This farm business analysis was conducted on behalf of the Australian Exporters Company (AEXCO) to assess the financial and risk management benefits of including the Export Hay enterprise in farming systems in Australia. The two farming systems used for this analysis were located in South Australia and Western Australia.
The inclusion of the Export Hay in these farming systems helped manage business and agronomic risk in the following major areas:
Improved ‘Net Farm Profits’ and efficiencies, as measured by ‘Return on Assets Managed’.
Competitive gross margins when compared to grain production and sheep.
Economic balance to grain production as the financial performance had counter cyclical tenancies. For example, frost in spring resulted in poor grain production but tended not to impact on hay production.
Improved gross margin on poorer land than grain production and so improved economic performance for the whole business.
Agronomic benefits from a hay enterprise that assists with grain production by decreasing the cost of weed control.
Hay is often seen as a risk hedge, taking on new risk (marketing and spring rainfall) and trading off old risks (lack of spring rainfall and frost).
Improved management of soil moisture with a hay enterprise in the farming system.