Who wants to be a crop farmer?

Not many young folks want to be farmers, especially wheat farmers.

Although susceptible to the ebbs and flows of markets, livestock and grain prices have been rising lately and the positive case (especially for soft commodities) remains intact with the simple understanding that food demand is rising while supply flounders.

There is another supply and demand story – the world is not producing as many farmers as it once did, yet we probably need more farmers than ever before. Kids don’t grow up wishing to herd cattle or harvest fields.

Instead of opening a retail shop, paying $100,000 of rent, hiring 4 staff members, spending money on branding and websites and then buying $40,000 of inventory (I hope it’s not perishable) and try to sell your wares amongst the competition of the other 40 shops on your strip – For a similar amount, you could buy seed, fertiliser, lease a 3,000 acre (avg. plot is about 20,000 acres) wheat farm and some equipment and reap larger margins!!

If your average yield is 1.3 tons of wheat per acre, you reap 4,000 tons of wheat from your farm – selling price is $330 per ton less sowing, harvesting and labour costs of $180 per ton = $150 * 4,000 tons = $600,000.

There is always a market for your product or alternatively you can hedge your crop with a future delivery contract or store it in a silo to be sold at a later date.

Unlike ugg boots, stretch jeans or the Collingwood Football Club – Wheat never goes out of style.

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