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High risk, high reward

25 Nov, 2012 03:00 AM
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It was cheaper for us to buy country and pay interest on it than buy grain and pay agistment.

INSTEAD of buying feed during the devastating drought last decade, Riverina couple Ian and Camilla Shippen (pictured) decided to buy properties.

From an outsider's perspective the Shippens admit increasing their debt load at a time of climatic uncertainty might have seemed crazy, but upon closer inspection it appears to have been a stroke of brilliance.

They have emerged from the drought with an even bigger flock than before and increased the size of their aggregation.

The Shippens are wool growers based at "Liewah", Moulamein. They run a flock of about 45,000 Merino ewes across an aggregation of properties at Moulamein and Wagga Wagga covering some 97,000 hectares.

"It was cheaper for us to buy country and pay interest on it than actually buy grain and pay agistment. We just basically bought more properties and spread our stock thinly to try and mongrel through it," Mr Shippen said.

"It was lucky, we took some risks. We can sit back and laugh about it now but we had lots of sleepless nights.

"We wanted to come out of it at the other end; we had too much debt to sell-down and restart. It sounds ridiculous but we couldn't afford the luxury of saying 'righto, we're going to cut back to 10,000 ewes and rebuild afterwards'.

"We hit the ground running when that drought finished. That drought could have broken us if we didn't come up with something out of left-field, and that's what we did."

The Shippens purchased Barton Station at Ararat, Victoria, and "Pine Park" near Wellington to spread keep their flock alive during the drought.

At the peak of the drought they completely de-stocked one of their core properties, the 43,700ha "Baldon", Moulamein, and were keeping lambs alive by trucking them to "Pine Park".

They have now sold Barton Station to Hassad Australia and "Pine Park" to a neighbour.

While Banyandah Pastoral's focus is now almost entirely wool and prime lambs, when Mr Shippen first took ownership of the home block "Banyandah", Moulamein, from his father John in the 1990s, the focus was intensive irrigation.

The Shippens lived on the 1700ha "Banyandah", where they grew some 1000ha of rice, for a couple of years before they married in 1996. Soon after they purchased the 8000ha "Chah Sing", where they lived until moving to "Liewah" on the banks of the Edward River two years ago.

Mr Shippen said now they only used their water allocations for pasture irrigation, as cropping did not allow enough security. Mr Shippen said as they bought new properties to increase the aggregation in the last decade, they had traded water.

"We bought and sold a lot of water and it kept our heads above water financially," he said.

"We've done a lot of that, buying country and selling water off and using a part of your operation that was a capital cost, converting that to income and making the water a variable cost in your operation on a temporary basis."

So Mr Shippen - who ran a successful sheep contracting business in the 1980s and 90s before taking over "Banyandah" - went into sheep.

The Shippens started with a flock of 2000 ewes from long-time wool classer Bob Simpson, who has been instrumental in helping the Shippens grow and develop. Mr Shippen said he was not beholden to any stud and was focused on breeding heavy-cutting sheep.

"Our biggest priority is wool cut; we've just got to have wool cut," he said.

"We've ducked down that track of lots of wool and hopefully it pays off. You do what's best in your country, and this is good wool-growing country.

"We wanted some security in the operation. Every day I wake up I know we've cut another six or seven bales of wool."

The Shippens have created a name selling their wool under the Bundy label - taken from one of their properties "Bundyulumblah", Moulamein - but Mr Shippen said he wanted to improve the genetics even further.

The Shippens have now taken a backseat role in the day-to-day management of the operation, appointing David Wilson to manage their Moulamein country and Derk Meurs to manage the 5000ha Wagga Wagga aggregation, "The Pinnacles". The Shippens own "The Pinnacles" in partnership with Mr Shippen's brother Malcolm and his wife Siobhan.

The drought drained the couple.

"I just found our workload was getting too much, we were getting exhausted," Mr Shippen said.

"That's why we've moved down here (to 'Liewah'). It just gives us time to have a look at our business, rather than working in it all the time."

One of the greatest challenges of running the Shippen’s sprawling Riverina operation is management. Even moving rams across the group of properties for joining is a headache, hence why the Shippens own two prime movers.

"There are a lot of issues with our operations but one of the biggest is the cost structure. The second one is logistically, we're spread out. That costs us in management," Mr Shippen said.

"At the moment we're trucking rams out to another place to get shorn and ready for joining, usually people would just walk their rams out."

Mr Shippen, 46, is determined to retire when he hits 60 and wants to have enough country to break up for children Will, 15, Emma, 13, and James, 10, if they're interested in farming, or sell if they're not.

"Money is a driving force but it's the thrill of trying to do something that people say can't be done. That's what drives you," he said.

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cont.... And guess what? you bet it, they were predicting a 70-80% of above median rainfall. How
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Who is foolish? The only people that are foolish are all the media reports we get about how we