The hidden power in the family farm

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Posted by Brendon Walsh on 7 June 2016

The hidden power of the family farm

We hear a lot about how young people have a much lower chance of getting started in sheep and beef farming and that buyouts by corporate/larger family farm entities is the most likely outcome for the low profit family farm.  But does this really have to be the case, or are we just reacting with those sentiments because that is how it has been up until now?

I find this way of thinking rife in the sheep and beef farming industry and not just among farmers.  Many industry product and service providers also react like this AFTER a series of low profit years “prove” that there is “not much money in farming.”  While this may hold true for some farmers, it doesn’t have to be the only way for those who want different outcomes.

Family farm businesses and the people that run them often have legacy connections to the farm. They are often passionate about being there, living life with space around them, providing for their families and caring for the land and stock.  Many times this hands down beats the connections that corporate entities have to the land (nothing against corporate entities at all – it is just that there are differences and they must be recognised).  Sometimes the only things forcing many family farm businesses to consider selling up and moving on is the lack of profitability they have endured for many years.  It “seems” like there is no money in farming and younger generations don’t want that legacy!

However, once farmers understand how to be profitable, and how to make it happen every year, those issues tend to melt away.  I have seen farming families fire up incredibly after being very unsure how to proceed, simply because they can now see a pathway forward. Generating profit doesn’t have be the elephant in the room and anyone can do it if they really want it badly enough.  Once that is understood and accepted, plenty of options for succession and continuation of the family business become available.  For great succession, the business must be profitable and then pathways such as leasing to own from parents, leasing from a trust and children progressively purchasing shares in a company structure (plus others), are real options.

That strong connection with the family legacy, the land and family strength is a huge power that can be harnessed for the betterment of those families, their communities, our industry and our country.  What a waste to see that power un-utilised, all because they don’t quite have the knowledge or the systems yet to be consistently profitable! Imagine that – selling up and moving on, all because of a lack of a system and some knowledge that is readily available!

Most sheep and beef farming businesses in NZ are owner operated and/or family businesses.  Around 80% of our pasture land is under sheep and beef farming to some degree.  The long term average Return on Investment from sheep and beef farms is around 2%.  The systems and knowledge to be consistently profitable are there but are not being utilised on any great scale. Can you not see the incredible opportunity we have in the NZ sheep and beef industry?

So, let’s get real about the legacy connections we have in our family farm businesses and harness that unique power, especially if the family want to continue the legacy.  It can be done and is being done.  If you and the other people in your family farming business really want better outcomes, see if you can answer these questions: If not now, when?  If not you, who?

If you are curious about how the GrowFARM® System can help sheep and beef farmers generate the profits they really want, contact me here.

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