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Structuring your business and profits for generational transfer

Net asset value of family farms

The ‘typical’ broad acre family farm now has net farm assets of over $4 million. Net Asset Value is comprised of land, water, machinery and livestock less bank and machinery liabilities. Net Asset Value has tripled over the last twenty years due to a combination of farm expansion and rising land and water values.

Read more: Structuring your business and profits for generational transfer

Making and managing profits

Definition of profit

Profit is typically referred to as the financial gain measured annually. Financial profit can be summarised as the difference between the amount earned (income) and the amount spent (costs).

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Key decisions for asset growth

Net asset value of family farms

The ‘typical’ broad acre family farm now has a net asset value of near $5 million. Net asset value is comprised of land, water, machinery and livestock less bank and machinery liabilities. Net asset value has tripled over the last twenty years due to a combination of farm expansion and rising land and water values (Figure 1).

Read more: Key decisions for asset growth

A structured decision making approach to choosing and justifying the right sprayer

Take home messages

  • There are many variables to consider when choosing a sprayer and each will be weighted differently from business to business depending on the farming model (enterprise mix, farming system, typical rotation, spread of farming operations, etc.), the need or want to optimise efficiency, availability of labour and lifestyle decisions.
  • Before upgrading the machine there may be options to increase field and overall efficiency of existing machine.
  • First priority is for the machine to be ‘fit for purpose’.
  • The capital invested can be similar between a self-propel (SP) and a tow-behind outfit when aiming to match field capacity.
  • Alternative uses for the machine and the likelihood of spraying where higher clearance is required, are key cost-of- ownership drivers.
  • Tank size can sometimes be a trade-off against spraying speed.
  • Lifestyle considerations can affect the decision.

Read more: A structured decision making approach to choosing and justifying the right sprayer