A group of leading grain producers from across Australia has returned from a knowledge tour of America’s Midwest, visiting some of that country’s largest-scale farming operations on a fact-finding mission to learn from their US counterparts.
The two-week tour – comprising 41 growers from all major grain-growing regions of Australia – took in key aspects of the US grain-industry supply chain, covering the heart of the American Midwest grain belt through Missouri, Iowa, Minnesota, Wisconsin and Illinois.
Beginning in St Louis, the group covered some 3780 kilometres, visiting large soy, corn, beef, hog and dairy producers, as well as grain-processing operations, seed producers, machinery manufacturers, grain marketers and agri-chemical suppliers.
The first tour of its type – hosted by global specialist agribusiness bank Rabobank drawing on its local US client and industry networks – also took in John Deere’s global headquarters in Moline, America’s largest outdoor farming event the Farm Progress Show in Springfield and a visit to the floor of the iconic Chicago Board of Trade.
For New South Wales grain grower Stuart Hulme, who undertook the tour with his wife Leanne, it was his first time in the US Midwest and an “amazing experience”.
“To have access and see the types of properties and places that we went to was really exciting and something you’d never been able to do ‘under your own steam’. We were visiting farms that were in the top five or 10 per cent of the country’s producers so they had a decent amount of scale,” he said. “It was nothing to find farms that were growing 10,000, 20,000 or even 30,000 acres of soy or corn.
“And it is just such incredibly productive country – they’ve got the richest agricultural land. Even though they’ve got 10 times our population – 240 million people – to feed, their production capacity really is massive.”
The availability of water was another big eye opener for Mr Hulme, who with his wife runs a 666-hectare mixed farming operation (including wheat, canola and faba beans) near Holbrook, on the state’s south-west slopes.
“You think all the soy beans and corn in the US mid-west are under irrigation, but it’s not,” he said. “It’s pretty much all dryland. It rains so much there, that they in fact have more of an issue with too much water – they spend quite a lot of money having to tile drain their country to keep water off it.”
But despite the differences, it was the similarities between the US farmers and their Australian counterparts which struck Mr Hulme the most.
“The thing I found was that even though we looked at those top US producers, we had pretty similar issues. It’s all about cost control. We can all be early innovators and take on all the new technology, but at the end of the day it is the cost-price squeeze that will put pressure on you no matter if you are farming here or there, and that includes the hidden costs like depreciation and interest on capital,” he said.
“That was brought home to us with some of the really big infrastructure projects we saw in the main corn belt – really big sets of silos and storage facilities, which had been built in better times four or five years ago when corn was up around US$7 a bushel, rather than US$3 a bushel as it is now. So they had the capacity to build them back then, but now they’ve got to work out ways of keeping costs down.”
Mr Hulme said the cooperative way that US farmers worked with each other was another significant learning from the tour.
“We saw some really good examples of farms having working relationships with each other that were really successful – farms that were outsourcing labour or equipment to other farms or having other partnerships with them,” he said. “We visited one big dairy operation with 11 farms and they had a relationship with another farm, which was geared up with the machinery specifically to grow all the fodder to supply one of the dairies.
“It seems that often the relationship building between the farms was almost more important than each individual business because they could see the value of working together.”
But Mr Hulme’s most powerful insight came from the messages the tour group received from their US industry counterparts about the future of farming and the importance of engaging with, and encouraging, the next generation of farmers.
“The farm population in the US has gone from 40 per cent of all Americans in the early twentieth century to two per cent today, which is pretty similar situation to here in Australia,” he said. “We heard from the Director of Millennial Engagement at Monsanto who had a great saying that the dirt falling off the shoes of all those people leaving the farm had created a huge mountain which is now the divide between farming people and the rest of the population who live in cities. There’s a real need to get back in contact with those people not directly associated with farming. And one of the most effective ways of doing this is involving millennials from farming families to communicate and connect us back with the mainstream population through social media, which is something millennials are so good at.”
Important too were messages from US farmers about the need to engage the ‘millennial’ generation in farming businesses and allow them to be involved in business decision- making – which have impacted the Hulmes’ own views on farm succession.
“This has actually made us look at re-thinking our strategy with the future of our farm,” Mr Hulme said. “As we don’t have any children ourselves, our plan had always been just to sell up and move on when we’d had enough of farming. But coming away from the tour, we’re now thinking there could be young people who want to get a start in farming and maybe it’s up to us to help them out with this in one way or another.”
Rabobank Australian rural manager Adam Tomlinson, who accompanied the grains tour group to the US and is preparing a report on its findings, said a number of useful learnings had come from the visit.
“In particular, we saw some amazing examples in the farming operations of supply-chain integration, of data usage and in soil health and management,” he said, “while the industry visits really brought home the developments that are now available in relation to technology and robotics in farming, as well as the importance of working on the perceptions of agriculture in the wider community.”
Mr Tomlinson said the US grains tour had proved such a success, future international tours were being planned by the bank for sectors including dairy, cotton, beef and sugar – tapping into Rabobank’s global networks and international knowledge of food and agriculture.
Rabobank Australia & New Zealand Group is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has nearly 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.
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Skye Ward
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