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Phil Perry

This should really be on the Gripes thread. .

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I would be interested to know a big picture of current rural equity now vs 40-50 yrs ago...

Me too. Banks have always had their claws in farms; if they don't lend to farmers, foreign buyers have an advantage over locals. China is one nation buying up good farmland in Australia and Africa for food security.

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I can sympathise with this line of thought; my uncle sold his sheep farm and for the next 30 years used that money to buy and sell cattle, which he kept on agistment. He would buy when others were selling and sell when others were buying, and bought a beautiful home in Adelaide, but it all came to an end, when he sold a big lot of cattle to a buyer in Tasmania, and the deal went sour. He drove his ute into a tree and that was the end of that.

As a kid, it was my job, in helping people who had lost their properties, to drag the machinery out into the front paddock for the clearing sale, clean the house out etc.My grandfather drove a lot of hard lessons into me that time, and I still remember; "Never borrow money","if you kill a sheep", "sell the sheep skin", "if you go out to check the troughs, look at the condition of the sheep, look at the pasture condition" etc.

 

Well, that right there might be an issue. If you have no debts then the economics of agisting your stock are much different than if you agist your stock and have debts. If someone could make money by agisting stock and not bothering with the hassle of buying land, then they probably would. Selling the Stock for $20 million might have been great, except it might have left her with X million in debt and not enough stock to have a prospect of paying it back. If grazier would have wound up with $20M in cash, that looks like a great plan. (Hard to know why they might have been too dense to think of it) Depending on their debt level, their next move might have been an automatic clearing sale.

 

Turbo, if you took your grandfather's advice, how did you come to own your place in the bush? And why did you leave it to go to the city? You have told us how you managed your stock and dealt with dry years. Can you tell us your economic relationship with the block of land you owned and managed?

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Well, that right there might be an issue. If you have no debts then the economics of agisting your stock are much different than if you agist your stock and have debts. If someone could make money by agisting stock and not bothering with the hassle of buying land, then they probably would. Selling the Stock for $20 million might have been great, except it might have left her with X million in debt and not enough stock to have a prospect of paying it back. If grazier would have wound up with $20M in cash, that looks like a great plan. (Hard to know why they might have been too dense to think of it) Depending on their debt level, their next move might have been an automatic clearing sale.

The $20M cash is normally invested, and in this case would normally be safely tucked away right until there is a definite improvement in the pasture load; then you have to try to get into the first sales because cattle prices start rocketing up.

 

Turbo, if you took your grandfather's advice, how did you come to own your place in the bush? And why did you leave it to go to the city? You have told us how you managed your stock and dealt with dry years. Can you tell us your economic relationship with the block of land you owned and managed?

I've never owned a place in the bush, I grew up there. I broke his rule and financed my place near the City, and now have part fully paid off, part leased, and part agisted,

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I have heard it said "don't bet more than you can afford to lose".

I don't see any difference between borrowing to finance a farm that's in debt, hoping for a break and the guy a the casino betting on credit, hoping for a win to cover the debt.

It's unfortunate and cruel but also reality.

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For my part, I don't see clearing Mulga (or anything) as a long term solution.

 

Our rural industries and communities depend long term upon healthy country (that's something our blackfella neighbours have taught us!). We need to protect and conserve our natural environment within the context of our sustainable production.

 

Somebody struggling from drought starts pushing Mulga to save 5000 head. That scrub might not appear particularly useful (other as emergency fodder), but I would be surprised if it doesn't play a role in capturing and holding water and directing it into the groundwater systems and rivers downstream -and of course stabilising top soils. Push the scrub, then you lose your soil and the systems' stuffed. And there's your next drought exacerbated: its a vicious cycle. Even in good years you'll get grasses back, but the scrub will take years to re-establish.

 

These droughts are felt most acutely on cleared lands that have been flogged and ecosystems degraded. As I wrote before, I also believe that many producers are operating on an economic knife-edge (high debt and highly variable income). Poor financial decision-making and prices driven ever downwards by profit-seeking agricultural commodity brokers will also exacerbate vulnerability to the effects of drought. If margins weren't so tight, maybe more producers could agist, or bring in fodder during bad years.

 

Those 90+ % of Australians squeezed into the urbanised south eastern states really depend on a tiny proportion of the population who remain active in land management and food production across the inland. The situation s becoming precarious. We need people who know and understand the land, which is one of our greatest national resources. We need the insights of our blackfella neighbours and their rich culture, but also need the knowledge graziers, growers and farmers who have worked the land for generations. Around where I live, youngsters tend not to return to the land after higher education, prefer city life and careers, and life free of generational debt, high risk and isolation. I can imagine that 'urban flight' and people leaving the bush is another terrible consequence these episodic droughts down south.

 

Alan

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The $20M cash is normally invested, and in this case would normally be safely tucked away right until there is a definite improvement in the pasture load; then you have to try to get into the first sales because cattle prices start rocketing up.

 

 

I've never owned a place in the bush, I grew up there. I broke his rule and financed my place near the City, and now have part fully paid off, part leased, and part agisted,

 

I thought as much. You have never owned a place and never managed a place which has to pay off a debt. I expect that you worked somewhere as a manager, somewhere prosperous enough to afford to buy stud ewes. (That is my guess because a stud would not have an absentee landlord. At least I don't think.) So what we have here is someone who has never owned their own block, who calls people "negligent" who do own their own block and have debt to service and repay. You took your grandfather's advice, and, like him, skyrocketed to below the bottom rung of the squattocracy, before you hopped off completely. You are no more a land owner than anyone who bought a flat as an investment property. You used the same model: rent it out, gear it and pay it off with your wages. If you don't want a rude reply, allow me to give you some suggestions of my own: a) don't call people with hungry stock "negligent", b) don't post garbage about people who were willing to have a go, and c) don't say stupid stuff like "as a city person, you would not understand" and then post more stupid stuff. I always thought that it was hard to find a good manager because any good manager would have their own place - no counter-evidence here.

 

I have amply demonstrated that it is you who does not understand. People who have successful businesses usually have to borrow to invest and make money. That's why economists worry when liquidity dries up. If people don't borrow to invest, the economy slows. That is why your grandfather had great financial wisdom and proved it by finishing his career setting up trestle tables at other people's clearing sales. Even *after* I pointed out to you that the person with $20M in cattle would have been servicing the debt, you *still* didn't get it. You said the cash would have been invested. In real life, there would have been no cash to invest. The "investment" would have been to partially pay off a loan. Allow me to join those others here who have been rude to you and point out that you would "not understand" if you lived in a bush or the city, not even if people told you over and over. You didn't have a debt. You were a manager. Your economics were different. You weren't forced to gamble. Geddit *yet*? I'll let you have the last word. I am not going to post about this again.

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I've never owned a place in the bush, I grew up there. I broke his rule and financed my place near the City, and now have part fully paid off, part leased, and part agisted

 

Yerrrrr right !

 

How much of your 20 acres have you got agisted? Maybe you might have room for my 3,500 sheep that I'm hand feeding?

 

You also forgot to tell us the names of the stud sheep you sold ! Barbarra, Ben, Billy ........... :puzzled:

 

Wish I'd talked to you last September.

I could have just sold the lot!

Then I wouldn't have been like all the other dumb farmers in our area and spent thousands of dollars trying to keep our breeding stock alive.

Why worry about the last 25 years of hard work, breeding and planning to achieve the prime flock we now run ?

 

Jesssss I'm dumb! :scratching head:

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Drought sourced stock tend to be near worthless - Ill bet those prices you claim aren't for hungry garden variety cattle.

Farming for sure is a gamble, I don't think any business is financially prepared for a 1:100yr event.

If these landowners have to leave, it will have big impacts on the economy as a whole, Like it or not much of our countries wealth is predominantly from miners and farmers.

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Drought sourced stock tend to be near worthless - Ill bet those prices you claim aren't for hungry garden variety cattle.

Farming for sure is a gamble, I don't think any business is financially prepared for a 1:100yr event.

If these landowners have to leave, it will have big impacts on the economy as a whole, Like it or not much of our countries wealth is predominantly from miners and farmers.

Agree, that's why I put the MLA link there, you can work out the value for them if they were prime, and worth a lot more, all the way down to the poorest condition.

To make it simple, I used the basis that 18 months ago they had lost condition, but were still getting feed.

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Drought through the eyes of a 16 year old.

 

"Her family drink bottled water. The washing is done in town.

 

"We only get a three-minute shower," she says.

 

"And for the toilet we use dam water which makes the house smell when it's rotten."

 

16-year-old Zara King's family have two weeks before they run out of hay to feed their stock

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Yerrrrr right !

How much of your 20 acres have you got agisted? Maybe you might have room for my 3,500 sheep that I'm hand feeding?

You also forgot to tell us the names of the stud sheep you sold ! Barbarra, Ben, Billy ........... :puzzled:

Wish I'd talked to you last September.

I could have just sold the lot!

Then I wouldn't have been like all the other dumb farmers in our area and spent thousands of dollars trying to keep our breeding stock alive.

Why worry about the last 25 years of hard work, breeding and planning to achieve the prime flock we now run ?

Jesssss I'm dumb! :scratching head:

I didn't say how much land I own, how much I lease, and how much and when I agist, or the financial model.

It take so long to put the lipstick on the sheep that haven't got around to naming them; they're just 589, 826, 903 etc with their coloured PIC tags.

I also didn't say what breed they were, this thread was about drought and animal husbandry; it's Pen Man that seems to be engrossed in financial models.

I went into last September with core stock, sup. fed them for four months, now we'll see what happens later this year

I'm sorry about your breeding stock and the potential loss of 25 years of breeding. My grandfather's work is all gone, victim of low wool prices, but some in the district ran their flocks at a loss for a generation, with the women working in the booming vineyards along with some of the men. Wool looks to be reviving again, so they and their children may be in the box seat.

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Then there is the Orange grower from central NSW whose 100 year old Orange trees are dying.

 

Maybe she should have sold them before the drought that she should have predicted hit.:bad_mood:

 

She could always restock later.

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I thought as much. You have never owned a place and never managed a place which has to pay off a debt. I expect that you worked somewhere as a manager, somewhere prosperous enough to afford to buy stud ewes. (That is my guess because a stud would not have an absentee landlord. At least I don't think.) So what we have here is someone who has never owned their own block, who calls people "negligent" who do own their own block and have debt to service and repay. You took your grandfather's advice, and, like him, skyrocketed to below the bottom rung of the squattocracy, before you hopped off completely. You are no more a land owner than anyone who bought a flat as an investment property. You used the same model: rent it out, gear it and pay it off with your wages. If you don't want a rude reply, allow me to give you some suggestions of my own: a) don't call people with hungry stock "negligent", b) don't post garbage about people who were willing to have a go, and c) don't say stupid stuff like "as a city person, you would not understand" and then post more stupid stuff. I always thought that it was hard to find a good manager because any good manager would have their own place - no counter-evidence here.

 

I have amply demonstrated that it is you who does not understand. People who have successful businesses usually have to borrow to invest and make money. That's why economists worry when liquidity dries up. If people don't borrow to invest, the economy slows. That is why your grandfather had great financial wisdom and proved it by finishing his career setting up trestle tables at other people's clearing sales. Even *after* I pointed out to you that the person with $20M in cattle would have been servicing the debt, you *still* didn't get it. You said the cash would have been invested. In real life, there would have been no cash to invest. The "investment" would have been to partially pay off a loan. Allow me to join those others here who have been rude to you and point out that you would "not understand" if you lived in a bush or the city, not even if people told you over and over. You didn't have a debt. You were a manager. Your economics were different. You weren't forced to gamble. Geddit *yet*? I'll let you have the last word. I am not going to post about this again.

 

I'm pleased you are not going to post about this again, because right at the outset I explained that it is not really possible to discuss a complex subject on a forum; and you seem to hjave picked up a word here and there and migrated into some amazing financial conclusions.

 

I do own a place, I did pay off one loan over about 30 years to get enough money to put a deposit on this place, and I borrowed again and paid off that loan, and worked a lot more than 40 hours a week to get to the current position.

 

I bought stud ewes? To operate a stud you need to breed.

 

Who said I was an absentee landlord? I'm not.

 

You certainly don't have someone here who has never "owned their own block", and that's an odd term to use.

 

The squatter era occurred in the early 1800's, a bit to early for me.

 

My grandfather never stood at any trestle tables at the clearing sales, the district kids all pitched in with the adults to help the unfortunate ones to make the best of their departure.

 

And so on.........

 

Interesting theories.

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For those on the land looking for some ideas to reduce the effect of drought, or handle it in a variety of ways, I'd recommend these books:

Kidman the forgotten king by Jill Bowen

Back from the Brink, how Australia's landscape can be saved by Peter Andrews.

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Peter Andrews deserves many accolades. The property on which he developed his revolutionary systems was to be dug up for coal. Did this clever country stop that and preserve it as a national landuse laboratory?

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While video of starving baa-lambs and moo-cows plucks at the heart-strings, you have to remember that these animals are herbivores, which means that they eat plants.

 

While it is bad that they have no grass to eat, the drought also means that farmers cannot grow grain, oil-seed, (including fibre crops) and fodder crops. So there is less good grain for our daily bread; less second grade grain for pig and chicken feed, and less oil-seed to go into that feed as concentrated energy sources, and less fodder to truck to the baa-lambs and moo-cows.

 

If this drought keeps up, it will be seafood for Christmas Dinner, and no plum pudding with brandy source.

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...If this drought keeps up, it will be seafood for Christmas Dinner, and no plum pudding with brandy source.

Sorry, OME, even seafood might get scarce. Coastal seafood production declines as a result of droughts because less nutrients flow down river to estuarine breeding areas.

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Some of NSW has had well below average rainfall for seven years, its not just a dry spell.

Andrews work whilst interesting wasn't admired by all and unlikely to be transferable to drier areas where these problems predominate.

As for Kidmans book somehow you are saying all farmers should emulate him?? how?

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He made the very good point that just an extra 20 cents a litre for his milk would resolve all his financial problems, would cover his production costs, and would cover his drought costs.

That would represent a milk price increase of 49%.

I don't have any doubt at all that he deserves it, and if it happened, his income would be spread around the local towns. NOr would it be an imposition on us, pushing a 2 litre bottle of milk in the supermarkets from about $2.00 to about $3.00.

Unfortunately our society has become so ingrained with buying the cheapest possible, that it's not likely to happen.

 

I recently wrote to Coles with a suggestion: Bring out a line of milk, exactly the same as the $2/2 litre Coles brand, but charge $1 more for it. The only difference would be a large sticker on the label saying that extra dollar, in its entirety, is going back to the dairy farmer that produced the milk.

 

I would pay an extra dollar per 2L (or $1.50 per 3L) if I KNEW that money was going to the farmer. Just like, if our chooks go off the lay, I pay an extra $2 - $3 for free range eggs rather than cage eggs. It's automatic.

 

As it stands now, the pricing structure of milk is unclear. If the supermarket has a different brand that's $4 for 2L, how much extra is going to the farmer? How much goes to the bottling & distribution plants, how much to the transport companies, how much to the supermarket and its shareholders?

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Peter Andrews deserves many accolades. The property on which he developed his revolutionary systems was to be dug up for coal. Did this clever country stop that and preserve it as a national landuse laboratory?

His Monument will be the hundreds of thousands of contour channels you see these days from Queensland to South Australia.

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Then there is the Orange grower from central NSW whose 100 year old Orange trees are dying.

Maybe she should have sold them before the drought that she should have predicted hit.:bad_mood:

 

She could always restock later.

I was wondering when someone would come along who didn't know the difference between grazing and farming.

There's no market for uprooted orange trees, or shrivelled up oat or wheat seed; that's a TOTALLY different type of farming.

You still know a drought's coming well before it hits, but there's nothing you can do about it.

You can manage it by average income accounting to a degree.

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I recently wrote to Coles with a suggestion: Bring out a line of milk, exactly the same as the $2/2 litre Coles brand, but charge $1 more for it. The only difference would be a large sticker on the label saying that extra dollar, in its entirety, is going back to the dairy farmer that produced the milk.

 

I would pay an extra dollar per 2L (or $1.50 per 3L) if I KNEW that money was going to the farmer. Just like, if our chooks go off the lay, I pay an extra $2 - $3 for free range eggs rather than cage eggs. It's automatic.

 

As it stands now, the pricing structure of milk is unclear. If the supermarket has a different brand that's $4 for 2L, how much extra is going to the farmer? How much goes to the bottling & distribution plants, how much to the transport companies, how much to the supermarket and its shareholders?

That's a great idea for the Dairy Industry, and long term I think the governments will have to re-regulate it. If you have to get out into the paddock at 4:30 am in the winter dark and spend three hours splashing around in Sh!t and cold water, then filling in the day with broken work, then starting up again for another three hours around 3:30 pm, and you're making a slight loss, it's an easy decision to switch the farm to something else.

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Some of NSW has had well below average rainfall for seven years, its not just a dry spell.

Andrews work whilst interesting wasn't admired by all and unlikely to be transferable to drier areas where these problems predominate.

 

The basic principle he pioneered was to slow the rainfall flow overland, wetting the soil as much as possible before gravity took it on; so it will work anywhere there is rain, but naturally better where there is regular rain. As a result there is more net moisture in the soil per hectare, and that means more feed, and that give the land a higher CARRYING CAPACITY.

I mentioned variations to manage drought a while back, and at the centre is carrying capacity. If you maximise your carrying capacity, you have more choices at the front shoulder of the drought and the rear shoulder.

Even with below average rainfall for seven years, you have more option of carrying a percentage of stock through those years, minimising the crunch to restock.

Peter Andrews book doesn't just cover that principle, it looks at soil degradation and feed types which both allow better front and rear shoulder management, reducing the cost of droughts.

 

As for Kidmans book somehow you are saying all farmers should emulate him?? how?

I just said I recommended his book.

The book shows how the sheep farmers wrecked western NSW and Station after Station failed, and how he managed the properties, spelling some, putting stock on others, moving stock from district to district, using the overland flow from the channel country, moving stock into districts after heavy rain, and moving them to markets. From memory he had up to 10,000 cattle on the roads to the Brisbane and Adelaide markets, and he then pioneered the used of electronic communications by using telegrams to communicate with the markets and his stock managers. He didn't have B Doubles, but walked the cattle to market and he could have a thousand head coming in to Longreach for the Brisbane market, find out prices were falling, but Adelaide's were picking up and telegram the drover to walk them to Adelaide. As they got closer, if the market prices started to fall, the cattle were re-routed to a holding paddock to fatten until prices improved.

 

The book is shows all the variables involved from the breeding to the method of selling the product.

 

It also covers his huge borrowing from the banks.

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China is one nation buying up good farmland in Australia and Africa for food security.

 

Most People don't understand the Ukraine conflict is actually about that the Ukraine is potentially the 3rd largest supplier of food on the planet. That's why Germany/USA were peeved that the (democratically) elected Government decided to sign trade deals with Russia rather than them.

 

China pay ALL FARMERS a pension, profitable farms or not. A few less immigrants and a bit more investment into our Farmers ..... but the majority here will vote ALP or Lib and feel good about yourselves next election, and nothing will change. It never does.

 

Get rid of the cotton farms, no need for the scum water thieves in Australia, replace them with real farms who will use a hundreth of the water.

 

Oh by the way, China are going full speed with trials of rice and wheat that grow in seawater, this is HUGE, and something I expect from the CSIRO, who else grew up with those brilliant CSIRO shorts on the ABC as a kid? - but since grants to them have been cut ..... damn I feel safer with those 6 Drones for 7 Billion dollars, you know, the important stuff.

 

And are you all aware of the 'Belt and Road' initiative by China? I bet it doesn't get much airplay in Oz. Railways (some now completed) and Seaways connecting the 70 Countries that have now sign up for it for joint trade. Wanna guess who hasn't joined in? America and it's 2 lackeys, Japan and Australia, and are now planning their own. Money and profit from trade that could be supporting our Farmers.

 

Why is this important? 2016 exports to China from Australia = $65 Billion dollars for a $20 Billion trade PROFIT, Vs $9 Billion dollars export to the USA for a $10 Billion dollar trade LOSS. (China is one of only 4 countries we make a trade profit from, and is number 1)

 

.. and yet we do everything possible to pee China off, who have other trade options. We go the the China South Sea and we give 100's of millions to surrounding countries to park warships in, say no to the Belt and Road initiative, and worst of all, saber rattle - all on America's behalf.

 

But you Guys go right ahead and blindly vote for America, err I mean ALP or Libs next election and keep hurting our Farmers, which is our future lively hood.

 

 

China is one nation buying up good farmland in Australia and Africa for food security.

 

No one ever mentions Singapore who are the number one land purchases, and China is only number 2 if you include Taiwan, Hong Kong and Macao as a group, otherwise China (Mainland) are number 3 behind Korea.

 

America take the most monetary profit out of the country from their investments, ever hear anything disparaging about that? I mean Holden were an Aussie icon, lets just pretend that all the profits and more (theft of Government grants) didn't go straight to America.

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