It’s all about family, but every spare dollar goes to the farm

Blog Post(5)

Does this lament sound familiar? Whilst the day to day living costs of the farm family are met, any larger amounts of money that could be redirected to holidays, improvements to the home, investment purposes etc are always spent on the farm. Sometimes the conflict is between two people in a relationship which can be hard. Sometimes all the people are on the same page, however struggling with two competing priorities within the overall objective of living a good life and running a profitable and productive farming business.

We all learn about lifecycles as infants. Frog’s eggs hatch into tadpoles, they grow into frogs and then have little eggs of their own, old frogs die. Farm businesses and farm families have lifecycles too. What often causes most pressure around the competition for cash between farm businesses and farm families, is that often they are in peak growth stage at the same time. The couple of decades spent raising children are generally when the farmers are young, fit and energised and looking to grow farms in either scale, scope or profitability. With one partner often working lower hours over this period to raise children and the additional costs of food, entertainment and education means that this is also the most expensive stage a family goes through, especially if you have quite a few little tadpoles, as farming families often do.

So how do we find the happy balance between long term investments in our farming business and long-term investments in our families and in the process, enjoy more harmonious relationships because we are working together toward what we want?

Values alignment
Hopefully you have similar values to the person you are sharing your life with, if not having alignment in values, or values that don’t necessarily contradict is a really important start. Understanding the choices people make us sometimes easier when we understand their values. You can find some online resources from Brene Brown Here This online values test is quick and easy. and can be fun to work through as a couple or family group. Checking in with our values when we make decisions helps us make decisions, we are happy with in the short and long term.

Get solid on the shared goals

A really important step is to get some goals written down. It’s really confronting for a lot of people, however writing goals down is really helpful, it keeps us honest and accountable. When we are goal setting as a couple or family, writing them down is the best way to ensure that you have been understood and you understand what others want. Goals change, and that’s ok. Try working toward a set of 10 year goals, and revisit them every year or so.

Understand the profit drivers
These really vary from industry to industry, however generally speaking, in livestock enterprises the focus needs to be on stocking rates and fertility, and in cropping enterprises, on low-cost production of tonnes at scale. How this is achieved might look different on one farm to another, however understanding the return on investment from machinery and infrastructure upgrades is such an essential part of good business management. So what am I saying? Basically, before you spent 50k, 80k, 300k, 500k or a million dollars on machinery and infrastructure upgrades, have a pretty solid understanding (that is numbers on paper) about how its going to impact on your profit drivers.

Understand the relatively small impact of some desirable family spending on farm profitability
Let’s face it, the dollars are big in agriculture. When contemplating some discretionary spending for non-farm related goals, think about it in relation to your largest variable cost. What does this amount to as a percentage of your fertiliser or fodder cost over a few years?

Make your marriage a priority
If you are one of those couples where the farm always takes precedence over the needs of the family, think about the long-term impact of your desires always coming second to those of someone else. If you have read this far, its probably not you, unless someone forward you this article, and then you might need to sing a Taylor Swits Anti-Hero to yourself.

Think about succession
Oh we hear a lot about this old chestnut. We hear a lot about the families that have a successor and are trying to make it work. We don’t hear much from the families who had no one willing or eager to take the farm on, but there is often a lot of sadness there too. If we want our children to be interested in a career in farming, we have to make the lifestyle of farming not entirely constructed of hard work and deprivation. There have to be holidays and lovely shared family times. The stories we tell about farm finance need to be well thought out with a view to teaching financial literacy, rather than just frugal practice.  We need to abstain from telling children unnecessary stories about financially difficulties especially in households where income and wealth in all relative terms are on par with or greater than most of their school aged peers.

Understand the timelines
Whilst we can slow down the growth cycle of the farm business and catch up later, we cannot slow down the growth cycle of the farming family. Kids grow up fast. Opportunities for shared family holidays don’t end when our children leave school, but you may find that there is a gap from about 16-30 when they want to accompany you on the cheap ones. We all know families who have built the big house or undertaken the renovation to give all of their children more room, after they have all left home. Sad too are the stories of those who would have loved to travel but their health left before they did.

Investing in our farms is important and early business growth is important but remember, in the end all the old frogs die and they don’t get to take their tractors with them.

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