ROD Banks is managing director of CowBank, Australia's first cattle rental business specialising in working with dairy farmers with a focus on growing dairy businesses.
After working on the family sheep/wheat farm in Queensland, Mr Banks worked in agri-tourism enterprise Australian Woolshed followed by corporate farming Croppa Creek NSW (cotton, wheat).
He first became involved in the dairy industry in 1994 as a farm manager on King Island, managing 1800 cows, and went on to operations general manager, including the factory, before establishing CowBank in 1999.
Mr Banks designed and commercialised a 'rent-to-buy' product that enables capable dairy farmers with limited capital to rent and subsequently buy dairy cattle.
CowBank has since funded over $70 million in cow herd assets, with proven dairy farmer credit and asset management systems.
"We are a small agricultural finance company which specialises in leasing cows to dairy farmers in Victoria, South Australia, southern NSW and Tasmania and have leased more than 48,000 cows to over 250 dairy farmers," Mr Banks said.
"We began Australia-wide then specific regions, and are focused now up to Bega, NSW, Findley, NSW, and across to Adelaide and Tasmania from a Melbourne base – 40 per cent are in the Western District of Victoria, 30pc in Gippsland and 20pc in northern Victoria and Tasmania."
There are two parts to the business – herd rental with 17,000 cows funded by Suncorp, and asset management, "raising capital to buy farms with co-ownership, 'rent to buy' replicating what we've done with herds."
CowBank's aim is to help farmers build their herds growing business equity and increasing profits, add value through knowledge and expertise and focus on being a specialist dairy rental company – not bankers – so dairy farmers can achieve their goals.
Between 2006 and 2010, Mr Banks and his partners in CowBank entered an engagement with Warakirri Asset Management to form Warakirri Dairies with investment from Australian superannuation funds raising $100m.
As manager/adviser, the CowBank team was instrumental in establishing systems and processes for acquiring and operating 11 farms, milking more than 7500 cows and negotiating significant price premiums for aggregated mild supply.
CowBank business development manager Luke Fitzpatrick explains: "CowBank started because Rod (Banks) couldn't obtain the livestock finance he wanted when he came out of managing King Island Dairies operation."
"One of the partners in King Island said to let him know if he ever came up with a micro-finance or micro-capital idea that he thought he could run and make work.
"So CowBank was formed between an investment banker in Melbourne and Rod and ran for eight years or so, then they brought a group of farmers and farm service providers into the shareholding," he said.
"The business has evolved out of informal talks between farmers of leasing and renting cows and selling them on vendor terms or lease-purchase arrangement.
"We identified the need to commercialise that up to $10m worth of cows quite quickly for multiple years in the early 2000s, but now we're doing about $8m of purchases per year as we have a more mature portfolio now."
CowBank's mantra is 'helping you grow'.
"If you think about it, our industry has been in the doldrums over the past decade and it's probably at a point where it's either going to grow or it's going to die – we want to be part of a growing industry and we're really focused on the next generation farmers," Mr Banks said.
"As a part of that Luke and I have been working on raising capital for a new product we call the Dairy Farmland company (DFC)."
Once operational, DFC will create a pathway for young farmers to progress to farm ownership and, in doing so, sustains future farming communities.
It is a unique farm management model for dairy farmland that capitalises on CowBank's proven capabilities and this model will create an investment portfolio of prime farmland under scalable 'rent-to-buy' management.
"We want to create that lease finance product and apply it to the dairy farmland asset where we're already applying it to the herd asset," Mr Fitzpatrick said.
"We are debt funded at the moment, for the herd asset and because of the capital growth nature of the farmland, but we are looking at getting that funded with equity – we're a long way down that track but not there yet."
Mr Banks concurs: "We're absolutely committed to this process, we've got to provide capital if we're going to grow this industry and we've got to provide a safe way of bringing that capital in to dairly land".
