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Farmanco Facts - May 2023

This month in Farmanco Facts, Grain Marketing gives an update on the Ag Impact of the Russian Invasion of Ukraine, we’ve a couple of shorter pieces on The Aboriginal Cultural Heritage Act (ACH), and tips on keeping safe from Cyber Attacks. Ben Curtis addresses what higher prices mean in regard to Machinery Capital Costs, while Wayne Birch (Agronomy) writes about Nitrogen Use Efficiency (NUE) and slow release in fertilisers.


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Key point review:


Update on Ag Impact of Russian Invasion of Ukraine

Mae Connelly (Grain Marketing Consultant)

  • The Russian invasion of Ukraine resulted in Ukraine’s agricultural production reducing significantly.

  • The obvious visible effects are those that missiles and bombs have on land and infrastructure.

  • There are also many indirect results of war that threaten Ukrainian agricultural production.

  • It may be decades (even centuries) until Ukraine’s agricultural production returns to full capacity.

  • Given Ukraine is one of the largest exporters of agricultural commodities, any long-term loss in production will likely provide support to agricultural commodity prices.

This article discusses the less visible damage and longer-term implications of the Russian invasion of Ukraine.

 

The Aboriginal Cultural Heritage Act & your Farm Business

Ben Curtis (Farm Management Consultant)

  • The Aboriginal Cultural Heritage Act 2021 (ACH Act) will be in place by 1 July 2023.

  • Regulations and guidelines for the ACH Act are still to be developed and released by the Government.

  • The ACH Act will impact almost all farmers.

  • Farm activities falling under this Act that will require approval include delving, scarifying, ripping, drainage, fencing, construction of animal yards, and earthmoving.

The ACH Act will encompass pastoral and freehold land. It precludes land with lot sizes smaller than 1100m².

 

Stay Safe from Cyber Attacks

  • Call and check on bank account details for any invoices from new payees. Always find the phone number independently of the paperwork you’re checking on, i.e., search engine or phone book.

  • If the bank account details have changed for an existing payee, call them to confirm the change is correct.

  • Keep an eye out for anything unusual, misspellings or typos that could point to a third party altering details.

  • If you have any concerns at all about your computer safety, call an IT expert to assess your situation and ensure that your computer is secure.

The number one way that hackers gain access to systems is by cracking the password. Don’t become complacent.

 

Machinery Capital Costs — what do higher prices mean?

Ben Curtis (Farm Management Consultant)

  • New farm machinery value has gone up by approximately 25% in 18 months.

  • Secondhand machinery has either held its value or also risen.

  • Depreciation of existing farm machinery has been minimal.

  • The increase in machine value will start to flow through as an increased cost once supply returns, which makes for increased purchase and depreciation cost.

  • Cash payments for machinery have risen, either because good seasons mean there are cash reserves, or chattel mortgage interest rates are higher than overdraft rates.

In 2021, this machinery capital expenditure stretched from $36 to $253 per cropped hectare across our client base.

 

Nitrogen Use Efficiency (NUE) & Slow-Release in Fertilisers

Wayne Birch (Agronomist)

  • There is global pressure to reduce the impact of agriculture on the environment. GHG emissions from nitrogen fertilisers is the current focus.

  • Slow-release fertilisers are topical and have the potential to benefit the agricultural landscape in terms of better nitrogen use efficiency (NUE).

  • Improved NUE leads to the option of applying less to achieve the same or better, consequently reducing Scope 1 emissions.

  • Slow-release fertilisers can help solve the problem of paddocks with poor trafficability. Lower N losses will allow growers to apply more N upfront with better utilisation and the potential to increase the yield of poorer performing paddocks.

Despite the contentious nature of the issue, it is often the case that when faced with adversity, we are forced to give real consideration to alternatives that will improve efficiency. In this case, specifically nitrogen use efficiency (NUE).

 


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