Farmer Focus: Getting harder to turn a profit Down Under

It’s that time of year when the harvest is over and we all head for the coast.

The sun is shining, the beach is hot, the water’s cool and the beer is cold. There’s probably not a better place to be.

Right now I’m sitting in the beer garden overlooking the beach waiting for 10 of my farming mates and their families to come for a few beers and review the year – an annual event we all look forward to.

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Looking back, it’s been another tough year farming in Western Australia. Another year with a failing spring in the north, too much rain in the south and one of the most widespread hail events smashing crops at harvest most can remember. Yet we’ve come in with a 13.5m tonne harvest – well above expectation and well above average.

It’s getting harder each year to turn a profit farming the land yet agribusiness seems to be booming. The state’s largest farmer has his properties on the market – 68,000ha for AUS$60m (£32.5m) if anyone is interested. The interesting thing is that he’s keeping the machinery sales and service business.

If my memory from school serves me right it was the men selling the shovels and pans that made the money in the gold rush, not the miners – so where does that leave farming?

My feeling is that more and more farmers are going to diversify into off-farm businesses, whether this is in servicing agriculture or in unrelated businesses.

The business of farming will be the capital business that funds the expansion, with the off-farm business providing the cash, much like owning investment property while a wage earner.

This system could provide many benefits to farming. One is that it can start to say no, without the reliance to produce food regardless of price, turning down production to put upward pressure on price as chemical and oil companies do. As a collective, farming is by far the biggest business in the world.

I’ll float the idea tonight as part of our review. If I can remember tomorrow I’ll let you know the result.

Rob Warburton

Rob Warburton farms 3,000ha with his wife Jen and two daughters in Kojonup, south of Perth, in Western Australia. Cropping includes wheat, barley and oilseed rape. Wildflower seed is grown for retail. Merino sheep are reared for wool and meat.

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