Monthly Archives: March 2017

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Who’s business is it anyway?

A week or so ago, I had a surprising – and a little disappointing – discussion with a friend of mine in relation to our farm business and my family’s life in general.  And the discussion got me thinking about all the people that feel they have an opinion on our businesses, our lives and our reputations.  Especially when the offer to comment back is not reciprocal.

I am launching into divulging aspects of my farm business and life that really – and I shouldn’t have to say it, but I will – is of NOBODY’S BUSINESS BUT MINE AND MY FAMILY’S.  But for the sake of this post, to shed light on the conversation and to also give a perspective on my thinking process about all of this, I will let you in on things.

Let me begin at the conversation and work backwards.

The comment was put to me that due to a comment of mine on Facebook over one of the weekends about doing some hand drawn plans for a house extension, and the fact that Mark and I took the kids down to Apollo Bay for 10 days in January, that people have said that we were whinging about not being able to pay bills, but now we can afford to take holidays and build a house.

Wow!  Sounds like we are travelling overseas for extended leave and building a mansion.

Not that any of these people have ever said anything to my face.  EVER.  (Feel free to do so by the way….I would love to hear you tell me about how I am hypocritical about money).

There has long been a firmly held – but incorrect belief – that landholders and primary producers are “rolling in money”.  This belief I should say, is held by extended family members as well, not just by public.  However, for anyone that has been involved in agriculture to a reasonable degree, will know that the reality is not further from the truth.  True, our assets and the things we own are worth quite a bit of money, but assets do not equate high income.  In fact, the opposite is almost true for agriculture.

Think I’m stretching the truth?  Well how about some facts and figures.

It is common knowledge that in April last year, two of the biggest milk processors announced (for different reasons) that they were going to average the milk price to $5/kgMS (milk solids).  Dairy farmers do not get paid in c/litre like the public buys it.  So I imagine that $5/kgMS sounds pretty impressive.  Except for the fact that it is UNDER THE COST OF PRODUCTION for many dairy businesses.  In other words, we were – and still are – being paid less for our milk than what we can make it for.  Many half enlightened do gooders helpfully suggested that farmers just stop milking.  After all, the processors need the milk, so if we turned off the tap so to speak, then they would have to pay us a higher price.  Ummm….no.  That’s not how it works.

Dairy cows, like many agricultural animals, cannot simply “turn off production” like turing off the aforementioned tap.  The timing of the price drop also meant that a large proportion of the southern dairy farmers were caught in their peak milk period (i.e., the time of year that they produce the most amount of milk).  Stopping production was not something we could do.  In addition to this, if enough dairy farmers cease producing milk and the total amounts falls to a certain level, then there actually is legislation that can force dairy farmers to milk cows.  Did you know that?

So in May and June, in a bid to even out the year’s price to an average of $5/kgMS, the processors actually dropped the price to $1.80 ish/kgMS.  This effectively gave us a negative cash balance for those 2 months.  This is the TRUE part.  Families COULDN’T AFFORD FEED THEIR FAMILIES MUCH LESS RUN THE FARMS.  But as I mentioned above, we still had to milk.  And feed cows.  And buy fuel.  And purchase chemicals.  And run the farm like nothing had ever happened to the milk price.  Oh, and we still had to feed our kids, pay school fees, daycare and kinder fees and continue on like normal for our kids, like the stress of the world was not on our shoulders.

As an example, for our May milk (paid in June) we received just over $10,000.  The day my milk payment arrived, I opened up 2 bills from Barwon Water.  Each of them was over $5,000.  So the water bills alone used up my monthly money.  And I still had to feed cows, purchase dairy supplies, pay staff (’cause they don’t work for free!), pay fuel and and that point in time, was paying for seed that we needed 2 months earlier because tunnel moth and red legged earth mite destroyed 3/4 of the pastures on our farm.

Sounds exciting and so lucrative doesn’t it?

In order to get through those 2 months, most of the autumn calving farmers were forced to take a loan with their respective milk processors.  These loans were paid to us to bring us back up to a $5/kgMS for May and June milk, BUT the kicker was…..we have to pay that back with INTEREST.  Even though we were backed into a corner to take it in the first place, by the result of mismanagement that had NOTHING to do with us.

This is a simplistic view of the situation, however, comments from outsiders on how we use our money are also simplistic in nature too.  Just keeping it all on an even keel here.

Taking holidays.  Ok.  When Tom (who is 11yo) was a baby, Mark and I went away and stayed in a self contained house for a couple of days for a break from the farm.  It was at that point that we realised that we could not afford to take holidays in motels/hotels/resorts anymore.  We needed at least 2 rooms and that hiked the price up substantially.  So when Biddy (now 9yo) was a baby, we purchased a caravan and that is what we take holidays in.  We go to low cost places, where the kids can entertain themselves and we cook our own meals most of the time.  For a family of 6, our 10 day holiday in Apollo Bay works out to be cheaper than some of my friends who have smaller families but go to Melbourne or Sydney for the weekend. (Oh and I should say that we holiday in Apollo Bay because it is close enough to the farm, that if anything needs doing, we are close enough to nick back).

The tone of the comment – and others before – have been that we must have it pretty good if we can go away for 10 days, 2 weeks or even a month (every 3rd year) at a time.  Just another comment that gets me riled a bit.  Those that are working in paid employment enjoy their time off.  Whether that be on a traditional weekend (Sat/Sun) or whether it is over the school holidays, or whether it be during the week.  There are very few people who as employees get NO time off at all (and if you think you are getting no time off, then your employer is probably pulling a swift one on you, because by law, you are entitled to regular time off).  Not so for us.  Each YEAR, we get one 10 day break and one 2 week break to spend time together as a family away from the farm.  That is it.  We don’t get weekends off, or every school holidays, or even public holidays.  If we want to spend time as a family, then we all trudge up the paddock and help out with the tasks.  Just to spend time together.

In a year, there are roughly 96 weekend days, 12 public holidays and 4 weeks leave.  There is also sick leave for those that take it and use it as holiday (yes, as employers we know people do this).  So for the average worker, there are about 128 days that you are free to spend as you will.  With your family if you wish, or working on your projects, or sprucing up your house, or taking a holiday.  If I added in a few more days over the course of the year on top of our annual holidays, then we spend 30 days away from the farm as a family.  That means the average Joe has about 100 MORE HOLIDAY DAYS than us, and 1/3 of that is PAID LEAVE.  Ironically, when we take leave, we have to not only pay for the holiday or break we are taking, but we also have to PAY FOR STAFF TO BACKFILL our jobs.  So we pay twice.

Again, sounds great hey?

Many studies have been done that show that everyone needs leave.  Everyone needs downtime.  So why shouldn’t dairy farmers?  Why, when we take leave, people look askew at us and assume that we are either rolling in it, or hypocritical about our spending habits?

Finally, the house extension.  This is an easy one.  How many people buy a house with cash?  How many renovate their homes with cash? I’m guessing not very many and of those that do, it would be in the extremely low percentages.  So if “normal” people are taking loans to do this major stuff, why wouldn’t people assume that dairy farmers do the same thing?  The money to renovate doesn’t grow on a money tree out the back.  We will have to borrow it like anyone else.  And pay it back with interest.  Like anyone else.  Should farmers have to live in standards of housing below anyone else in the community?  Why can we not improve our lifestyle and farm assets?

Some may comment and say that it is hard luck for us, and we chose to be dairy farmers and so, by extension, we should just learn to live with the short vacation times, houses that our families have stretched to beyond capacity and the milk price fluctuations.  Yes, in part, that is true.  But what we shouldn’t have to do is JUSTIFY ourselves and the way we operate our businesses and family lives to people that have no idea about what we have to go through.

What I ask is this; THINK about what you say before you say it.  Perception is not always the reality.  If you are not prepared to have a microscope placed on you, your business and finances, don’t do it to us.  If you want to be educated about the issues facing the dairy industry and how they affect our lives, ask us.  Don’t gossip behind our backs.

So I ask again…..who’s business is it?  Who’s business is it to question what we do in regards to our business.  The answer is, no-one outside the business.