It has been a volatile year for grain farmers here in the Esperance region, and I think many growers will be looking forward to the end of harvest and hopefully some downtime over Christmas.

El Nino brought with it drier conditions this year, with reduced soil moisture and crop yields leading to reduced crop production volumes from the record highs of the 2022 harvest.

This year, the global economic slowdown became more pronounced due to high inflation, rising interest rates, and the global impacts of the Russia-Ukraine war, Europe’s energy crisis and China’s difficult economic recovery following COVID-19. On home soil, high input costs continued in 2023, and unseasonal weather brought with it a mediocre harvest for most.

In 2024 we’re expecting the trend of elevated farm input costs to continue. Multiple factors are driving the increase in production costs, namely: interest rates, the value of the $AUD, high energy prices and volatile global oil markets.

Although some project a recovery in demand and application rates of fertiliser next year, ultimately it comes down to growers procuring and securing fertiliser in the coming months.  Overall, the profit margins for growers continue to remain tight in 2024, and labour costs are set to remain high.

Export markets will continue to be volatile, as a result of the Russia-Ukraine war however, the improvement of trade relations with China provides Australia with a unique opportunity due to our close proximity as we move into the new year.

There is certainly a lot of uncertainty out there for farming families, as concerns about farm profitability overshadow the day-to-day running of the farm. Moving into 2024, never before have I felt so strongly about the importance of working with your close-knit team of professionals to ensure the business is sustainable and profitable.

Here are my recommendations for 2024:

1. Be sure to work with us, and your agronomist and banker to forecast your cashflow and assess your financial performance.
2. Set clear goals to improve your profitability whether by diversifying, reducing expenses, improving the efficiency of your production processes, tapping into new markets, or embracing AI, automation, and technological advancements.
3. Monitor your progress and check-in with your professional team regularly.
4. Be prepared for hiccups and challenges along the way and have a contingency plan in place to address any unexpected roadblocks.
5. Be sure to take the time each month, and each quarter, to evaluate and finetune your goals, reflect on what is and isn’t working, and adjust accordingly.
6. Finally, if you haven’t already, set aside the time this year to work on your Farm Succession Plan. If you need some guidance in getting started, please reach out.

If you have any questions in regards to any of the information in this article, please don’t hesitate to reach out via the form below.

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