Selling to save the farm

29 Jan, 2013 01:00 AM
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WES Hall loves farming. That's why, in 2007, he sold his Newdegate property to a European investor.

And after five years as manager of EDL Farms, with wife Penny and children Bayley and Piper, he couldn't be happier.

His scenario is likely to become more common in future years as Wheatbelt family farms struggle against rising costs and a string of poor years.

The third generation farmer was in the same boat until an astute investor saw potential in the low rainfall district with the bonus of an experienced ready-made farm manager to oversee the 9463ha (23,373ac) cropping enterprise.

Remarkably, given the yearly rainfall mostly below the 350mm district average, the investor has recorded only one loss year.

"I don't think I would have been able to achieve that by myself," Wes said. "That's the advantage of having a corporate owner who is a whizz at financial planning and forward selling."

The owner, no doubt, would add that his skills combine well with Wes' ability to grow crops with less than desirable rainfall.

A classic win-win - which is almost a template for any investor.

For his part, Wes finds himself with more time to evaluate the farm's operations than he would as an owner-farmer.

"I spend a lot of time overseeing staff and there's a feeling of more responsibility in having your finger on the pulse," he said.

"If it was my farm I must admit I would probably have a more relaxed attitude but working for a corporate farm does put a focus on things.

"For example, I'm more proactive with safety issues and we've got a safety officer and high-vis gear is a must for staff to wear on the job.

"The other good thing about being a manager is the financial pressure that builds up in your mind in a tough year is less.

"I still worry but there's not that empty feeling of where will the money come from."

Capital acquisitions, however, is a big ticket item to discuss with his boss.

"I speak with him at least once a month and if anything is outside the budget, I need to present a good case," Wes said. "But generally I have a lot of autonomy.

"With some decisions I'll consult with other people and get varied opinions then I'll trust my own judgement."

According to Wes, corporate farming will grow.

"I think it can work but there will be downsides like less people in communities because machinery is becoming more efficient so there will be less requirements for farm labour and corporates tend to buy large parcels of land," he said.

"But on the flipside, having corporates in farming can be good for communities because the corporates want farming to remain viable and it will impact with higher land prices.

"Its self evident with the requirement to feed the world, that investors see a big upside in farming, including its investment value."

The big factor for investors to pencil in is the requirement for highly skilled labour and management.

Wes agrees with his investor that there is potential for the operation to become a more productive entity.

And this is the value in having a farmer on board.

Like his father Vern, who cleared the farm in the late 1950s and supplemented income as an International dealership with his brother Alan "Tiger" Hall, Wes has that innate desire to make a fist of farming.

After stints at Wesley College, Narrogin Agricultural College and playing football for Claremont, he returned to the farm in 1989.

Within a few years he was ready to assume control from his dad, who retired and then later, Wes brought out his dad brother's share in the farm.

That was his start of an education in farming not taught at college.

The farm became his university, with his father and neighbours willing professors to teach and guide him.

The obvious benefits of that education are readily apparent today with perhaps an even stronger desire to increase productivity on the farm.

"We've got to think of better ways to increase crop yields in low rainfall areas while keeping a handle on costs and the only way I see, at this stage, is to become more efficient."

Wes also rates highly an ability to think outside the square.

And staring at the farm's 10 year yield average is all the motivation he needs.

Wheat sits at 1.8t/ha, barley at 1.9t/ha and canola at 0.8t/ha - all achieved in arguably one of the driest rainfall decades in history.

Last year, Wes assessed new canola varieties Snapper and Stringray, to compare with the Cobbler variety he uses.

In three replicated trials, the Snapper averaged 1.524t/ha with 45.7 per cent oil; the Stingray 1.543t/ha (45.4pc) and the Cobbler 1.350t/ha (43pc).

"They were all sown on May 1 and growing season rainfall was 150mm," Wes said. "Fortunately we had 140mm of summer rain, the previous November and December, so we got a result.

"With the summer rain giving good sub soil moisture, we planted 1000ha of canola dry which averaged 1.22t/ha , then sowed 833ha after the break rain, which averaged 700kg/ha, then another 800ha late, trying to capitalise on canola prices.

"That averaged 500kg/ha so for the 2633ha canola program we ended up averaging 826kg/ha.

"Our best canola paddock was Cobbler yielding 1.7t/ha with oil between 41 and 42 per cent so its gives us some confidence with the new varieties.

"We'll probably grow a bit of Snapper, being a shorter season variety and blend the three varieties for the rest of the program."

Blending is a new strategy following success with blending Hard varieties Mace and Yipti.

"The idea is to cover ourselves during the frost window," Wes said. "It worked in our favour last year when frost hit our sand-over-clay country.

"The Mace heads were showing three wide while the Yipti was still flowering with a couple of grains.

"In combination, we got 1t/ha but if we had only Yipti we probably would have finished between 100 and 200kg/ha.

"The other aspect of blending is that sometimes the Mace is a little low in protein so the Yipti helps boost the protein enough to make the Hard stack.

"Overall we averaged 1.7t/ha on the wheat because the frost-prone areas didn't get wiped out."

Wes also is focusing on precision farming strategies like sowing into the previous crop's rows.

"There are a few things we are trying to achieve to become more efficient," he said. "The bottom line will be for us to justify the expense."

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READER COMMENTS

CBH to Blame
29/01/2013 8:59:42 AM, on Farm Weekly

Wouldn't have had to sell if CBH committed to distibuting equity to its shareholders. What's worse is that farmers leaving the system now such as Wes Hall are denied any chance to take their CBH equity they worked hard to build. Wes should be getting a $2 cheque in the mail pretty soon. Disgraceful!
Cheque for $2
29/01/2013 10:03:39 AM, on Farm Weekly

I have received that humiliating $2 cheque upon leaving the farm. Didn't realise the importance of the equity I 'left' on the table, until the 2008 stockmarket crash took my retirement savings. Nothing more important than your family's economic future.
corporatise CBH
29/01/2013 4:23:17 PM, on Farm Weekly

Crazy these farmers who sell the farm don't realise they also walk away from their CBH equity. Hard to see the corporatisers getting 75% of a vote with the current board, but their lack of attention to the equity issue may serve a few surprises at the upcoming elections.
Drowning in Debt
1/02/2013 9:42:23 AM, on Farm Weekly

Doubt we'll ever see our equity in CBH! So our next best option is to sell the farm? Yeah that makes a lot of sense doesn't it? As a previous CBH supporter I am now ropable these directors aren't even talking about the issue.

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