Tradition isn’t always best in agribusiness.
A new breed of farmer is emerging who relies less on traditional thinking and more on information and resources to re-examine their production mix. Here are the top trends for those in agribusiness.
The golden age of farming
Industry experts, such as Simon Talbot, National Farmers Federation (NNF) CEO, predict Australian agriculture is entering into a golden age on the back of growing Asian demand for produce.
Helped along by trade agreements with Australia’s largest Asian trading partners, farmers have access to markets that will continue to grow due to population growth and an affluent middle class.
These markets expect quality, clean and green produce and demand industry accountability and traceability. This has the potential to change the demand on Australia’s commodity exports; one recent example is China’s demand for Australian sorghum where buyers bought up the bulk of the 2015 crop.
The agricultural industry has many faces, some like the one that’s been described and others are younger people who look at farming not just as a lifestyle and business, but as a smart investment.
New agribusiness investment
The emerging agricultural boom has sparked new investor interest in farming.
After travelling the country speaking with farmers, students, young people and the broader community, Talbot has discovered people are seriously looking at farming as an investment opportunity. This investment isn’t just coming from traditional sectors; increasingly a new type of investor is emerging. This new investor, typically in their 20s and 30s, doesn’t necessarily have the family history or operational knowledge of existing farmers.
He cites recent purchases of significant Australian agricultural assets by the likes of James Packer and Gina Rhinehart as one reason the new investor is emerging.
“I was taught to follow money,” says Talbot.
He argues seeing big and successful businesses entering the industry is viewed as a strong endorsement of the industry’s potential, and when combined with foreign interest, makes people look at the industry seriously.
The rise of the ag-entrepreneur
Younger investors or ag-entrepreneurs don’t have the history associated with established farmers when it comes to production, they also take a different perspective on crop and livestock choice.
Treating farming more like an investment portfolio is common amongst ag-entrepreneurs to manage risk and seek return on investment. While they look at the supply and demand trends that could affect their investment they also turn to the resources that are available: markets, marketing tools and the expected return, drive crop and livestock choice.
Younger, educated farmer taking over the farm
Aside from this new breed of farmers, younger generations of existing farming families are bringing their business acumen to the table to bust apart traditional views on what should be produced. Looking at soil, moisture and climate change constraints, production is being reviewed to plant not just what has always been planted but what variety or crop will get a better financial outcome for the business.
After speaking with farmers, the NFF CEO has come to the conclusion they have taken a look at marketing tools and chosen those that lock in a forward price for their produce.
This has been helped in part by the access to information available using the internet.
“People are more educated about markets, and use this information to evaluate what marketing tool will be the most profitable,” Talbot says.
It’s unlikely this wave of younger, educated farmers is a one-off. Talbot reports that country-wide, young people ask about agricultural studies. His experience has led him to believe interest in agricultural studies has renewed.
“I estimate interest in agricultural science has doubled in the last 18 months. When people ask me, I say you should do a science, engineering or social science degree plus a business qualification to arm themselves for a career in farming.”
Equipping farmers to capture the opportunity
While some of the emerging changes may seem daunting, they also present an opportunity. A dynamic approach to farming can make the business more profitable and sustainable.
Setting yourself up could mean enrolling in that university course you’ve been putting off or using one of the many services provided by a new wave of agri-professionals who make it their business to get yours. They will be able to interpret market data, resource data and plan out what crops or livestock will suit your farm and make you the most money.
All of this will make farming more informed and help better manage risk to grow the industry and create a stronger future for farmers and the rural community.
While the face of the Australian farmer is likely still to be a little weather-worn, a younger face is emerging, that’s more at home in a suit than a pair of Blundstones.
For more information about the key trends and talent landscape in the AgriFood industry, download our free report.