Ive just had a change to read the stats to this little blog and its interesting to read people from as far away as Romania, The Ukriane and Canada are reading as well as many people from Australia and other destinations.
Let me just say thank you very much for taking the time to stop by and read - in todays fast paced world of www. something or other its quite a feeling to have your thoughts read around the world!
So please feel free to leave some comments, let me know where your from and what you do with yourself?
Look forward to hearing from you all!
Friday 23 September 2011
Saturday 10 September 2011
Big hats and sunsets
I was speaking with a great mate today - we've been best of mates since the first day we met in the main street of Horsham having fish and chips - funny how you remember events!
We are both from farming backgrounds and both have our own businesses - I guess now both of us are closer to 40 than 30 some big questions start to pop up.......
We both came pretty quickly decided that our futures lie in the farming game but for us both to remain a lot of things need to change and it got me to thinking if other people are thinking the same way.....
1) Expansion.
This is not negotiable, every year our base line figure for growth needs to be 15%, this is a big ask but it means some buffering against the declining terms of trade and the shrinking value of a dollar
2) Finance.
Plain and simply Australian mainstream banks are still stuck in the 1960's. Structural finance for agriculture is in the dark ages. The idea that farmers rely on land to borrow against in the whole is completely ridiculous and is slowing growth of farming businesses massively
3) Value adding.
Ive always been pretty convinced Im a low cost commodity producer and thats where things should lay - over the last few months starting a meat brand (www.certifieddorperlamb.com) has started opening up a whole new world to me and I now firmly believe where appropriate and cost effective value adding of product through the chain closer to the consumer will continue to grow as part of our business
4) Contractual Production/Intellectual Property.
Its works for Monsanto doesnt it? Perhaps our farming businesses now need to look at 'owning a production system' and utilising in house IP to ramp up production through third party providers. The pork and chook industries have this sussed out and I reckon a lot of cattle and sheep producers should research this further
5) Think like a corporate and not like a family business.
Its time we realised we are in control of multi million dollar businesses and we need to act like it - if not a board of directors then a board of management is required to keep farming businesses growing.
Ive been reading a lot lately about some of the growth in agriculture in South America with the likes of El-Tejar, Los Grobos and Maggi Group to name a few - these are businesses build on leasing land, modern principles that work in every retail business around.....except Australian agriculture it would seem.
The South American agribusiness powerhouses are growing at a massive rate with Los Grobos now farming around 630,000 acres with a variety of crops - there is no reason similar style businesses shouldnt be happening in Australia.....that is unless you want to finance them from an Australian bank!
So there you have it for some afternoon thoughts - agriculture isn't all about big hats and sunsets, theres some serious decisions which will shape our future being discussed at a lot of kitchen tables!!
Oh year.......and then theres carbon farming but thats a whole different story!!!
We are both from farming backgrounds and both have our own businesses - I guess now both of us are closer to 40 than 30 some big questions start to pop up.......
- Is there a better way to do things?
- Should we be expanding, standing still or selling assets to invest off farm?
- Is there really a viable future in our current businesses?
- Is mother nature really an Al Qaeda terrorist?
- Finance, finance and finance - how to finance when the banks arent keeping up with changes
- And of course structure, outside participation and working together
We both came pretty quickly decided that our futures lie in the farming game but for us both to remain a lot of things need to change and it got me to thinking if other people are thinking the same way.....
1) Expansion.
This is not negotiable, every year our base line figure for growth needs to be 15%, this is a big ask but it means some buffering against the declining terms of trade and the shrinking value of a dollar
2) Finance.
Plain and simply Australian mainstream banks are still stuck in the 1960's. Structural finance for agriculture is in the dark ages. The idea that farmers rely on land to borrow against in the whole is completely ridiculous and is slowing growth of farming businesses massively
3) Value adding.
Ive always been pretty convinced Im a low cost commodity producer and thats where things should lay - over the last few months starting a meat brand (www.certifieddorperlamb.com) has started opening up a whole new world to me and I now firmly believe where appropriate and cost effective value adding of product through the chain closer to the consumer will continue to grow as part of our business
4) Contractual Production/Intellectual Property.
Its works for Monsanto doesnt it? Perhaps our farming businesses now need to look at 'owning a production system' and utilising in house IP to ramp up production through third party providers. The pork and chook industries have this sussed out and I reckon a lot of cattle and sheep producers should research this further
5) Think like a corporate and not like a family business.
Its time we realised we are in control of multi million dollar businesses and we need to act like it - if not a board of directors then a board of management is required to keep farming businesses growing.
Ive been reading a lot lately about some of the growth in agriculture in South America with the likes of El-Tejar, Los Grobos and Maggi Group to name a few - these are businesses build on leasing land, modern principles that work in every retail business around.....except Australian agriculture it would seem.
The South American agribusiness powerhouses are growing at a massive rate with Los Grobos now farming around 630,000 acres with a variety of crops - there is no reason similar style businesses shouldnt be happening in Australia.....that is unless you want to finance them from an Australian bank!
So there you have it for some afternoon thoughts - agriculture isn't all about big hats and sunsets, theres some serious decisions which will shape our future being discussed at a lot of kitchen tables!!
Oh year.......and then theres carbon farming but thats a whole different story!!!
Summer Farm Planning
This year we will be cropping another 3000 acres on the Liverpool Plains in between Gunnedah and Tamworth - its a fantastic opportunity to spread the cashflow out a bit and do some summer cropping of sorghum sunflowers and maybe even some cotton.
I see on the weather forecast there was 42mm of rain there over the last couple of days and the agronomist tells me theres a full profile of moisture which means perhaps the possibility of being a bit cheeky and double cropping all the black soil country with sorghum and then back into wheat.
Playing around with some district averages for 6.7t/ha of sorghum and a lock in price of $220/t Im pretty keen to get as much country in as possible - on a back of the envelope budget 800ha would give a gross income of almost $1.2 million, take away costs etc etc there should still be enough for couple of beers and a steak sandwich. It just makes sense to 'farm moisture' through summer and turn the saved moisture into cashflow instead of letting it sit for a wheat crop next year....maybe with enough rain we can get the sorghum off and get a wheat crop in - move to the coast for winter and back a winner for a change!!
Ive also been looking at whats happening with budgets for our new New Zealand lamb finishing enterprise. Ive looked at the NZ experience as a risk management tool, and also a pressure relief valve for what we are banking on in Australia if the proverbial hits the fan!
We've got access to around 15,000 acres of lucerne country in South Canterbury/North Otago and the aim is to buy and fatten around 100 - 120,000 lambs over there. The NZ lamb market is a bit different to the Aussie market in that the prices are very easy to track year in year out - so this takes a fair bit of work out of looking at overpriced and underpriced lambs, its a bit more a case of buying as many 28-32 kg liveweight lambs and get them through to 43-46 kg liveweight as quickly as possible. Buying in mid autumn and turning off late winter is a fantastic trade with this year showing around $65/lamb and then taking off cost of carry etc still ends up around $33 per lamb net cash.
The most intruiging thing in NZ is its possible to finance a finishing/backgrounding animal by just using the animal itself as collateral - unheard of in Australia I would have thought!! Anyway, for thinking right outside of the square and not being afraid to jump on a plane to see how things are going can certainly mean a lot less stress (I hope!) on things in Australia.
Isnt it stupid though - we live and farm in Australia and in order to safeguard things here we end up looking outside of the nation to income opportunities. I know Ive written it before but I really do wonder where things are heading for this country. I dont expect a handout, I dont expect subsidies but it would be handy for a few changes to make the game a bit less problematic!
Dorper ewe prices seem to have come off a bit the last month or so which will make it handy for stocking the new farm, we sold a load of cast for age ewes the other week and it might have been good timing before the price slide. Im thinking sheep prices will stay up for a while yet but they were a bit overheated for the first half of 2011.
Anyway, theres a few random thoughts with whats happening in my little corner of the world at the moment, hope everyone else got a good splash of rain this week
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