Kapenga M Trust, Rotorua

March 2005
The Trust was formed in 1983 when it took over controlling its own affairs from the Department of Maori , which had developed the land on behalf of the Maori owners from when the individual owners shares were first amalgamated in 1950. The Trust consisting of 6 Trustees now represents some 700 owners/shareholders. The trust employs a secretary/accountant and farm and properties supervisor, in the role of general manager. John Perrin has been with the trust for 15 years, and is responsible for initiating new areas of development, managing the development itself, and being responsible for the yearly performance of the business. With the farm managers and trustees, he prepares annual budget projections and works with the farm managers to achieve the goals of the business plans. The trust declares a dividend annually to its shareholders; provides for education grants to the shareholders and their children, and an annual grant to elderly shareholders (those over 65 years). Total distributions are around $150,000 a year. The trusts business is managed on a commercial basis to provide profits for distribution and further growth of the business. The land is not farmed to provide employment for the trusts own people unless they are the best or equal best applicants for any position on offer.

The sheep and beef farm won the Maori Farmer of the Year Award (Ahuwhenua Cup) in 2003.

The Trust property is 1250ha just south of Rotorua city: 690ha sheep and beef, 218ha deer, 334ha dairy, 300ha forestry. The trust leases a 292ha sheep and beef farm (Tokerau block) which winters 600 cows from the dairy unit for eight weeks, carries 1400 breeding ewes, and finishes 230 bulls each year.

The sheep and beef farm employs a farm manager, David Meade, and one permanent staff member, the deer unit a part time manager, Pauline Meade, with some help from casual labour. The dairy farm contracts with a sharemilker, Reza Abdul-Jabbar, in his first season at Kapenga, who is Massey University trained, Indonesian origin and has experience with large herds. He provides the 1000 dairy cows and the labour. Planning process: Against the background of a strategic outlook (2001), the farm supervisor/consultant in consultation with farm managers/sharemilkers prepare annual budgets during May and June. The annual business plan must meet or exceed the targets in the strategic outlook. Managers receive monthly financial reports during the financial year (July 1 to June 30).


4000 breeding ewes, 1200 hoggets

186 breeding cows Friesian-Angus or Freisian-Hereford

Charolais terminal sires

400 dairy beef bulls

1000 dairy cows

2000 deer

Kapenga Trust runs a highly productive ewe flock. Some ten years ago a half-bred Finn x Romney ram was introduced and mated to the pure bred Romney flock. The resulting progeny were quarter-bred Finn, three quarter Romney and were mated back to a quarter Finn, three quarter Romney ram. Two years ago the trust introduced a composite ram to provide more emphasis on meat production and to improve lamb survival of the quarter Finn ewes. The ewe flock will become a composite bred flock and is producing at 147% lambing. This contrasts with production 12 years ago at 94% lambing and 7 years ago at 110% lambing. Wool production has been maintained but the value increased because the Finn cross ewe wool is 1-2 microns finer. All lambs are finished to 16kg carcass weights. Texel breed terminal sires were used over a proportion of the ewe flock but now only the composite ram is used over all ewes.

The trust runs a small half-bred (Angus x Friesian) breeding cow herd acting as an important pasture management tool over the summer, as well as providing a source of finishing bull and heifer calves. Replacements for this herd are purchased as needed. Cows are mated to a Charolais terminal sire and all progeny are finished the males are slaughtered as 18 20 months bulls at 280 kg carcass weight and the females at 285kg at 24 30 months. From now on the female progeny will be sold as weaners in order to simplify livestock management.

In addition to their own-bred animals, 360 Friesian bull calves are purchased to be finished with the Charolais cross animals. These animals are sourced from specialist rearers at 100kg liveweight and three months old. They are slaughtered at 500kg (275kg carcass weight) and 18 20 months old.

After a full feasibility study carried out in 1997, a deer unit was established in 1999 on 218ha of the then sheep and beef farm, managed by Pauline Meade. This unit is set up primarily for meat production running a herd of 800 Red hinds to produce 350 stags and 200 hinds for slaughter at 20 months; stags at 60 65kg carcass weight and the females at 50 55kg carcass weight. This year half of the hinds will be mated to a Wapiti stag (three quarters elk, one quarter red) as a terminal sire with the balance mated to red stags to provide replacements.

The aim is to finish a high proportion of these progeny at 60kg and nine months of age.

In 1994 a feasibility study was carried out by Perrin Ag Consultants on establishing a dairy farm on the better land of the sheep and beef unit. Using conservative milk solids returns the analysis showed an internal rate of return of 8.2% on investment, a break-even point of three years (the point at which the net cash return after the dairy development was greater than if nothing had been done) and a payback point of 11 years. Close to one million dollars was invested on the dairy development which was managed by Perrin Ag Consultants and found one year down the track that the farm achieved the projected year three surplus in year one as well as the year two milk production. The dairy unit began with 278 hectares, and since then two additional areas have been added to total 334ha currently, milking 1000 cows. Production is now over 300,000 kg milksolids annually, double what it was at the beginning, 10 years ago.

Measured against the targets (in brackets)in the strategic plan, in 2003-04 Kapenga sheep and beef unit achieved the following physical and financial measurements:

Lambing 139% (140%), hoggets 81% (0%), calving 87% (90%), lamb weights 16.4kg (16kg), number sold store 32% (10%), drafted at weaning 5% (20%), mean lamb finishing 15 March (28 Feb), meat production 337kg/ha (300kg), paddocks 85 (75), stocking rate 14.1/ha (14kg), wool kg/SSU 4.4 (4.1), economic farm surplus $183/ha ($350), direct expenses/gross farm income 77% (50%).

On the deer unit the results were:

Fawning 85% (90%), deaths 0.01% (< 1.5%), stocking rate 159 su/ha (150), venison sold 14.3kg/ha (13kg), direct expenses/gross farm income 75% (34%), cash surplus $132/ha ($350/ha). Deer unit began with change in breeding programme to allow more animals to be finished at the yearling stage rather than the current two-year level. It will take two years to see any result from this change, but there will be a significant impact on production and profit. Wapit-cross terminal sire will be used over most of the Red hinds.

On the dairy unit the results were:

Milksolids production 300,155kg (300,600kg), MS per cow 300 (300), MS per hectare 899 (900), direct expenses/gross farm income 39% (57%), economic farm surplus $1157/ha ($927), EFS return on capital 5% (4%). The dairy unit is a significant contributor to trust profits, with contributions of $125,000 and $363,000 in the past two full seasons. Contribution from dairy farm was 26% of trust cash surplus in 2002-03 and 72% in 2003-04.