Farmanco Facts - October 2021

Greg Easton introduces the October Farmanco Facts and (in part) says,

The strengthening of farm balance sheets should make businesses more resilient and resilient businesses are better positioned to survive black swan events.

This month Greg writes about Fertiliser Prices 2022, Mae about Australian Grains in 2030, and David Ward on the State of Agricultural Businesses. Blake pens Part 2 of PA: Data Management.


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Key Points:

Fertiliser Prices 2022

(Greg Easton, Management Consultant)

  • Fertiliser prices are at record highs

  • Look to ensure you have supply

  • 2022 is not the year to build fertiliser banks

  • If you are locking in higher priced fertiliser, look to lock in higher grain prices.

“With higher fertiliser prices comes the question, “Should I lock in the price now or just nominate tonnes and lock in the price later?”

***


Australian Grains in 2030

(Mae Connelly, Grain Marketing Consultant)

  • By 2030, Australian grain production is expected to grow by about 10%

  • Domestic demand for grain is expected to have increased by 3 million tonnes by 2030, but this will be concentrated in the eastern states

  • The export states of WA and SA will have to find international demand for their increase in production, and this is expected to come from Southeast Asia and the Middle East

  • Canola is not likely to see the same strong growth in demand going forward to 2030, compared to what occurred in the last decade.

“This article looks at some predictions for the Australian grains industry in 2030.”

***


The state of Agricultural businesses: Part 1

(David Ward, Management Consultant)

  • For frost affected areas, 2021 results are likely to be a ‘small gain’ or ‘slight setback

  • Profit Series data shows that farm businesses should remain in very good financial positions

  • Average farm incomes have increased from $211/ha to $822/ha over the last 24 years

  • Total equity increased from $2.7m in 1997 to $7m in 2016. As at Feb 2021, now $15m

  • Many businesses made decisions to invest in machinery in 2021

  • These were based on capacity to replace, not on this season’s potential or taxation benefits

  • Business strategies for 2022 will continue to include managing costs without limiting production potential, replacing machinery, improving soil health, or undertaking expansion opportunities.

“In 2020, average farm income was $822/ha, with a ROAM of 6.62% produced from Net Equity of $14,980,000.”

***


PA: Data Management (Part 2)

(Blake O’Meagher, PA Specialist)

  • This article continues our discussion about the importance of integrating data management into your business [Farmanco Facts July 2021]

  • Benchmarking paddock productivity and variability over a single season or multiple seasons is possible

  • Data can be utilised for input decision making, providing a clear pathway into both variable rate and non-variable rate applications.

“In part 1 of our ‘PA — Data Management’ article in Farmanco Facts July 2021, we looked at the importance of data management and how reliable data can be used to build effective mapping structures such as boundaries, to help make decisions for variable rate applications.”

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Farmanco Marketing Pty Ltd is a Corporate Authorised Representative No. 341189 of Primary Financial Services Pty Ltd (AFSL No. 338360). Don McTaggart (No. 298483), Ryan Duane (No. 407412), Mae Connelly (No. 315016) and Adrian Clancy (001283272) are Authorised Representatives of Primary Financial Services Pty Ltd (AFSL No. 338360). Primary Financial Services Pty Ltd is restricted to providing financial services to wholesale clients only as defined under the Corporations Act 2001.


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