The Farmers Club

The “Club Notes” for Wednesday, the 20th of March, 2024.

By Dwain Duxson

Going along alright

I put a snippet from an article yesterday outlining that in Australian Agriculture, for those who own the Farm, the average equity rate is 90 per cent. And another figure stated was that half of the Farming population doesn't have any Farming debt. To me, that means that Australian Agriculture as a whole is going alright. To get ourselves into a position like that is pretty admirable. It means that if tougher times do prevail, then we are heading into them in pretty good shape, and the chance of survival is high. Some of you reading this might have less than 90 per cent equity in the place, and you might have debt, but that's no reason to beat yourself up. Many who have expanded their operations have happily used debt to do so, and it's been a smart business decision with the rise in Land prices. Do you use debt in your Farm business, or have you no need to? Reply to [email protected]

The winds of change

Without volatility, we don't get opportunity. That statement is not always true, but in Agriculture, it can be the case. The ups and down in the Sheep and Cattle market are why traders exist. Many Farmers who trade Stock for a living are always riding the market. What they are good at doing is adding weight to animals; that is the thing they do well. The ups and downs of the market are where they can add cream to the cake. Of course, that doesn't go with you all of the time, and sometimes you have to take a loss to get yourself into the next winning trade. As the world's worst share market trader, I know that. And we all know that in Ag, one person's gain is more often than not another person's pain. That's how it works. Those that understand that enbrace the cyclical changes that Agriculture serves up. As a young person in Ag, you may not have experienced the whole cycle, but at some point, you will, and things will go against you. All I can say is embrace it, and seek out others that have been through many cycles for any advice. What are some of the cyclical things you have experienced in Ag? Reply to [email protected]

Shopping around for an outcome

We are about to commit to building a new house on our little Farm in Central Victoria. We have been at it for 3 years and have had a couple of over-the-top quotes, and we have had to refine things. We currently live in a small 2 bedroom, 1 Bathroom house that we love. It's only the 2 of us as the kids have grown up and moved on, and we love living small. So the one we build won't be big for the reason above. But during the quoting process, we have had numbers of up to $100k to put the power on or go off the grid with solar and batteries. The glaringly obvious thing that sticks out is that there is a power pole 50 metres from where we are building the house. Everyone has said that there is no way they would let us put a transformer on that. So, our young builder, who has a bit of enterprise about him, said he was going to find out. Low and behold, Powercor has come back and said yes and the cost to install with be $23k. So our lesson from that is don't always listen to others and seek out solutions that look the most obvious. And before you dismiss something because, the majority say it can't be done, at the very least, explore that option. Have you had a case where the so-called impossible has been achieved? 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:

• “A big problem with advocacy is that it can mean a bit toooo much “cuddling up” between advocates and ‘elites’ and the more basic (but important!) issues don’t get the attention needed. There is WAY TOO MUCH Gov, big business and elites getting in our faces more recently - A Farmers reply to our Note on Farmers representing us through advocacy.

• “I love your newsletter daily. I'm a retired Farmer and stud Cattle breeder. However, sadly my pension will not permit the cost, but I will survive. I can imagine the time you put in to it all. Keep up the good work”. - In reply to our Note that we are going to turn this newsletter into a small monthly subscription. I am comfortable adding a subscription to this because it requires a hell of alot of work and time to put together. But I am sad that people like this will be missing out.

• “My strategy. When Land comes up next door, we buy it. It’s worked so far”. - A pretty good strategy. Most that have done the same haven’t regretted it, and some that haven’t, have…..

• “The road East of Henty is narrow bitumen one. It has a lot of Trucks from a Truck business up the road, a school bus and many cars daily. With oncoming Trucks, we have to come to a complete stop and pull over onto the dirt, which is often very wet and slippery after rain. Oncoming cars have to pull off the bitumen with two wheels every time. Very dangerous. Council engineers tell me there are no funds available to widen this road”. - This is typical of where we are at with our country roads. Many are dangerous. Make sure you drive to the conditions.

• “Hi Dwain, After last year's Urea shortage, I’m building a shed that will hold over 300 t of Urea and MAP. That way, I can always keep a year's supply of fertiliser and chemicals on hand. I also increased my Fuel storage so I can keep six months of hand.” - An enterprising Farmer who is taking some of the supply risks out of his business by purchasing forward.

• “G'day Dwain. We have decided to keep going on a small 500-acre Farm. I was talking to a 95-year-old Farmer who is still Farming. Came away from our discussion that when you stop, you drop.” - In reply to our Note on Farmers retiring. These Farmers aren’t…..

• “Hi Dwain, I would agree with your consultant in regard to the connection with suppliers; Im surprised that anyone would pay a consultant to tell them this. If you want to have a good relationship with the businesses that keep you going on the Farm, always pay your bills and don’t shop around all the time, you will get found out and treated accordingly. The same goes for the engineers and mechanics, auto electricians and so on. A bit of preventative maintenance and a good working relationship with these people will reap no end of rewards when the shit hits the fan during Sowing/Harvest etc”. - I reckon that’s bloody good advice. It was in reply to Rob Dawe’s advice to have more than 1 Ag Retailer but no more than 3.

• Thanks for your reply, Dwain. I’ll consider it, I really like reading it, and it’s super interesting. I might cancel Netflix 😜”. - That’s it. Get rid of Netflix and subscribe to The Farmers Club.

• “G’day Dwain, the real risk is that the Farm has been their life, so when then Farm finishes, so do they”. - In reply to our Note on Farmers retiring.

• “I often say to my wife a day crutching is better than a day in the office”. - Most Farmers I know try an avoid the office.

End of message.

Dwain Duxson
0427 011 900

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