Farm business success is driven and governed by a common set of high performance traits.
Return on capital over three years (2012/13-2014/15) for Australian grain farms in the top 25% was twice that of the average performers.
So, what makes these farms special? Numerous studies have been undertaken using real farm data and the same traits always emerge.
The golden traits in high-performing farm businesses revolve around people, productivity and profit and include:
- Passionate about farming
- Understand profit drivers
- Financially aware
- Excellent risk managers
- Organised and timely
- Technically strong producers
- Flexible and adaptable
- Good with people
What does this mean for you?
Contemplating investing in agriculture or consulting to investors?
Farm investment is more than selecting the asset or the enterprise. If your investment case is based on “top 25%” returns, exemplary management is required.
Simple maths tells us that only 1 in 4 farm businesses are returning at that level.
The golden traits show that high performance requires technical understanding of the production and profit drivers and good people to manage the asset and the operating business. Think Agri provides technical awareness programs for non-technical ag executives and directors programs. Armed with Think Agri technical knowledge, you’ll know the right questions to ask to ensure your farming investment reaches its true potential.
Looking to grow your existing farm business?
Existing farm businesses can always improve. There is plenty of room for upside regardless of what mother nature dishes up. Your decisions can impact more on your success than your circumstances. Think Agri farm business coaching can help you combine people productivity and profits to optimise your returns and manage risk.
Like to know more?
References
Thompson, T (2015). Australian grains Financial performance of grain producing farms, 2012–13 to 2014–15. Research by the Australian Bureau of Agricultural and Resource Economics and Sciences Research report 15. 3 June 2015
Hunt, E (2010). Improving farmer capacity to manage profitability and risk. BCG 2010 Season Research Results. Birchip Cropping Group.
Kingwell, R, Anderson, L, Islam, N, Xayavong, V, Wardell-Johnson, A. Feldman, D and Speijers, J. (2013). Broadacre farmers adapting to a changing climate. Final Report to National Climate Change Adaptation Research Facility, Gold Coast.
http://www.nccarf.edu.au/publications/broadacre-farmers-adapting-changing-climate
Malcolm, B (2010). Pursuing growth without regret in risky crop farming. Department of Agriculture, The University of Melbourne.