Farm decision making a focus at Port Lincoln

Farm decision making a focus at Port Lincoln

The levels of risk associated with farming on the Eyre Peninsula will be examined at a farm business forum in Port Lincoln.

Understanding and managing risk will be one of the key topics on the agenda at the Grains Research and Development Corporation (GRDC) Farm Business Update, aimed at supporting local growers who are looking to establish the most profitable enterprise mix and make the most from their earnings.

The Farm Business Update on July 5 2017 will feature a line-up of expert speakers, including Nicon Rural Services consultant and livestock producer Cam Nicholson who will delve into the topic of risk and enterprise mix.

Mr Nicholson, of Geelong (Victoria), says it is important that growers know their risk profile and the risks attached to different farm enterprises.

“Risk is a natural and accepted part of farming, and there are many strategies farmers use to manage production risk,” says Mr Nicholson who is a project leader for the Grain & Graze program, a GRDC investment.

“To manage risk effectively we need to understand both the downside – the potential harm from taking a risk – and also the opportunities that taking a risk can offer.

“There is no reward without risk. In farming, risk is a necessary part of making returns,” says Mr Nicholson, who is also a lead for the GRDC’s high rainfall zone Regional Cropping Solutions Network (RCSN).

“Managing risk is about making decisions that trade some level of acceptable risk for some level of acceptable return for an acceptable amount of effort.

“Decisions can be made to reduce risk, but it usually comes at a price – namely lower returns.”

Through the Grain & Graze program, a relatively simple way of looking at the risk in a given farming business has been developed, and Mr Nicholson will explain the process to those attending the Farm Business Update.

The timely topic of fixed versus variable interest rates will be another issue for discussion at the Update, with Andrew Toole from Robinson Sewell Partners comparing the options available to local grain growers.

Mr Toole will also offer some tips on how growers can capture depreciation offsets when purchasing land.

Neville Brady from Bunch Consulting will look at what it takes to put in place a “great team” to make farming enjoyable and profitable, while James Hillcoat from Rural Directions will place the spotlight on farm machinery, with a particular focus on why and when these assets should be upgraded.

Making the best use of profits will be at the centre of a presentation by ORM’s Phil O’Callaghan, who will outline what the “top 20 percent” farm operators do with their farm surpluses in terms of expansion, repaying debt and investing off-farm.

Image: Cam Nicholson

Source: GRDC