Farming an investment strategy

Most farmers wouldn’t want Matthew Barton’s 20-year-old Versatile tractor, or the visual messiness of his pasture cropping system, but they might envy his return on investment.

And that’s the point.

Take away land values, says Mr Barton, and many farming enterprises are either making a negligible return on investment or are quietly losing money.

Mr Barton, a former corporate treasurer with Aztec Mining, wants a low-risk farming system that delivers a return on investment (ROI) not too divorced from what he might achieve through other investment strategies, while building up the ecological base of his central NSW farm.

That’s led him into a low-input system of wall-to-wall winter cropping and strategic grazing on “Baragonumbel”, the 1200 hectare family property he took up with wife Kylie in the late 1990s.

On average over the past decade, Mr Barton said, the cropping program has delivered him about seven per cent ROI, lifting to nine per cent when he brings in agisted stock.

A winter wheat crop costs him about $150 per hectare, all inclusive from seed to silo. At this rate, pulling off a modest crop of 2.5 tonnes per hectare adequately rewards his investment--even with wheat prices below $200/t.

He prefers not to talk of cropping success in terms of yield. Success, Mr Barton said, is 100 per cent ROI on crop investment: this year that means $350/ha.

For the whole farming business, he’s aiming for at least 10 per cent ROI--in a sector where ROI hovers around the three per cent mark.

Mr Barton’s financial acumen was helped by his accounting training, but his approach to farming started with Resource Consulting Services (RCS), a consultancy that has turned out a number of award-winning farmers.

RCS training emphasises the “triple bottom line”: the understanding that no enterprise is successful unless it simultaneously succeeds economically, ecologically and socially.

It also demands a rigorous focus on business costs. It is chiefly by slashing costs that Mr Barton has ramped up his ROI.

His 20-year-old Versatile 4WD and his similarly vintage sowing rig, newly equipped with BioAgtive exhaust-inject technology (see box) cost about $100,000 all-up.

He avoids staffing pressures by leisurely dry-sowing in autumn (“we’ve never had a failure with dry sowing”) directly into native grass pastures after using 400 millilitres of glyphosate to knock over emerging winter annuals.

(Summer annuals are on their way out by sowing, and he strives not to kill any perennial plant except lucerne, a legacy of the farm’s previous management.)

Not only do the natives not compete with the crop, in Mr Barton’s view: they actively support it by storing moisture around their root mass, preventing moisture from leaching down through the soil and maintaining an active soil microbe community.

Since he began pasture cropping a decade ago, solid fertiliser has been progressively phased out.

For the first four years, Mr Barton hedged his bets by maintaining a conventional cropping program on about a third of the property alongside the pasture cropping.

Crop yields from the two programs were line-ball, but the decisive moment came when Mr Barton began to drop fertiliser inputs.

On the pasture-cropped land, decreasing the fertiliser budget made no difference to yield. On conventionally-cropped soil, it did. The conventional program was dropped, never to return.

This year, solid fertilisers have been dropped altogether in favour of BioAgtive technology, which reputedly fertilises seed and soil using nitrogen, carbons and other nutrients contained in tractor exhaust.

It’s been the driest decade in the Wellington district’s 150 years of recorded history, yet Mr Barton said he has still made some gains.

His farm’s soils are recycling nutrient, promoting their own fertility and resilience, and Mr Barton said he now only needs to work about half the year on the farm--he works much of the other half as an RCS educator.

Financially, “Baragonumbel’s” returns haven’t yet matched those of the financial markets.

But that’s not the only metric of success, Mr Barton observed. “If we hadn’t done things the way we’ve done them, we’d be in desperate straits now,” he said. “If we were still here.”

* Matthew Barton is one of the speakers at the Resource Consulting Services 20th Anniversary International Conference, to be held in Brisbane on July 20. Tel. 0408 795 456 or visit www.rcs.com.au

Story and photo: Matthew Cawood, Rural Press