Property

As rural property values soar, how do young people get a start?

James Nason 04/10/2022

With rural land values at all-time highs, how do young people, particularly those without an existing family farming business behind them, get a start in the market?

It is a question that has echoed down through the ages, but one which has come into even sharper focus following eight years of continued growth in farmland prices. Rabobank recently reported tht 2021 and 2022 alone have seen successive jumps of 27pc and 25pc.

Three experts with decades of hands-on experience in the rural property market were asked by AgForce CEO Mike Guerin at a Rural Press Club of Queensland lunch in Brisbane last week for their views on how young people should be seeking to get a start in agriculture, if they did not have a family farm or succession process behind them.

Peter Hughes, who with his wife Jane and family has built one of Australia’s largest grazing enterprises, said it still came down to the old story of patience and building and knowledge and experience first.

“I know as long as I have been around there has always been this cry, ‘how do young people get involved and get into it’,” he said.

“Well first of all, they have got to get the experience.”

Just as he would “not fare too well” if put in charge of a large grain growing operation – “I wouldn’t know where to start” – people who wanted to get a start in the livestock industry had to work hard first and learn the ropes.

“And stay on one place more than a few months,” he said.

“You have got to go on a place and stay at least two years on one place, and then you can hold your own anywhere.

“It doesn’t matter whether it is badly run, or well run, or whatever it is, you have got to go through the politics and the pain and agony and everyone who is not pulling their weight – whatever upsets them – they have got to go through that and that is where they get the experience.

“Young people have been doing that forever and they have got to be able to keep doing it.

“If you lay out a golden path for them to go in and take a place over, it is the first disaster. You really will kill them.

“I might sound a bit hard but that is the way it has worked in the past.”

Rural property specialist Danny Thomas from LAWD offered similar straight-talking advice.

“It is the same as it has been the last 100 years,” he said.

“You have got to pay your dues. If want to be a cattle farmer you go and buy some cattle, lease some country, share farm, you build your assets, you keep investing in your assets and yourself over time, and then you find the right block and you buy the bloody thing.

“And you take a great a big mouthful and chew like buggery and if you’re any good you’ll make it.”

Also on the panel was Brendan Egan from the Queensland Rural and Industry Development Authority, which specialises in helping new entrants in the rural property market.

Mr Egan said he believed there were still many pathways into agriculture that did not require a family connection.

“We have supported a young couple for instance up in the (Qld) Gulf who are leasing country, and we’ve helped them invest in more breeding country.

“They are gradually building up their breeding herd and one day maybe they will be in the right position to purchase their own land.

“It might be the end goal, but there are a number of goals that they are trying to achieve along the way, and I think that is really important, there isn’t just one pathway, there is a number of pathways.

“At QRIDA we talk about the people and the plan, and we very much like to invest in people with that vision and to really use the village of people that are around them, the experienced neighbours and mentors in and around their industry.”

“Even at the smaller end we encourage them to lean into the professional network around them – the accountants, the lawyers, the business planning.”

A key was for people to get their plan “out of their heads” and into physical form and then to work with the people around them to achieve their goals.

  • More from the Rural Press Club of Queensland lunch to come: Why buy at the peak of the market, and where to next for rural property values?

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Comments

  1. Allan Morgan, 09/10/2022

    Corporations have endless money to out bit or out price younger people.using bank finance to buy farm land its just un productive soils which require higher cost to farm that land will be left to the young dreamers ,who will think they can make a go of it .wasting the good years buying second hand gear trying to make it profitable in the good seasons ,two bad seasons in a row mosts fail here some will fail even after one bad or even average year ,the costs are too close to the profits enter the corporations ,entering the farming area getting no ,or low interest loans bringing in the latest farming gear ,how can they not make it profitable ,they then just buy the next door property ,thus increasing the cost of the lands .my advice to the young people who want to go into farming is ,you need the correct capital ,the correct tools of trade ,to be a reliable operation which can take full advantage of the good seasons thus preparing your financials for the years of loss Work in the mines thats where the big dollars are ,no farm labouring job even comes close to this kind of hourly rate ,get the money together first to buy the tools of trade .study ,gain ,understand the land ,understand the costs with types of soils weather patterns ..,keeping in mind its a lifestyle your going in for .

  2. Murray Smith, 06/10/2022

    When I started the interest rate got to 21 percent fortunately not on a big amount of money ,cows and calves were about $45& good bullocks about $75 don’t know how we managed to make it?

  3. Graham johns, 04/10/2022

    From reading this i don’t think that Peter Hughes or Danny Thomas have quite grasped the problem. Yes they are good ideas that have worked in the past but the problem is that they won’t work again until property prices become realistic again. If you work in the pastoral industry as a ringer, contractor, manager etc. you will not earn enough in your lifetime to put down a deposit on a place and you can’t just walk into a lease opportunity without a good off farm income behind you which will leave you time poor.

    • Will Robinson, 05/10/2022

      Ongoing modelling of ruminant production systems appears to indicate that using grazing land as a maintenance only component of the stock diet, but linking production nutrition to bought in and brought in high energy feeds can reduce the amount of land required. Graham’s analysis appears valid and in the current climate – high energy feeds can scale up a smaller property, reduce risk, and increase gross sales to cover overheads. Feedlots do not run huge tracts of land? Currently it also appears that goat and sheep brute sheer productivity may have to be the initial business – if twinning can be achieved from good nutrition. Dorpers and Goats appear to be prolific breeders to drive gross income.

      • What Graham johns said is a valid point. The problem with feedloting to obtain ‘sheer productivity’ is that you will have considerable overhead variable costs which will require off farm income resulting in leaving you time poor.

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