Farm Efficiency and Strategic Business Planning With David Cornish

The agricultural trading sector faces challenges with volatile prices and increased government regulations. Our guest this week, David Cornish, explains how strategic planning is crucial to position your business to successfully navigate these issues. 

In the current environment, “We've seen businesses that were quite profitable or quite sustainable, even 12 months ago, now making a loss,” explains David. With high inflation, high-interest rates, potentially low capital appreciation and low commodity prices, David points out that it doesn’t make sense right now to purchase more land. Instead, investing within your boundary fence, rather than expanding it, is a better plan. 

David encourages business owners to take a hard look at where that on-farm investment is made. “Often what we have is that our costs have to increase, to increase our income. Here's our opportunity to go, no, we're not gonna let that happen. We're gonna have a look at everything that we spend our dollars on and say, can we do that better or do we need to do that?” 

David admits that thinking about strategy doesn't seem like an appealing task for anyone when there are plenty of other things to do on the farm. But he suggests that spending the time to identify those small 1% changes, that result in a thriving and resilient business, is worth it. 

“When we look at those incremental performances, and you listen to leading teams, one of the things they often talk about is this concept of ‘It's the one percenters that give you the big return’,” he explains. “It's those one or two percenters that add up to the 20 percenters that makes it worthwhile. And, for most of us, we are in a commodity industry, so let's manage what we can manage and control what we control.”

David and Ferg discuss how to decide what those small incremental improvements can be. It can be difficult to know what to cut out of a farming business when it is so complex. Is it saving money by buying fewer rams this year or reducing fertiliser? Is it spending money to save you time by putting in laneways? 

You’ll have to tune in to hear David's advice there! 

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