in relation to the area's susceptibility to frost.

"We might have 10 different wheat varieties growing in any given year, all with different maturities, which helps with frost," he says.

"But it also tends to make things harder, because you need to be very flexible and very organised. Our labour force is bigger (than the average) for that reason.

"We have learnt to live with frost a lot better than before.

"A lot of the work that has happened over time - as well as a lot of breeders and researchers understanding frost - has been in that area.

"Frost can be a major issue for us, but it is the same for many other growers, and generally if we get hit by frost it is during flowering, not so much stem frost."

In 2019, Andrew is hoping for spring rains to help his crops reach their potential, after 260 millimetres of growing season rainfall (compared to a 370mm long-term average).

Lilliput Ag's long-term average crop yields are 4.5 tonnes per hectare for cereals and 2.2 to 2.5t/ha for canola and legumes.

More information: Andrew Russell, arussell@lilliput-ag.com.au, 0417 401 004; Ashley Fraser, Ashley.fraser@bakerseedco.com.au, 0418 176 764

Aa