Caution with developing 'cheaper' properties

A major problem is lack of capital to develop farms that commonly need a lot of investment to get them profitable, as well as productive, combined with long term improvement.

It is important to have a realistic long term plan - including budget - for upgrading these farms.

That helps appreciate the task ahead and to prevent falling into despair as little happens while bills escalate and returns are poor.

Generally low soil fertility is a major aspect while weeds may be a problem.

Upgrades are often needed in areas like pasture types, fencing, water infrastructure, and improved stock handling set-ups.

Regrowth can get out of hand and is expensive to control. There may be legal challenges to deal with it and these need checking out. In 50 years of advising I have seen regrowth cleared up to four times on some properties with a fifth often facing a new buyer.

Regrowth of various species can be rapid. Commonly these problems go with lack of realistic budgeting with costs getting out of hand and lack of a planning that would negate further regrowth issues.

On a recent tablelands trip, I saw thousands of hectares of blackberries, St Johns wort and other weeds dominating mainly non-arable grazing land. The often adjoined properties had these issues well controlled.

Our own property, purchased 15 years ago, was once described to us as one of the three poorest in the district.

There were issues like tree regrowth in some areas, a need for pasture and soil fertility upgrading, more subdivisions and a better water supply. The previous owner had made good progress but there was potential for more upgrading.

Laneway and paddock designs along with tropical grass plus winter legume pastures after a two-to-three-year cropping cycle to eliminate weeds, and provide winter feed, was an important part of our plan.

Clearing of regrowth needed to be followed up with spot spraying plus establishing a competitive pasture. A practical budget was required and this had to be embedded into the property loan.

Any budget is at best an estimation of costs and returns from future livestock and cropping. There is uncertainty in these estimates and budgets need constant adjusting but these plans are better than no plans and provide information of how progress is occurring.

An unexpected issue for us, and many others, was the prolonged drought in 2017, 2018, and 2019. Ours was an area with a poor history of finding good bore water.

A visiting driller reckoned he could find ground water for us, and several neighbours, but it would be deep and expensive. That proved to be true, but vital water was found and has been harnessed for distribution across the farm.

No issue for newly purchased, often regarded "poor" farms, is more vital for attention than low soil fertility. Don't address soil fertility and one is locked into poor crop and pasture performance.

Research has shown that so-called cheaper 'alternative to fertiliser' products have no research to back them. There are alternatives to conventional fertilisers like superphosphate and MAP, but they need to be applied at rates where sufficient nutrients, in available forms, are applied.

Disaster is a constant companion for those that ignore scientifically verifiable soil fertility information.

In our case, soils were low in sulphur and phosphorus, as well as nitrogen. Ensuring suitable legumes were part of the pasture, plus adding fertilisers to address phosphorus and sulphur deficiencies, has led to these legumes supplying nitrogen.

A portion of the property cropped has been important for winter feed as well as for cleaning up weeds before sowing to improved pasture. Choosing suitable crop and pasture varieties has also been important. In our case, acid soils means acid tolerant species are best.

A so-called poor property can be developed to be a profitable business with no short cuts and base development on realistic budgets and plans.

Next week: More pulses in rotation adds to more profit