Given the severe cost-of-living pressures that the general community is under, it’s worth questioning what agriculture hopes to achieve by frequently sharing their financial struggles.
“While most of us are baulking at the increased cost of keeping a family fed, dairy farmers who produce some of that food are copping a 10-16 per cent pay cut. That loss of income is pushing many young Australian farming families to the brink.
…. farmer .. fought back tears as he described the pressure of being at breaking point.
“I am going to try and get through,” he said. “I’m not giving up, but I came so close the other day [when he heard about the milk price] — I haven’t been so depressed and down in a long time. Source
25 years ago I too thought this doom and gloom strategy had merit until a very wise man ( than you Dr Neil Moss ) explained to me how counterproductive it could be. This set me on a journey to provide the expertise tools and knowledge to teach agriculture’s young people how to share a balanced perspective and it continues to frustrate me how much further we have go . See all the links in this story
As the cost of living continues to rise, it’s essential for agriculture to communicate its challenges in a way that aligns with the broader economic realities faced by Australians. By presenting a balanced narrative and engaging in collaborative solutions, the industry can foster greater understanding and support from the public, ensuring its sustainability and success in a challenging economic environment.
Considerations
- Public Perception: When everyday Australians are already grappling with rising housing costs, rent, and food prices, constant reports of farmers’ financial woes might lead to public fatigue or desensitization.
- Support and Advocacy: While raising awareness about the challenges in the agriculture industry is important, it’s crucial to ensure that the message resonates with a public already feeling economic strain.
- Balanced Narrative: Highlighting both the struggles and the resilience within the industry might foster greater public empathy and support. For instance, showcasing innovations, community contributions, and the importance of local dairy production could engage a broader audience.
- Collaborative Solutions: Focusing on potential solutions and collaborations with consumers, policymakers, and other stakeholders can drive constructive conversations and actionable change.
The Impact of Doom and Gloom Press on Labour Attraction in Agriculture
The pervasive “doom and gloom” narrative in the media significantly hampers the agricultural sector’s ability to attract labour. Constant negative coverage creates a perception of instability and hardship within industries such as grains, sheep, beef, dairy, and horticulture, deterring potential workers from entering these fields.
For example, the dairy industry has over two-thirds of producers reporting difficulties in finding workers (Rural Bank). Similarly, the grains industry struggles with severe labour shortages due to regional demographic shifts and inadequate workforce planning (Grain Producers AU). The sheep industry also faces a critical shortage of skilled shearers, exacerbating the problem (Rural Bank). This negative press not only impacts recruitment efforts but also affects the morale and retention of existing workers. To combat these issues, it is crucial to balance the narrative by highlighting success stories, innovations, and the essential role of agriculture in sustaining the economy and food security. This can help attract a more stable and committed workforce, ensuring the long-term viability of these vital industries.
Comparison of Cost-of-Living Ratios for Australians: 2019 vs. 2024
Cost of Living Ratios 2019 -2024
As the cost of living continues to rise, it’s essential for agriculture to communicate its challenges in a way that aligns with the broader economic realities faced by Australians. By presenting a balanced narrative and engaging in collaborative solutions, the industry can foster greater understanding and support from the public, ensuring its sustainability and success in a challenging economic environment.
References
For those keen to explore this further here is what I have learnt along the way. Note: The data presented under “Farming is a Risky Business” has been collated by me using a variety of sources. If you wish to use it, please fact-check it first (and if you find any errors, please let me know).
Yes Farming is a very Risky Business
Financial Risk Comparison: Farming vs. Retail Business in Australia
| Risk Factor | Farming Business | Retail Business |
| Market Volatility | High – Fluctuations in commodity prices and input costs significantly impact profitability (Agriculture Australia) (GRDC) | Moderate – Sensitive to economic conditions and competition, but more predictable than farming.Deloitte US |
| Weather and Climate Risks | High – Dependent on weather conditions; climate change increases unpredictability and risk (Agriculture Australia) (GRDC) | Low – Minimal impact from weather, primarily affected by economic factors Climate Change Adaptation NSW |
| Biological Factors | High – Risks from pests, diseases, and other biological threats can devastate crops and livestock (Agriculture Australia) (GRDC) | Low – Minimal impact from biological factors; main concerns are product shelf life and spoilage for perishable goods. CEOpedia |
| Regulatory Risks | High – Changes in agricultural policies and regulations add to operational uncertainties (Agriculture Australia) (Safe Work Australia) | Moderate – Subject to business regulations, but generally more stable than agricultural policiesBusiness.gov.au |
| Capital Requirements | High – Significant initial investment in land, machinery, and livestock; high ongoing maintenance costs (Agriculture Australia) (GRDC) | Moderate – Variable initial investment depending on location and business size; ongoing costs for inventory and space. SmartBusinessPlan |
| Health and Safety Risks | High – Higher risk of physical injuries, chemical exposure, and zoonotic diseases (Safe Work Australia) | Moderate – Risks include slips, trips, falls, and customer-related incidents (Safe Work Australia) (Safe Work Australia) |
| Predictability | Low – Many uncontrollable external factors like weather and market conditions (Agriculture Australia) (GRDC) | High – More predictable and controllable risks related to market trends and business operations. InData Labs |
| Financial Stability | Low – High volatility in income due to external factors; significant risk of financial instability (Agriculture Australia) (GRDC) | Moderate – Generally more stable income with fluctuations based on economic conditions and competition. Bizfluent |
| Risk Mitigation | Diversification, insurance, and adopting resilient agricultural practices (Agriculture Australia) (GRDC) | Market research, diversifying product lines, and effective inventory management. BizCover |
Comparative Risk Factor
| Comparison | Details |
|---|---|
| Risk Factor | Volatility in Australian Farming:
GRDC Update Paper “Factoring Risk into Farm Decision Making,” |
Conclusion
While both industries face significant risks, the inherent unpredictability of farming due to weather, market volatility, and biological factors makes it a riskier venture compared to retail, where risks are more predictable and controllable. This highlights the importance of effective risk management strategies for sustaining farming businesses in Australia.
Potential Consequences of Negative Press Coverage and Mentioning Large Financial Losses
| Category | Impact | Details |
|---|---|---|
| Negative Perception | Industry Instability | Negative coverage can create a perception that the dairy industry is unstable, deterring investors and consumers. |
| Consumer Confidence | Consumers might lose confidence in the products they purchase, thinking the industry is failing or exploitative. | |
| Impact on Farmers | Morale | Constant negative media can demoralize farmers who are already struggling, leading to decreased productivity and more farmers exiting the industry. |
| Community Trust | Farmers may feel less supported by their communities and the broader public, exacerbating feelings of isolation and helplessness. | |
| Financial Implications | Investor Reluctance | Highlighting large financial losses can make potential investors wary of putting money into the industry. |
| Market Reactions | Negative reports can lead to panic or reduced spending in related sectors, affecting the broader economy. | |
| Policy and Public Response | Hasty Policies | Policymakers might feel pressured to act quickly, leading to ill-conceived policies that don’t address the root issues. |
| Public Backlash | The public might push for changes without fully understanding the complexities, leading to unintended consequences. | |
| Contextual Misunderstanding | Misleading Numbers | Large figures like $217,000 can be misleading without proper context, skewing public perception about average incomes or industry norms. |
| Lack of Nuance | Focusing on dramatic numbers oversimplifies the situation, ignoring the nuanced challenges and solutions within the industry. | |
| Potential Solutions | Balanced Reporting | Media should provide a balanced view, highlighting both challenges and success stories to offer a more comprehensive picture. |
| Focus on Solutions | Articles should also focus on potential solutions and innovations within the industry, inspiring hope and encouraging support. | |
| Engagement with Stakeholders | Constructive dialogue with all stakeholders, including farmers, consumers, and policymakers, can help develop comprehensive strategies to address the issues. |
Summary
Negative press coverage and the mention of large financial losses, such as the $200,000 loss in the dairy industry, can have widespread consequences. These include creating a perception of industry instability, lowering consumer confidence, and demoralising farmers. Financially, it can deter investors and negatively impact market reactions. Negative press not only impacts recruitment efforts but also affects the morale and retention of existing workers. Policymakers may feel pressured to act hastily, potentially resulting in Band-Aid solutions. Additionally, without proper context, large figures can mislead the public, oversimplifying complex issues.
Balanced reporting, focusing on solutions, and engaging with all stakeholders are essential to foster a better understanding and support for the agriculture industry. This approach can help mitigate the negative impacts of sensationalist reporting and promote a more accurate and constructive dialogue about the industry’s challenges and opportunities.
Comparing Volatility Risk in Top Agricultural Industries in Australia
Here is the list of top agricultural industries in Australia, ranked from highest to lowest volatility risk based on various factors such as climate dependence, market prices, and operational challenges.
| Industry | Volatility Risk Factors | Impact and Trends |
| Grains and Oilseeds | – Climate Dependence: Highly susceptible to weather conditions, including droughts and floods. | – Significant output growth but affected by climate change. |
| – Global Market Prices: Fluctuations in international market prices can cause instability. | – Fastest-growing export segment in real value terms between 2003-04 and 2022-23 (Agriculture Australia) (Agriculture Australia). | |
| Sheep | – Market Prices: Wool and meat prices can be volatile, influenced by global markets. | – Decreased output due to shifts towards cropping and destocking during droughts (Agriculture Australia). |
| – Drought: Prolonged droughts can severely impact flock sizes and productivity. | – Adjustments post-1990s, with productivity improvements and structural changes (Agriculture Australia) (Agriculture Australia). | |
| Beef | – Weather Variability: Rainfall and pasture conditions heavily impact production levels. | – Productivity growth driven by improved pastures and genetics (Agriculture Australia). |
| – Disease Outbreaks: Risks of diseases like Foot-and-Mouth Disease can cause severe disruptions. | – Major export industry, with significant volatility due to disease risks (Agriculture Australia). | |
| Dairy | – Market Prices: Prices can fluctuate significantly due to changes in global demand and supply. | – Productivity growth has varied, influenced by structural changes and technology adoption (Agriculture Australia). |
| – Feed Costs: Variability in feed prices affects overall production costs. | – Record farm cash incomes in 2022-23 but susceptible to production disruptions from wet conditions (Agriculture Australia). | |
| Horticulture | – Weather and Pests: Weather conditions and pest outbreaks can lead to substantial losses. | – Steady increase in production, particularly in high-value crops (Agriculture Australia). |
| – Labour Costs and Availability: Dependent on seasonal labour, which can be variable and costly. | – High export orientation, with significant peaks in demand (Agriculture Australia). |
Key Takeaways
- Grains and Oilseeds: This sector faces the highest volatility due to its dependency on climate conditions and global market prices. Despite this, it has seen significant growth, particularly in exports.
- Sheep: The sheep industry is highly susceptible to market price fluctuations and droughts. Structural changes and technological advancements have helped improve productivity.
- Beef: The beef industry is significantly affected by weather variability and disease outbreaks. However, improvements in pastures and genetics have driven productivity growth.
- Dairy: Dairy farming is influenced by fluctuating market prices and feed costs. The sector has seen record incomes but remains vulnerable to weather conditions and market changes.
- Horticulture: Horticultural products face risks from weather conditions, pests, and labour availability. Despite these challenges, the sector has seen steady production growth.
Conclusion
Each of these top agricultural industries in Australia carries its own set of volatility risks, primarily driven by climate dependence, market fluctuations, and operational challenges. For anyone looking to invest in or manage these industries, it is crucial to have a thorough understanding of these risks and to develop strategies to mitigate them. This includes diversifying income sources, investing in technology, and adopting best practices in risk management.
Strong financial skills and a supportive team can significantly help in navigating these challenges, ensuring that your business remains resilient in the face of volatility.
Navigating Financial Risks in Business: The Importance of Strong Financial Skills and a Supportive Team
Entering any business venture requires more than just a great idea; it demands a deep understanding of the financial landscape and the risks involved. Whether you’re considering farming or retail, each industry presents unique challenges that can significantly impact your financial stability. Therefore, it’s crucial to approach your business with your eyes wide open, equipped with strong financial skills, and surrounded by a team of experts who can fill in the gaps in your knowledge.
The Importance of Financial Skills
Having strong financial skills is essential for navigating these risks. You need to be able to:
- Analyse Financial Statements: Understand your balance sheets, income statements, and cash flow statements to make informed decisions.
- Budget and Forecast: Create accurate budgets and forecasts to prepare for various scenarios, especially the worst-case scenarios.
- Manage Cash Flow: Ensure you have enough liquidity to cover operational costs, even during tough times.
Building a Supportive Team
No business owner can master every aspect of running a business. This is why having a team of experts around you is invaluable. Here are key roles you should consider:
- Accountant/Financial Advisor: Helps with financial planning, tax strategies, and maintaining financial health.
- Legal Advisor: Ensures your business complies with all relevant laws and regulations.
- Operations Manager: Manages day-to-day operations, allowing you to focus on strategic planning.
- Marketing Specialist: Develops strategies to attract and retain customers.
Going into business is not a solo journey. It requires a well-rounded understanding of financial risks and a robust support system. By equipping yourself with strong financial skills and surrounding yourself with a team of experts, you can navigate the complexities of your chosen industry with confidence and resilience. This proactive approach will help ensure that your business not only survives but thrives in the face of challenges.
Approaching your business with your eyes open and being prepared for the financial risks involved is the key to long-term success. So, take the time to build your knowledge, assemble your team, and embark on your business journey with confidence.
#BusinessPlanning #FinancialSkills #FarmingRisks #RetailRisks #BusinessSuccess #Entrepreneurship #FinancialManagement #SupportTeam #RiskManagement #BusinessStrategy
I am a self established farmer who realises that having a farm handed down would be much easier to look at farming in a different light.
Ony by graduating with a Diploma in Farm Management have I managed to make a go of farming for the long term,
However the way farmers are treated by all tiers of government during droughts and by listening to minority groups makes this sort of proposal for any young person nowadays (especially without family backing) an impossible feat.
I have found drought assistance always has a window the size you can never get through and the actions like the Wool Floor Price fiasco, Dismantling of the Wheat Guaranteed Price, the Cattle Live Export halt and now the demise of Live Sheep Exports, typical indicators of so how far out of touch that politicians are.
Red Tape and ever stronger enforcement of animal rights lobby group agendas do not help when farmers are already vitally concerned with the welfare of their animals under their care.
I often wonder whether the French farmers have the right idea as this seems to be the only way that farmers voices can now be heard; especially since one-vote one-value was introduced and farm size (hence rural populations) changed so much with the demise of thousands of family farms.
A constant convoy of farmers taking the trip to Canberra and doing a few laps of the city over a couple of weeks might make them realise that farmers are willing to stand against destroying policies.
No doubt then the government would invoke some law to stop them like they did years ago when dairy farmers went on strike and threatened to open their taps on the milk vats. They invoked the essential services act and called in the army!
Thank you for sharing your perspective. It’s clear that you’ve faced numerous challenges and have strong feelings about the support (or lack thereof) from the government.
I believe it’s crucial, regardless of the profession we choose, to enter it with our eyes wide open and to surround ourselves with a team that has the necessary skills to weather the highs and lows of the business. Agriculture is one of the riskiest industries, with many factors such as climate and global prices beyond our control. While we can advocate for better support and fair policies, we must also recognise that we cannot always rely on the government or taxpayers to rescue us.
Instead, we need to build resilience within our communities and businesses, and find innovative ways to mitigate risks. Engaging in continuous education, like your Diploma in Farm Management, and fostering strong networks can help in navigating these challenges. Your suggestion about making our voices heard through collective action is a powerful reminder of the importance of unity and advocacy in driving change.
Thank you again for your insights and for contributing to this important conversation.