Latest / Dollars In The Dirt / #022 - What Does Growing Your Farm Look Like Under Albanese

Transcript

#022 - What Does Growing Your Farm Look Like Under Albanese · Dollars In The Dirt

• 0:00
  Is it possible to grow your rural business under Albanese? The
• 0:03
  honest answer is yes, but not the way most farmers are trying to
• 0:06
  do it. Most people thinking that growing a farming business is
• 0:09
  just about the weather and commodity prices. The truth is under
• 0:13
  the current government it's about understanding a rising cost base,
• 0:17
  tightening environmental regulations and a banking system that's
• 0:21
  watching your ESG footprint more closely than ever. After
• 0:24
  helping hundreds of farmers secure over a billion dollars in
• 0:27
  finance, I can tell you that the best operators aren't complaining about
• 0:31
  the policy environment, they're building their business to thrive in
• 0:34
  it. So in this video, I'm going to show you exactly what
• 0:37
  that looks like. The four things that the smartest farmers are
• 0:40
  doing right now to keep growing, regardless of who's in
• 0:44
  Canberra. Welcome to Dollars in the Dirt. I'm Brecon Curtis, and
• 0:47
  this is where we break down the finance side of farming so you can grow
• 0:50
  your operation, buy that next property, and build real wealth.
• 0:54
  Let's get into it. The first thing you need to understand is that the cost base
• 0:58
  of a farm is rising. And it's not just inflation. Fuel,
• 1:02
  interest rates, and wages, they're all going up. But
• 1:05
  so is the cost of compliance. And you have to look at the environmental pressures
• 1:09
  being applied. Emissions controls, land clearing restrictions,
• 1:13
  tree clearing laws, and water regulations are all increasing
• 1:17
  the reporting expectations on your business. And here is the brutal truth.
• 1:21
  None of these items increase the profitability of your farming business. They're
• 1:24
  just pure cost. You have to factor these rising costs into
• 1:28
  your long-term budgets and not just hope they go away. I was recently
• 1:32
  talking to a client who runs a substantial cattle operation. He's
• 1:35
  just spent $50,000 on a consultant to map out
• 1:38
  their carbon footprint and ensure that they're compliant with
• 1:41
  the new vegetation management laws. That's an extra $50,000 he
• 1:46
  didn't produce a single extra calf or add a single dollar
• 1:50
  to their bottom line. It was pure compliance costs. If
• 1:53
  you're budgeting for expansion, you have to factor into these hidden costs
• 1:57
  of your business on the current policy direction. If
• 2:00
  you don't, your cashflow projections will be completely wrong, and
• 2:04
  the bank will see through them immediately. The banks also want to understand the
• 2:07
  climate risks, and that leads us to the next point. The banks are watching.
• 2:11
  They want to know how farmers are dealing with the climate risks, ESG considerations,
• 2:15
  and sustainability. If you're ignoring these policies, the
• 2:19
  bank will see you as potentially a higher risk. To
• 2:23
  grow in this environment, you need to be financially sharper than
• 2:26
  ever. You have to understand the policy direction and not ignore
• 2:30
  it. You have to build flexibility in your business to adapt.
• 2:33
  And the banks are increasingly looking for borrowers who are proactive about
• 2:37
  managing these risks and not just reacting to them. The major banks
• 2:40
  are now required to report on the climate risk of their loan portfolios. And
• 2:44
  that means they're looking at farms through an ESG lens.
• 2:48
  I've seen loan applications delayed because the farmer couldn't articulate their
• 2:52
  strategy for managing drought risk or using their plan
• 2:55
  for sustainable land use. The banks aren't looking at
• 2:59
  your profit and loss statement anymore. They're looking at your environmental footprint.
• 3:03
  If you can show them that you're ahead of the curve, you become a
• 3:06
  much more attractive borrower. And if you ignore it, you
• 3:10
  potentially become a liability. Just quickly, if you're tired
• 3:13
  of explaining your operation to a new bank manager every year, only
• 3:16
  to get a one-size-fits-all deal that doesn't fit your business, we
• 3:20
  can help. At Season Finance, we do things differently. We've got over
• 3:23
  70 years of combined experience in agricultural lending, and we
• 3:27
  work for you, not the banks. We're the consistent expert team in
• 3:30
  your corner fighting to get the finance that actually helps you grow, purchase
• 3:34
  the next property and build your legacy. Don't leave money on the table. If
• 3:38
  you're looking at your next move or just want a second opinion on your current setup, click
• 3:41
  the link in the show notes to book a confidential, no obligation chat
• 3:45
  with the team and we'll show you what's possible. Righto guys, now back
• 3:48
  to the episode. Once you understand the pressures, you have to look at how the
• 3:51
  best operators are responding and they are building strong cash
• 3:55
  buffers. They're structuring their debt for flexibility and not just
• 3:58
  chasing the lowest rate. They're focusing on efficiency and
• 4:01
  not just scale. And they're diversifying their income streams where
• 4:05
  possible. Most importantly, they're staying ahead of
• 4:08
  the compliance, not reacting late when the bank asks for
• 4:11
  a report they don't have. They're treating compliance as a
• 4:15
  core part of their business strategy and not an afterthought. Finally,
• 4:18
  you have to look at the positives. There is still a strong global demand for
• 4:21
  food and good operators are still highly profitable. Technology
• 4:26
  and efficiency gains are real, and there are premium markets for
• 4:29
  sustainable production. The opportunity is there, but
• 4:33
  you have to be structured correctly to take advantage of it, and you
• 4:36
  have to be able to demonstrate to the bank that you're a low-risk, high-return
• 4:40
  borrower, even in a challenging policy environment. Despite
• 4:44
  all the noise, Australian agriculture is still a powerhouse, and
• 4:47
  we produce some of the cleanest, highest-quality food
• 4:51
  in the world. and the global market is willing to pay
• 4:55
  a premium for it. The farmers who thrive over the next
• 4:58
  decade are the ones who will embrace the new reality, invest
• 5:02
  in efficiency, structure their finance to handle the volatility,
• 5:06
  and they don't complain about the government. They adapt their business model
• 5:10
  to succeed regardless of who's in power. So remember guys,
• 5:14
  don't let the political noise distract you from the financial reality.
• 5:18
  Understand the policy, build your buffers, and manage the
• 5:21
  risk. If you need help reviewing your current loan
• 5:24
  structure to make sure that you have the flexibility you need to grow under the
• 5:28
  current government, reach out to Season Finance and we can
• 5:31
  do the heavy lifting for you. Thanks guys, and we'll
• 5:34
  see you in the next episode. Thanks for tuning in to Dollars in the Dirt. If
• 5:37
  you've got value from today's episode, make sure to subscribe so
• 5:40
  you never miss the insights you need to grow your business. And if you're ready to stop
• 5:44
  being just another number to the banks, visit Season Finance via
• 5:47
  the link in the show notes. Remember to follow us on socials and catch