The Farmers Club

No 165 - Tuesday's Club Notes

Dwain Duxson
March 26, 2024

The “Club Notes” for Tuesday, the 26th of March, 2024.

By Dwain Duxson

The Farmer Engineer

Farmers are an innovative bunch, and we say it pretty flippantly, but when you stop and think a while, the examples are everywhere. I am singling in on Equipment Manufacturing here; how many Farmers have started tinkering in the Farm workshop as a bit of a sideline only to turn that passion into a business that can sometimes overtake the Farm? The workshop for many Farmers is what the Golf course is to others. The reason why Farmers make good Engineers is because they like solving problems. We are natural problem solvers. Building something from scratch, knowing it's going to make a particular Farming operation better, is what drives these people. The best Ag Tech businesses in the country were all started by Farmers, and I could name a dozen Aussie-made Farm Equipment brands that Farmers started. There would be heaps more. Do you love getting into the workshop, and what types of things do you like to build? Reply to [email protected]

Stress in doses

I'm no doctor, but I think too much stress can cause more problems with our health than we think. Farming is one of those industries that is driven by confidence. Rabobank even does a quarterly survey and report on confidence. It goes up and down and is related to the many different things we come up against in Ag. Stress is an individual thing; some people can get stressed easily, and it builds from there; some don't worry too much, and others actually need a bit of stress in their Farming life to get the best out of themselves. I remember one high-performing Farmer telling me once how he always liked the pressure of debt in his business; it was motivation to him. He had a couple of million reasons to get up in the morning and do his absolute best. Too much stress can mess with your health, and if that's you, you need to find a way to lower it or seek out some help. How would you rate your stress levels? Reply to [email protected]

So it sinks in

We write regularly about how, as we get older, we specialise more and do the things we want to do and drop off the things we don't want to do. I guess it's part of the privilege of getting older and is a legacy of what we have achieved in the past. For me, that has been no different, and I get the opportunity to focus on the things I enjoy doing within the business. In our Farm Tender business, we do what we call Daily Numbers. There are 20 different KPIs we gather after each day and report them to our staff the next morning. It's a performance thing where everyone involved in the business knows what is going on and how they are performing; we don't hide anything. I make sure I am the one who puts those numbers together each morning. Why? I don't know about you, but if I do something, then you are invested in it, and it sinks into your brain. If I was just looking at those numbers in a spreadsheet, you can miss things, but by being the one that puts them in the spreadsheet, then the numbers really sink in. Daily numbers on a Farm would be overkill, but some Weekly numbers would work I recon. Are there jobs you do in your Farm business that you feel you need to do and not outsource? Reply to [email protected]

Your replies

Below are snippets from some of the replies you sent in. All quotes will remain nameless. See a few current ones below:

“We should be selling Lamb like a bottle of wine, describing the taste from different regions, describing the attributes of different genetics and the expected eating outcomes”. - I saw this comment from one of our Farmers Club members on social media and thought it would be interesting to get people thinking.
“If we want to get excitement in the Sheep game we really need to throw the rule book away and rethink the whole industry and our approach to fulfilling the desires of an increasingly discerning customer base”. - Same as above. Interesting comment that should get those in the industry thinking. Easier said than but.
“Hi Dwain, Just saw your article on Cost of Production. A word for clarity. Cost of Production is different to the operating costs of the business. They are two different figures. - It’s a reply worth reading. You can check it out here. Thaks John.
“Sent 30 to a greatly advertised Weaner Sale at Yass last week, the result was about 20% less than sending to a normal weekly sale. Normal sale yarding is about 600, this one 2400. I think smaller runs get lost or left to the end and the results bear that out. Won’t be doing that again despite what the Agent promised”. - These are some of the unknowns we face in Ag. We do the same thing next time, and we get a different result.
“Rob Fraser's comment's are simply pathetic, he obviously thinks that producers should always take a back seat when marketing their Livestock and the best pricing opportunities will always find him. He obviously takes a very lazy approach to commodity marketing, or has a shit agent, or has a very poor understanding of how the supply chain works, or all of the above. Commentary like this is not helpful for Producers, Forward Contracts are a very useful marketing tool, in so far as a helping with price risk management within the business. If people like Rob want to criticise the Processors for giving Producers pricing opportunities, then they should educate themselves properly before throwing ill-informed stones. Otherwise, the Processors may well remove this opportunity from us. Lazy commentary”. - Someone who doesn’t agree with Rob that Forward Contracts are hurting the Lamb market.
“I think forward contacts for both Lamb and Cropping both disadvantage the Farmers as a whole over time”. - A Farmer who is thinking only the same lines as Rob about Forward Contracts.
“The article re Heavy vehicle sales: I think there are a few reasons for these sales. Logistics continued to be classified as an essential service during the pandemic so there was no downtime for logistics companies. The $$$ kept turning over while many other businesses were impacted. Secondly, many larger freight companies require their contractors to have vehicles no older than 8 years. If you have a good contract, you want to keep it, so therefore the banks will give you the money to upgrade your fleet. Lastly, there is always the “big Trucker who puffs their chest out (cue Tim the Toolman laugh)” who wants to hit the highways in his big flash K200…..only later to find out the industry is a tough gig with a lot of regulation, pressure and costs! Some pipe dreams are quickly shattered, and Trucks and Trailers are sold”. - In reply to an article that Truck Companies are buying Tracks at record levels. Investing in their vitally important industry. Good comment.
“Hi Dwain, Just reading about the sorry state of the margins at Louis Dreyfus HQ. So the return to equity is down to around 16%? Bet they don't flog off the recently acquired Emerald Grain received network in order to shore up the margins? Why would they do that when they have access to the world's cheapest source of quality dry milling Grain? Talk about corporate control”…. - One Farmer with their tongue firmly planted in cheek but at the same time chipping the corporates.
“We are not regulated, subsidised or given restitution by the Feds, such as in Europe and North America. So therefore the more pricing options we can have throughout the marketing year, the more control we have to increase profitability”. - One Farmer who supports Forward Contracts.
“Competition creates choices/options, so why not create the options? Otherwise, we should just get back to the single desk and the reserve price scheme marketing systems……and we all know how they both ended”. Another Farmer supports Forward contracts as a viable option.
“When I was in the Army, they were called Star Pickets; I bet that's where that name came from! My family always called them Steel Posts”. - In reply to our Note on what alternative names there are for Steel Posts.
“Hi, Dwain. Interesting post regarding community groups and volunteers, as I was only just discussing this the other day with my mum. I am on a couple of community groups and have always enjoyed them as a way to meet people and give back. I have one daughter and only work 3 days, and I am lucky that most of the meetings are in the evenings. In one group I am in, we have plenty of members; however, only a few are really ever putting their hands up to do the work. Lots of people saying ‘im too busy’, which I find difficult because we are all busy in our own way. Mum mentioned that back in the day when less women went back to work, she and the other local mums were the backbone of the community groups. They ensured the success of their local Towns, and they all thoroughly enjoyed it. Today, so many parents go back to work, and perhaps this is why there is no one left to volunteer their time. The weekends and evenings spent with family is more important than volunteering on committees”. - Some thoughts on how our Country Towns have changed over the years.
“Don’t just rely on your Agent’s auctioneering skill in the yards; take a contract when the numbers work for you, punt an online auction via the box, or even sell privately yourself! Plenty of Lambs on an annual basis, just outside weaning, are bought and sold privately between Producers who have built a relationship. I guess what I’m saying is, “Keep spinning the wheel”, be aware of what is happening around you and use the best exit option available at the time because, yes, often as Producers, we lower our eyes and bow to the buyers”. - A Farmer outlining that we have to explore all options in order the get the best price for our Livestock. Good advice.