The Farmers Club Newsletter

The weekends thinking and trends for the 15th of September 2023

By Dwain Duxson

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Dealership monopoly concerns

There has been some interesting feedback on the Farm Tender article about the International takeover of our Machinery Dealership. Read the article here. One Farmer said an International owned Dealership tried to charge him $450 for a specific Tyre, which was $150 at Tyrepower. Another is worried about the monopoly it's creating. Another said their local Dealership had become "sloppy" since it was taken over. Another asked why these Australian businesses aren't being bought by Australian-owned companies. They are good question.

Why are big Aussie Agribusiness hard to sell?

Continuing on from the Dealership piece above. Is there a point where Aussies Agribusiness become too big to sell domestically? By that I mean, there are only a limited number of businesses that have the capacity to spend hundreds of millions on an Agribusiness. Delta Ag is on the market for something like $650 million but hasn't had any suitors yet. I know of two other businesses for sale in the 9-figure range that are having trouble selling. This is why we are seeing our Dealerships getting swallowed up by International players because they can afford it. We have also observed that those outside Ag are reluctant to invest in Ag because of the perceived uncertainty.

The domestic Hay market

The domestic Hay market is fascinating at the moment. As the first Bales start hitting the ground for the new Hay season there are so many different scenarios that might play out. The fine weather we are experiencing in the main Hay Growing areas of South Eastern Australia means we might finally get some quality Hay again after 3 years of substandard stuff. And it will be interesting to see where the demand is at, given how depressed Livestock prices are right now. It will also be interesting to see how Crops fare with this little dry period we are currently having. As mentioned, it will be fascinating watching it all play out. See Farm Tender's latest Hay Report here.

Good quote that…

This is a quote from Seth Godin in his daily blog, Seth's Blog. "If you need to be proven right, learning is a challenge. If you're eager to be proven wrong, learning is delightful."

End of message.

Dwain Duxson

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