The Farmers Club

No 162 - Friday's Club Notes

Dwain Duxson
March 22, 2024

The “Club Notes” for Friday, the 22nd of March, 2024.

By Dwain Duxson

The evil office

Most Farmers hate the office; hate is a pretty strong word, so perhaps I will start the sentence again. Most Farmers actively avoid the office. And doing the Farm books, that's another thing again. I had someone reply last night asking what Farm books program do people use. It stemmed from a post on Linkedin we put up yesterday about how the Ag software company Agrimaster raised $55,000 for a Ronald McDonald housing unit for a number of years in Perth. This is an admiral thing to do, so hearty congratulations to them. Anyway, the replier has been using Agrimaster for the Farm book for years and loves it. I used to use Agrimaster back in the day, and I thought it was pretty good until I lost 12 months worth of data and had to put it all in again. It was my own fault, and it was in the days before we stored things in the cloud. I remember they used to send us CDs in the mail so we could update the program. I was a Farmer who quite enjoyed doing the books and working out our financial position each month. Two Questions. What Accounting software do you use on the Farm? And who does the books for your Farm and do they enjoy it? Reply to [email protected]

Self-managed or not

We wrote about Farmers paying themselves a wage the other day and how a few do it, but many just rely on drawings and are happy to do so. Most who pay wages to themselves and Farm staff would be paying super. This is good because, at the end of the day, you will need something to retire on. We also wrote about how Farmers do retirement, and some aren't really keen on that, too. But we all need to have an income coming in towards the end of the life cycle, and during that period, we are more likely to be working less, so what we get paid can't really be pinned to output. We need to be getting paid for what we have achieved earlier in life. That's where the super thing comes in. Super can come in many forms, but the government, in their wisdom, provide tax and other incentives for you to have a super fund. So, it makes sense to drop any surplus funds into that. When I was on the Farm, I never paid myself any super, and when we started the Farm Tender business, I was forgoing super for myself, so I am a late starter on this super thing myself. We have recently structured our personal finances up, so it includes a super account and we are on the way. Where are you at with your super fund? Reply to [email protected]

The 1000hp Tractor

I have been noticing a few Farmers on Twitter/X who are talking more about automated Machinery. There is a bit of a feed below in the article and images section. But it got me thinking: if I were a betting man, what would things look like in 20 years' time? Fully automated? No automation? A combination of both? That will be 2044, and hopefully, I will still be writing this little newsletter, and if I am, we will have covered this subject many times because it's an interesting one. We are still on the bigger and better Machinery trajectory with the X9 Headers, and you can buy the latest and greatest John Deere Tractor now for something like $1.6 million. How long before we get to a 1000hp Tractor? But we have reached a point where Machinery prices are getting out of the range of your average punter. Some have started a policy of not buying any more new stuff and will only entertain used Gear going forward. And for the record, my bet will be a combination of both, I'm not sure how that will look, but I think from this point on, some things will change a little in the Machinery space. You guys are dealing with Machinery every day. What do you think the Farm Machinery space will look like in 20 years' time? 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:

“Hi Duxy. Price is what you pay....value is what you get. I'm guessing those not keen to take up the $44 offer place a different value on it, especially on the time taken to consume the huge volumes of information that lands into our day be it voluntarily or involuntarily. Your newsletter provides concise and more varied perspectives, often more heartfelt, to what information I was consuming before you started this project. I get threads I can follow if I choose "thought seeds" and a filter to a wider range of information than I could ever hope to cover and in much less time (although I still find it a bit lengthy some days), I'll be signing up”. - A Farmer who sees the value in what we do. Thank you.
“Hi Dwain, Re Urea - As you said, it would not be any advantage price wise, but to cover risks of supply is a good move. I may be naïve but - The Farming community should invest in a natural gas field/mine. Advantages; Harvest the gas which wouldn’t be then at world parity prices (although one should account for opportunity returns), big advantage. No shipping costs – big advantage (environmentally as well). Low employment requirements so not disadvantaged there compared to China. Tied to world urea prices; as is oil – big advantage. Disadvantages (compared eg to China, as a competitor). Higher environmental conditions (better for the planet, though). - Higher costs and time to establish with the green and red tape”. - In reply to our Farm Tender Daily story on becoming self-sufficient in Urea within 5 Years. They have outlined some of the advantages and disadvantages. Read the story here.
“Middle East countries make sure their gas (gas is used in Urea production) and oil products are dirt cheap in their countries. If the real benefit of the Gold, which was ripped out of Victoria in the 1860, had stayed here, Melbourne would be bigger than New York”. - Another replying to our Urea story. An interesting quote about Melbourne and how we possibly never got all the value of the gold rush.
“The decline in active management and maintenance due to funding and the so-called importance of “the environment “on the roadsides has meant that no work is carried out on the shoulders and table drains. Now, there are trees and vegetation growing right on the shoulders, and water can’t run off. Notice that most potholes are on the edge of the shoulder”. - A Farmer replying to a Note on how bad the road situation has become in Rural Australia.
“On Farm successions. I think the business of running a Farm in a family sense perhaps keeping the assets ownership away from the business operations. eg: All the stake holders have a share that can be exercised in a time frame say 10/ 15 years. The Farm operation pays a rent/lease for the use of the assets. Any family still have access to their childhood/emotional home while the place stays together”. - In reply to our Note on succession and this person's opinion on how things should be structured.
“Gday Dwain. Yep thanks for the response, yes stronger and wiser but still bitter and twisted!! To coin a phrase”. - A Farmer who went through a messy succession with their parents, brothers and sisters years ago and who has now taken the lessons from that and is making a much better fist of it with his own children. Well done.
“I’m not sure where it’s up to, but they were supposed to be turning off 3G in April, which is still the only reliable service that we have (when you can get it)”. - A Farmer giving Telstra a rev for treating us with disdain in the bush. I think they have delayed the 3G turn-off as they have no way of replacing it. Bring on Starlinks phone towers in the sky.
“New phones are working against us as well (can’t set them to lock onto 3G, and apparently even older phones have just been updated so you don’t have that function). I have a booster in my Ute, and it’s as good as useless now, with my phone trying to hold onto a 4G signal before last resort going to the 3G booster, or if I set the booster to 4G it drops the call every time it jumps to a new tower”. - The same Farmers as above explaining how the more modern systems don’t talk to each other and the frustration in that.
“The current era is seeing more young mechanics starting their own mobile business as they have often become disillusioned with working for the Machinery Dealerships. As soon as their bill hits the computer, we pay it, as we all know how hard it is to start your own business. These fellas are always there as soon as we need them, no matter what time of day. These same young fellas often say after a period of time that they are not confident they will be able to stay in business. We ask Why? The answer is that they find it so hard to get people to pay their bills. Our answer is always don’t do anymore work for the bad payers. Pick your clients. Service them well and build your business with good people around you, not those who are just using you. They often seem to find it hard to take that step as they do not want to offend anyone. We need to encourage these young tradies to back themselves and the terrific service they have to offer. They are a vital cog in many business”. - A Farmer outlining her relationship with these young independent people who are providing a great service to Farmers and how we need to treat them. Great reply.
“A mentor of mine said to me from day one as his employee when I was working as an Ag Retailer in a former life, “it’s all about relationships, create them, make them, maintain them and value them”. Guess what, as a Farmer these days, the same rules apply”. - One Farmer who hold the value of relationships at the top of the tree. Wise words.
“I was surprised at the level of Farm equity quoted in your report earlier today (90%) and probably more so by the number of entities that have no debt whatsoever. There has been a huge amount of market force equity achieved in the last 5 years and I’m comfortable saying I have millions of reasons to go to work every day. I also believe that sustainable debt is very healthy and necessary to continue growing. I’d consider no debt unhealthy, stagnant, underperforming and probably in retirement mode”. - One Farmer who is comfortable using debt to grow their Farming business. Many Farmers are comfortable doing it this way.
“I love your little story about getting power on at your place. What you say there is very true. I always love it when people say that stuff can’t be done, I’m a bit of a stubborn bastard at times so I then make it a small mission to achieve what they say can’t be done. Don’t get me wrong, I don’t always achieve it, but surprisingly, there are more wins than losses”. - I think at the end of the day, if you are having more wins than losses, you will have a pretty good Farming life. A bit of stubbornness helps, too. Great reply.
“Everywhere, city or country has people who will take advantage of you if you let them. We have 5 sparkies working in our shire. 3 charge like wounded bulls, the other 2 are booked out for months. So, like everything, buyer beware”. - In reply to our note about seeking out options for things you don’t know much about.
“Very well said, and thank you. This is my wife and my passion. That's why we stick to the rural areas when we travel”. - In reply to our note about all the people travelling throughout Country Australia helping to prop up our Rural economies.
“So my super was to put money back into the Farm and to create another side business that I controlled, or in this case, my daughter and I control, and that is not connected to the Farm so that when I passed on, there would be no bum fight amongst my kids about their inheritance. How many times have we seen good farming enterprises collapse because of poor succession planning and/or greedy kids?” - A Farmer who was telling me how he set up a successful side business and how it played a part in his succession process.
“Dwain, Keep going with your cartoons. I get a laugh out of them, and we could all use a giggle now and then”. - Yes agree, we are in a serious industry, and a few laughs occasionally can do wonders.
“Hi Dwain , reading the newsletter tonight. I saw the post re Agrimaster. Been using this software package for our Farm accounting for more years than I can remember . I am wondering if there is anything better? I not sure if I would or could change even if there was something better. Wonder what your readers think?” - It’s a good question. We wrote a story about it above.