A friend of mine grew up on a farm. After a career in the corporate world he is thinking of returning to the land by buying a property and running some cattle. Being very aware of the necessity for commercial viability he asked what I thought made a profitable farmer.
There is much irony in this question. I was not brought up on a farm, nor do I have any farming experience. I even fail at growing veggies in the garden as the possums eat any green things the wallabies leave behind.
But I do think about farming a lot. Not about the skills in fixing the tractor or knowing when to plough but with a bias for the big picture that determines a doubling of production from a dwindling stock of viable farmland.
Answering the question of how to be profitable, here are the first six things that came into my head…
- You really have to know what you are doing as the Pareto principle applies — 20% of farms deliver 80% of production
- Choose your property wisely — it needs to be either productive or restorable
- Decide if you will broker your own deals with retailers or go with aggregators
- Don’t always listen to your neighbours because what great-granddad did might not work today [arguably it didn’t back then] but at the same time you will need their help
- Climate change effects will be real but manageable given that the Australian climate is already makes agriculture a challenge
- Diversify, diversify, diversify
In other words, farming is a business just like any other. You need to know how to do it well to be profitable and that means efficiently matching skills to the available resources.
And it takes guts to farm. Thankfully there are many brave souls with such courage, otherwise most of us would starve or work in vain to feed the possums.
Post comments to suggest things to add [or remove] from the list.