The Farmer's Club

The “Club Notes” for Thursday, the 18th of July, 2024.

By Dwain Duxson

The cost to turn the lights on

There's an old saying you would have heard: the bigger they are, the harder they fall. That's not necessarily true, and especially in Ag. But what is difficult in Ag right now is servicing a big asset. Especially if you went to the well in this high Land prices environment. There's a little story someone told me ten years back about Club Mulwala (in Mulwala, NSW). This club was built back when pokies were banned in Vic, and they used to take busloads of punters from all points of Victoria across the NSW border, and these venues were pumping. Club Mulwala was expanded on the back of this boom, and it's a very vast building. I can't remember the figure, but it was some astronomical amount it used to cost them just to get the place revved up for the day. Just to turn the lights on. It is a big asset to service. Back to the Farm, many Farmers with some debt and rising fixed costs would know what we are talking about here. The cost of interest, rates, insurance, Electricity, vehicle regos, Stamp duty, associated taxes, etc., have all risen exponentially, and this means big numbers on a big Farm (and smaller Farm, too). But for the bigger ones, the advantage of economies of scale might not be as powerful as it once was. What are your thoughts on this? Reply to[email protected]

The Farmers Club - Non-Commodity Thinking

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