Over the past three years James Walker from Longreach, despite experiencing severe drought on his properties, has invested time, energy and resources into searching for solutions to the challenges facing family-sized livestock operations to remain profitable.
In that time he has harnessed wide-ranging business expertise both within and outside agriculture to identify problems and to find potential answers, through initiatives such as the Kidworth Case Study process and industry summits in Longreach, Brisbane and the United Kingdom.
So what did it all achieve?
Where many similar well-intentioned efforts in the past have started with lots of buzz and excitement but ultimately fizzled into non-events for various reasons, this process, perhaps because it has been driven by one passionate individual, has produced a very tangible and practical outcome.
James Walker has taken the learnings from the process to develop a unique and easy-to-use online tool for livestock producers to quickly and accurately understand their financial situation and to make fully informed decisions for the future.
“The biggest problem for the beef industry is producers and their families not having time to calculate their current financial situation and project their future,” James said.
“The issue is complex tax accounting, with spreadsheets, ratios that many farmers don’t understand nor can communicate with their families or advisors.
“This creates confusion that impacts growth, expansion, decision making and long term viability.”
So he quickly identified that the solution to the problem was to develop a convenient and simple to use tool that farmers could use to instantly understand their immediate financial situation, and to help them to make informed decisions about debt management, capital improvements and when to buy or sell stock etc.
This is a tool with a difference:
- It is simple and easy to use: Any member of the family can use it. A simple step-by-step process guides the producer through the step of inputting the basic information that is needed to develop a complete (and bank-ready) financial picture of their operation. It takes the drudgery out of putting financial information together, and does all the spreadsheet formula calculations required behind the scenes.
- It is instant: It typically takes less than 30 minutes for a producer to input all of the information they need to produce a comprehensive financial report of their business. They can then instantly generate reports at any time in the future with the kind of detail that may currently take weeks for off-farm advisors to prepare and send back.
- It is integrated with big data: This is why it is comparable to a report that may take consultants weeks to prepare. The site is linked directly to MLA NLRS online market data and to the extensive online databases of the Australian Bureau of Statistics and ABARES. As a result, when a producer punches in the details of each mob of livestock they run, and their weights and growth rates, the report tells them exactly what each mob is worth on that day’s market, based on the most recent sales in their area. Equally, the report tells them exactly how their farm’s financial performance compares to other farms both in their area and nationally, drawing on current ABS and ABARES data.
- It automatically values your herd: In addition to valuing all livestock accurately based on actual recent market sales, it will also incorporate other relevant information such as the effect of premiums likely through PCAS, EU, MSA, or organic accreditations.
- It is bank-ready: It can generate an instant report at any time for discussions with the bank, consultant, or any other stakeholder who requires such information.
- It helps to make fully informed decisions: The tool allows producers to consider the impact of hypotheticals on their future financial position and cash flow etc. For example, instant cost-benefit analysis of selling cattle now versus holding them on to add more kilograms; how expenditure on capital development or off-farm investment or paying down debt will impact the financials etc; how bringing a son or daughter into the business will affect cash flow.
- It factors in practical, real world costs: It keeps track of key dates coming up such as school fees. Many producers, particularly in the beef industry, have to send their children away for boarding, so the payment of school fees becomes a key decision driver in terms of the need to generate cash flow and to sell stock.
“We have created a program that does all the excel work for the farmer, so the farmer doesn’t have to worry about formulas or anything like that. They don’t have to look at a spreadsheet again,” James said.
Applications producers can use the program for include:
- Gaining clear understanding of business quickly
- Real-time valuations of their herd;
- Calculating their equity position;
- Generating historical property growth figures;
- Profiling market premiums;
- Calculating Superannuation;
- Creating family milestones for succession;
- Determining cash flow, factoring in personal and business goals;
- Generating bank ready documents;
- Showing farm performance without using excel spreadsheets.
One of the most fascinating features is that the instant reports also show each producer how many people the production from their farm feeds – again based on ABS and ABARES data.
James said Agrihive has invested with partners over $500,000 in the project, with contributions from the Department of Agriculture, MLA and some angel investors that are eager to see the Australian beef industry and farming sector prosper.
“We believe this program has the potential to save most beef farms between $20,000 and $40,000 each per year. The reason being I have personally already run through this process.”
He said the program was aimed at helping Australia’s 70,000 beef producers to improve their business skills and take control of their beef enterprises, through accessibility to an online tool that allows them to input and make decisions on their own financial and personal data.
He has currently developed a Beta version that is now 80pc complete, and wants beef producers to trial the software and provide feedback, which will shape the remaining 20pc of the program’s development.
“We are entirely customising it to the grass level producer because ultimately they own the data.
“A panel of industry experts that have helped with the development say this is the first time a farmer can input, access and manipulate clear, concise, accurate and timely business information that ultimately builds a wealth report with future projections and scenarios based on their current situations.
“It means farmers will have the best data set available to make decisions about the operation of their own businesses; instantly in one spot that is private and they own.
“Enhancing access to financial information and through that improving decision-making is essential, particularly in times of business stress – such as during drought, floods or shocks such as live export bans. This is not only about defending the beef industry but taking control and building wealth.”
James said his business Agrihive has partnered with a fintech firm Avantek and Tim Woodhouse who are both currently in discussions with other industries and investors to join the “food and farming ecosystem”, which was developed to improve profits behind the farm gate and enhance supply chain efficiencies, he said.
“At the core of this vision is making farmers more profitable so as a nation of farmers we can build and expand through robust and profitable family businesses.”
A limited number of opportunities exist for producers to trial the Agrihive Beef Wealth Projector for a 30 days free and step through the program – to register visit www.agrihive.com
See video below for more details on the Agri Wealth Projector: