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Farmanco Facts Jan/Feb 2021

Eric Nankivell welcomes all to 2021 and introduces Farmanco Facts in his Editorial. Eric is a Management Consultant based at Albury, NSW with Tim Haines, Management Consultant and Adrian Clancy, Grain Marketer.

An excerpt from the editorial reads:

There is much hope and expectation that 2021 will be better than 2020, but as farmers we know that hope and expectation will not be the only reasons for a good farming year.
Our businesses work around planning and preparation so that we can be on-time and then be prepared to adjust our programs to suit the season.
To this end, more than anything it is the mindset we have that is important, so I'll leave you to ponder a range of thoughts and ideas to get you in the right space for your planning in 2021. Don't leave anything to hope and expectation alone! You make your own luck!
The Five 'P's'. Planning and Preparation Prevents P**s Poor Performance.

Articles this month include:

Around the Traps

North, Central & Southern Wheatbelt of WA

(Excerpt) Sheep enterprises for the third year in a row have had higher feeds costs with the dreaded false break, with clover germinating in February and dying off before the winter rain arrived. The fall in wool prices impacted on profitability, but higher sheep prices have buffered the results to a degree. North or South, land and lease prices have been a topic of discussion with several lease and land purchases occurring in the lead up to harvest. Good properties are changing hands at very high prices and to generate a reasonable return the purchaser needs to be performing above the average business.

Like property purchases, leases are also being transacted at very high prices. It is still important to do your research. Lease and land purchases have transacted at high prices, but often when the information is checked, the rumoured price and sometimes the published price is higher than reality. Maybe some of the exuberance around higher land prices if due to lower interest rates. Interest rates have continued to fall during 2020. Profitable businesses with strong balance sheets are attracting very low interest rates.

Esperance Zone

(Excerpt) Despite being a difficult season in the Esperance Port zone this year, the result for many farmers has been pretty good. The port zone itself is not far off producing a record tonnage which was largely driven by the good results on the sandplain. The Northern Mallee struggles as it never had enough rainfall to get the season going. At no time were conditions easy in 2020. There was limited subsoil moisture leading up to seeding and then seeing conditions were dry. This was followed up by some significant wind events which made establishment almost impossible and erosion took out quite a few crops, especially on deep ripped country.

Riverina & Central West, NSW

(Excerpt) Obviously, the combination of large machinery, tax depreciation and carried forward losses will soften that taxation pressure this year for most. This might come home to roost this year and next year for the Government as taxable income will be slashed but make no mistake, we will pay for it in the longer term! We will need to use other strategies to manage taxation liabilities into the future. Hopefully we can avoid the old 'leveller' that often comes our way seasonally to manage this for us!

20 Years in Consulting

(David Ward - Management Consultant)

(Excerpt) Laconik was founded by Wayne Pluske and Darren Hughes in 2017 with the aim of making more money for growers from fertilisers. They were frustrated at the slow rate of improvement in fertiliser decision making and a lack of accountability of those providing fertiliser recommendations. Without measurement of fertiliser responsiveness, there is little more than gut feeling about fertiliser profitability, and therefore little reason to change or to use the variable rate capability of modern machines. In late 2020 the Farmanco agronomy team met with Laconik to discuss making more money from your fertiliser investments.

Getting serious about making more money from fertilisers Laurence Carslake (Agronomist / Management Consultant)

2020 / 21 WA Harvest Review Mae Connelly, Grain Marketer

  • The total WA 20/21 crop size is estimated at 15.96 million tonnes (mmt), up over 40% compared to last year.

  • ASW1 was the biggest wheat grade by volume delivered in WA, followed by APW1.

  • Scepter remains the dominant wheat variety, making up 68% of deliveries.

  • Larger overall barley crop mitigated the lower malt % still meant adequate volume to meet domestic demand.

  • GM canola continues to make up approximately 35% of total canola deliveries.

WA and NSW/VIC Wool & Livestock Market Reports

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