Doesn't seem to make sense on the surface of it.
Worlds fifth largest land area and the least densely populated.
It's primarily about Economics.
Factors include lack of water, infrastructure costs, having a small
industrial base, employment opportunities.
There are only two main industries of any size outside the cities, both
export based. Mining and agriculture. Mining, by it's very nature, is a
short-term proposition. Market forces or depletion of ore bodies can cause
them to shut down at any time. Towns that rely solely on mining become ghost
towns, virtually overnight. Although in previous years, government and
industry have tried building towns near the mining areas, they almost always
end up being abandoned in the end. Kalgoorlie is one mining town that has
survived long term, but has been through many severe cycles. In the 90's,
during a severe dowturn in mining, I bought a house in kalgoorlie for
$15,000. There were hundreds of houses for sale, very few opportunities for
employment. Shortly after, gold started to move again, mines reopened,
housing prices soared. I sold within 4 years for $160,000. Timing is
everything. : )
Agriculture has had to implement economies of scale to survive. That means
expansion of land area. My grandfather had 3000 acres that supported two
families and as many as 20 full time employees. Over the years, succeeding
generations have bought out the neighbors to maintain viable size. Today,
that family farm comprises 20,000 acres, supporting one family and one full
time worker. Turns over millions. Can be quite profitable, yet three
droughts in a row could wipe them out financially. The associated towns are
losing population proportionately. A town that had three grocery stores 25
years ago, would now have one. Some country towns have resorted to
entreprenueurial schemes to encourage population growth. Giving land away
for free, if you undertake to build on it. Also, building commercial
premises and leasing them to small business operaters for low rents. All to
Climate. If it isn't viable to live in the country side, then the natural
choice is close to the sea and in an area with an mild climate. 80% of us
live within 60 miles of the coastline and clustered aroung the major cities.
The US demographics (particularly agricultural in the mid-section) on a
much smaller scale w/ the coastal bias somewhat more pronounced. I've
not looked it up but surely a very sizable proportion of US population
is within a short distance of the shorelines.
For ag, _much_ higher input costs and only marginally higher commodity
prices means either expand both size of operation and equipment to
increase productivity or fail. The High Plains in the US are also
similar in that are in the "iffy" rainfall areas so dryland farming is
always a gamble even more than just the usual fluctuations of weather in
those areas that have higher normal precipitation levels. (I know that
well; our average annual is roughly 18" and we've been thru about five
years of well below while just 100 miles or so east they've been drowned
the last two. While we're ok again for just now, W TX and some other
areas south are still hurting while cornbelt guys can't get in to get it
out or if are may be cutting up to 30% moisture. We've still got corn
and milo standing that isn't ready yet because we've barely had a really
killing freeze and they're now talking perhaps significant snow by
Sunday/Monday while it's 70-75F all this week. If it does indeed do
this to us, we'll still be trying to cut past the first of the year in
all likelihood. If it hammers them up north they'll probably never get
it all before it goes down. :( )
The trend to the suburban expansion as described is also the same--most
of the developments are single-developer so they have high incentive to
maximize number of lots on a given acreage, hence the eaves-touching
building. In the 50s/60s, folks were buying individual lots in
ones/twos or farm tracts and selling off a couple lots so before they
built their own in more affluent areas while the tract housing was much
smaller houses on probably similarly-sized lots as the current ones.
Escalation of development costs and population growth have probably made
this a totally universal trend in developed economies.
The family farm is in a 15 inch rainfall area. Used to be 50/50 wheat and
sheep. Now it's 90/10
Wool prices just don't show enough return any more. They've had two tough
years in a row, but survived, albeit without making a profit. This year,
they planted 16,000 acres to wheat and the season was *very very* good.
Yields will probabably vary between 40 to 55 bushels per acre. As a reward
for that, the FOB price at the closest port looks like being 30% less than
last year at current predictions. Last year's break even was around 30
bushels/acre at $335 /tonne delivered to port. This years costs have risen,
the current price is about $230/tonne So the proportion of production
required to meet costs has just risen dramatically. Break even is probably
in the order of 40 bushels per acre at those prices.
They've just started harvest, got my fingers crossed the weather gives them
a good run.
Our farmers suffer badly from perceptions of city dwellers. This year, city
folk will read of record production levels, see the huge gross returns,
(Should be in excess of $5 million for the family this year,) yet fail to
understand why we say that there is little or no money in farming!
I was trying to explain to a friend why the farm needed to invest in a new
combine to take the crop off. (A John Deere rotary, over half a million plus
the custom 42ft front.) He maintains it's just a tax dodge and all farmers
complain about everything to try and hide the fact that it's really a
license to print money. Sheesh!
What you describe is a mirror image of the situation here.
That's similar to roughly 100 miles west of us as move more and more
into the rain shadow of the Rocky Mtn's it gets drier every mile.
Them's remarkable yields over that much acreage--we'll get some like
that in good years but a 40 bu/A average would be pretty remarkable.
Let's see...230AUD/Mt works out to roughly $5.80/but US if I assume
about 8% exchange premium. HR#1 closed yesterday (KC cash) at
$4.75-4.80/bu and we lose almost $0.50/bu in transportation penalties
locally. Since we're in fall harvest at the present I didn't pay any
attention when at Equity yesterday what local wheat actually was; the KC
prices are what I heard on farmcast news this morning.
Again, no different here -- the city editorials are all about high food
prices when there's less than a quarter's worth of wheat in a pound of
bread even if wheat were $10/bu and it's only a little over half that to
the farmer so it's patently clear the cost to the consumer isn't in the
Also, I had just commented in another posting a day or two ago in a
thread on a new shop that the new corn head had sorta' taken the place
and was a little higher up on the priority list. I hear ya' on the new
machine; that'll have to wait.
We're small potatoes by those numbers--Dad didn't try to expand from
what we were when I was growing up since neither my brother nor I stayed
home. I came back after Dad passed away and since was reasonably
successful w/ engineering career all really have to do is not lose too
much but if were going to do more than that such as try to raise a
family w/ a decent living we'd have to grow significantly, too. If I
can pay production costs and have enough for the property taxes, etc.,
w/ a little left over I can survive. Couldn't put kids through school
or such, though, simply relying on the farm at this size.
As you say, cash flow may be sizable but ROI on production agriculture
would be better w/ almost any other use of the principal invested other
than perhaps burying it in the proverbial tin can in the back 40. :(
Several factors, first is this year the rainfall was above average and more
importantly, fell just at the right time and in the right quantities. Second
is the wheat varieties keep getting better and better. The plant breeders
are producing plants with yields that were not thought possible and seem
somehow to continue to do that.
The inputs are carefully controlled as well. Soil sampling is a necessary
part. Everything, including spraying and fertilising is custom applied
through GPS linked computer controlled equipment. It all gets downloaded to
a database and forms the basis for the following year as well.
An example is ryegrass control. At harvest, the GPS records the exact path
the combine takes. When the first rains occur prior to planting, the
emerging weeds are sprayed. Each nozzle on the boom spray is linked to a
computer that has the information from harvest of the combine path. It
applies the heaviest dose on the area where the combine left the windrow
containing most weed seeds in the prior harvest. Same principal applies to
seeding, - fertiliser rates are automatically adjusted according to last
seasons yields and soil analysis via GPS.
The next combine that is bought , which will probably need to be in 3 years
time, will also have full automatic control via GPS. No need for operator
input at all. It will steer itself, continually adjust threshing settings
and ground speed as well as controlling the cutting height of the front.
We'll probably see 60ft fronts by that stage. The operator will simply sit
there and monitor what is happening. I can see the day when even that will
How things change. It's all moved so quickly. (My last combine, - we call
them headers, - when I was contract harvesting, had a 22ft open front. 18ft
was considered by most at that time as being the maximum that an operator
could handle safely. That was less than 20 years ago!
I'm off to make some sawdust.
Ayup to all the above--excepting we call the platform a header and the
overall machine a combine.
I assume a lot of yours is white, not hard red? The whites here have
been "the coming thing" for it seems almost 20 years now but still the
combination of varietal problems and the extra handling for segregation
haven't had enough premium available to make them take off on a
widespread basis as yet.
We're about 50-50 wheat-milo on the dryland w/ some dryland corn
depending on the year. Run feeder heifers on wheat pasture and stalks
over winter (assuming it gets in early enough and have the rain to have
the pasture--just now getting ground covered this year as were too dry
until nearly end of September/mid-October to drill) and then move some
to our lots and sell rest off in spring before starting field work.
There was some 100-bu dryland corn around this year...Quite a lot of
Folks keep trying various alternatives for less water-requiring
things--there's a little cotton, sunflowers, have tried Jerusalem
artichokes, ... but nothing really has taken over for the old staples as
being economically viable. The current new idea is canola but until can
solve problems w/ shatter and high loss rates owing to the tiny seed
size it'll stay that as well...
But, as you say, production equipment is light years from what used to
be. We're running 24-32ft headers w/ the size of our operation and
ground; couldn't survive w/o the monitoring gear though both for input
control and output monitoring to tie the two together though even on our
acreage (we're about 2000, larger than average for the county when I
left high school, well under now of course).
OBTW, Mom and Dad did a K-State/USDA-sponsored visit w/ a
"people-to-people" type touring arrangement where visited quite a number
of farms/ranches in AUS and NZ back in the 80s. One of the families
returned a visit some years later here (altho was while I was
engineering in TN so I didn't meet 'em).
Oh...we have had a few Aussie basketball players over the years at the
local community college, though, which has always been entertaining.
The latest is now a senior on the womens' team at Oklahoma
State/Stillwater having finished her second year here in '06-07.
I'm still trapped in suburbia where we have the schools that will make
SWMBO happy, at least until the kids have all flown the nest. As such,
I consider myself lucky to have a THREE car garage (where no cars are
allowed, or even lawn equipment; I have a back yard shed for that) and I
have 540 square feet at my disposal. I'd love to have a lot more, but
it's proven sufficient for the time being.
Any given amount of traffic flow, no matter how
sparse, will expand to fill all available lanes.
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