It might feel like there is a lot going against you right now, rising input costs, reduced commodity prices, higher interest rates and now a challenging season for many parts of Australia. 

Is it all worth it? 

How do I get ahead? 

When will interest rates come down? 

When will I finally get that “Average” season everyone talks about? 

You are working harder than you ever have just to cover the bills. 

The banks are asking more of you than ever… 

…another cashflow budget, please. Oh yeah, and you need to report to me monthly on how you are tracking against that budget and any variances. Oh, and one more thing, you know that second harvester you have. You need to sell it by Christmas. 

You made decisions over the last 5 years to expand, which was exciting, and now it just feels like nothing is working. 

Lying in bed late at night, you are mulling over whether expanding was the right thing to do. Maybe it’s time to sell part of the farm… or maybe you need to sell all of it? 

You know what, stuff it. I’m going to sell up and go do something else.  

This thought might have crossed your mind several times recently. 

But the farm has been in your family for multiple generations, and it can feel like there is so much pressure not to stuff it up. 

The conversation around town inevitably comes back to frustration about the lower prices, higher costs, higher interest rates and how that’s the problem… 

BUT… in the back of your mind, you just can’t see things changing significantly in the next few years. 

And, you have this feeling that perhaps there is more to it. Maybe there is an issue with your business.  

Will it ever deliver you positive cash flow again? 

…Or will you be a slave to the bank for the rest of your life? 

3 years ago, the business just seemed to work. There seemed to be plenty of cash around.  

You haven’t really changed what you were doing, and you know you are doing a good job technically on the farm, but now it doesn’t feel like you are getting the rewards for your efforts. 

You talk to your partner and share that you are not sure how much longer you can keep this up.
 

You certainly can’t work harder than you already are…  

And…farming just doesn’t feel that fun anymore. 

This story may resonate with you or with someone you know and care about. 

The important thing to keep in mind is that before you make any drastic changes in your business, it is important to figure out what’s actually going on. 

There is no need to panic. But you also can’t channel your inner Ostrich and stick your head in the sand either. 

Making big changes based on how you are feeling right now that are not backed by the numbers with a clear picture of your current reality is likely to lead you to short-term thinking that makes a tough situation worse, erodes your wealth or has you wind up regretting the change for a long time into the future. 

When things get tough, the best farm owners take time to step back from the day-to-day and get an eagle-eye view of their business. They are putting things in place & seizing opportunities that will see them be successful in the next 10 years. 

It’s true that the market has raised the stakes in the last 18 months. Things that were working just aren’t any more. 

The truth is that for the AVERAGE farm business, their business models are barely profitable (or making a loss) in the current market and will struggle to cover the interest (let alone principal repayments) on any reasonable amount of debt. 

If you take stock of the current situation, interest rates are at long-term average prices, and the majority of commodities are trading around their long-term average. This means that we aren’t in low commodity prices or high interest rates. This is normal compared to historical averages. 

All doom and gloom?  
 
Luckily, it’s not. 

The good news is that the TOP Producers are still very profitable in the current market, and they aren’t doing things significantly different to the average farm owner. 

If they can do it, then you can too! 

So, if this resonates with you or someone you know, the thing you need to work out right now is: 

• Is it just a challenging season that you need to get through, proactively manage your cash position and get a clear plan in place for next year with your creditors and the bank that allows you to reset and go again… or 

• Is there a fundamental issue with your business model that means you are going to keep losing money at these more “normal” commodity prices and interest rates persist… or 

• Is your business model ok, but you have just taken on too much debt over the last 5 years and need to do something about it... or 

• Is it a combination of all 3? 

If you aren’t clear on how to figure this out, you have a big opportunity ahead of you.  

Everyone can acquire the fundamental skills that will set your business up for success in the next 10 years. 

If you would like help with this, we are running the TOP Producers Workshop on the 24th & 25th of February 2025 in the Gold Coast (or join virtually), where you will work on your farm business to understand what is and isn’t working.  

You will leave with a clear plan and actions that will set you up for success next year. At worst, you will meet some other awesome farm business owners and have a bit of fun. You never know the impact a new connection may have on your business. 

Remember that the best businesses are made in the toughest times.

 

I look forward to seeing you on the Gold Coast. 

Regards, 

Sam Johnsson 

CEO - Farm Owners Academy 

P.S.  We have discounted early bird tickets available for a limited time to attend the 2-Day TOP Producers Workshop. You will leave this 2-day workshop with so much clarity on the next best steps for your farm business. You can bring your whole family & team and attend in person or virtually. CLICK HERE TO REGISTER.