The trend for many years has been for farm businesses to become bigger, largely from purchasing adjoining properties. Economics of scale, such as farm equipment that can undertake operations like sowing in a fraction of the time once required, predominate as reasons for farms becoming larger.
However as many readers of The Land can testify there is also a strong component of agriculture that successfully run small properties.
Many of these owners have another occupation. Well managed these properties can be just as profitable, per hectare wise, then larger family owned farms as well as well-run large corporate ones.
For success there are a few differences for small operators. I think I can talk from our experience in this regard as on todays scale our property, 283ha or 700 acres, while 50 years ago a typical size farm, is a small property.
Because good equipment, for sowing, harvesting, spraying, fencing and the like, is so expensive and mainly scaled for larger operations, good contractors are an important part of many smaller farms.
That can be a challenge, and requires advanced notification of requirements by the owner, as well as a reliable contractor.
For example 20 per cent of our property, in a central west 625mm average annual rainfall environment, is sown each year to dual purpose winter crop. That requires up to five fallow herbicide treatments as well as timely early sowing.
To help with contractor for sowing, we aim to sow a little ahead of the main sowing window, including sowing dry if suitable rains have not arrived on time.
A contractor with good equipment can also commonly achieve good establishment on a minimal rainfall event, important for reliable winter feed.
Following a summer rain it is important to inform our spray contractor quickly for spraying in around 10 days' time.
Years ago as part of training when undertaking a post graduate rural extension degree, surveying small and large farmers in an area with a good balance of both was undertaken.
Perhaps surprisingly average stocking rate was similar for both small and large, and gross margins/ha were similar.
A good knowledge of agriculture is important for both small and large operators. An upgrading plan is also a good way to go forward and assess progress. Plans can constantly be changed as circumstances change.
Addressing issues like soil deficiencies, adding appropriate legumes and for most areas adding long term persistent grasses is a sound strategy to progress with.
Smaller properties commonly benefit from additional subdivision.
This can be beneficial for stock management, for example keeping young heifers separate from the cow herd to best time pregnancy.
A degree of rotational grazing is beneficial for many pasture species, including native grasses. Maintaining adequate ground cover is also important for avoiding potential wind and water erosion, as well as for good recovery following rain.
For small properties running livestock, a knowledgeable and personality compatible stock agent is, I feel, also critical for most of us. For example during the drought a really good knowledge of purchase and sale options via our agent was especially important.
While we normally sell steers at around 460 to 520 kg/head, our agent found good markets for steers in good order at around 350 kg/head. That was important for downloading stock numbers as water issues increased.
Big and small properties commonly faced water issues during the drought. We were no exception and have had to substantially upgrade water infrastructure.
A new deep bore, troughs, and distribution system have all been installed. More hay storage has also been part of better preparing for the next drought.
All of this has been paid for from profits generated by the farm.
All business types, not just farming, have a percentage that don't make it, big and small enterprises. However I believe there are many examples of small farms, not only providing a good lifestyle, but are capable of providing a good return, as well as excellent capital gain.
Next week: Keeping a check on pasture feed quality.
- Bob Freebairn is an agricultural consultant based at Coonabarabran. Email robert.freebairn@bigpond.com or contact (0428) 752 149.
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