Thread: Million Dollar Small Acreage Question

The money is in the middle.
Other then the producers costs of production, the marketing, wholesalers and retailers costs account for most of the retail price... the producer gets very little and subsequently needs the produce ever increasing quantities to maintain a decent wage/ROI.
e.g. the Banana grower pays the costs of the freight hauler, ripening service, wholesaler, further freight hauling, warehouse handlers, Shopping Centre floor space rental costs, shopping centre and wholesalers clenaing staff, the checkout chick, advertising costs.....

So.... most the the 'great money' crops are those in which you can control the 'off-farm' costs.

I'd imagine your lavender farm was supplying their own market, or had a partnership arrangement with a few specialty shops.

Perhaps you could be looking for ways to put your own product on the retail shelves, and therefor cutting out all the off-farm people you would normally need to pay for.
to do this I'd imagine you will need to look more at the available markets and you ability to do some promotion/marketing.

Hi Mark (et al)

My place is in the Hunter, NSW - rainfall's about the same as yours, but quite variable (we didn't have any rain at all for two years, and last June we had a third of our annual rainfall in four hours). We've got about 2ha of olives - table varieties that can double as oil, but the quantity just isn't there for the oil market - and besides, the money for table, plus the potential for value add, makes it viable.

You certainly need some 'out of the box' thinking. I concur with much of what others have said, but would qualify most of the advice with a resounding '... but maybe ...!' Such as the advice to steer clear of olives in this country (see above).

High-intensive farming is definitely the required approach on such a small property. I know you have experience with big property farming - I'm wondering if you're doing cell grazing with your 12 hectares (?). I note someone bemoaning the 'dust bowl' effect of raising animals .. which to me just means that their neighbour isn't skilled in raising animals. Joel Salatin has written some excellent material on integrating multiple animals into a sustainable system.

Not sure on details on your property, but if you own your own catchment, can set up dams, have done soil tests etc - organic certification may be worth the time and money. I think two things are converging in our favour (and against the 'biggest is best' style of farming). First, the rising price of oil, which will push up the costs of industrial scale farming - not just machinery, but the fossil fuel intensive creation of inorganic fertilisers. Second, the rising interest in the market for a quality product, with less sensitivity to price, and a far greater awareness, and interest in, the stories behind their food - the distance it travelled, how it was grown, etc.

I think the impact of both these trends is hugely under-rated, and offers lots of potential for the more long-sighted to create some $-security long term.

For crop growing you'd need to consider proximity to roads, markets, etc. And then you need to do that thing everyone else is trying to - working out a market that no one else has thought of yet. I'm looking at bamboo, because there's a huge market that's unlikely to ever be able to be met in this country, for shipping of fresh shoots into Asia out of (their) season. There is lots of propaganda about this market, of course, as evinced by the fact that no one has made their fortune from it so far.

The previous owner of our place used to raise silky 'black fleshed' chickens, which were hugely popular with certain parts of Sydney asian market - pregnant Koreans I think he said, were very keen on them. I'd suggest that pregnant Koreans are a robust and reliable market. Anyway, an intensive proposition, but certainly do-able on a small scale.

For fruit, I think limes are still the highest returning of citrus, and there was some good work done in SA recently on crossing Australian u-citrus to make some fascinating blood limes. But any specific examples are unlikely to be a perfect match anyway - it's more the examples of the kinds of weird thinking that may work out to be profitable. I've heard of someone who thought they had a worthless property, until a friend noticed that the clay there, previously a huge problem for the owner, was of a type highly valued by potters. Worth a fortune. Happiness ensued. A friend was almost convinced that it was worth starting up a nursery for supplying re-forestation businesses - the numbers of natives those guys deploy is mind-boggling, though by now I imagine most of them have spawned off their own nursery side-business.

As observed by someone else, the ATO is entirely against you with any attempt to diversify from your current non-ag (?) related pursuits - this change kicked in about 8 years ago I think, just before I started spending serious money on farm infrastructure. It's a bizarre situation, to be sure.

I was impressed with Andrew's list of left-field suggestions. Along that line, depending on capital, inclination, and timeframes, I'd add two more -- local timber plantations, specifically some varieties of Acacia are very fast growers and are highly sought after (and will survive frost and drought). They have the benefit of being pretty robust, low effort, don't appear attractive to passers by, and improve your soil while they're growing. Second, a support business, such as buying a bobcat (sure, a $100k outlay or so). As an example - around our way, some operators of this kind of machinery are very geared up for the industrial farm operation, and aren't empathetic of the city-farmer who wants a bit more care taken - consequently there's an opening there for someone who's conscious of that part of the market.

Finally, I'd recommend you find a local permaculture consultant or two and get them out if possible, for a walk and talk. They tend to be skilled in the integration of multiple and diverse systems, as well as experienced in the more weirder farming approaches.

Originally Posted by jedd

Hi Mark (et al)

My place is in the Hunter, NSW - rainfall's about the same as yours, but quite variable (we didn't have any rain at all for two years, and last June we had a third of our annual rainfall in four hours). We've got about 2ha of olives - table varieties that can double as oil, but the quantity just isn't there for the oil market - and besides, the money for table, plus the potential for value add, makes it viable.

You certainly need some 'out of the box' thinking. I concur with much of what others have said, but would qualify most of the advice with a resounding '... but maybe ...!' Such as the advice to steer clear of olives in this country (see above).

High-intensive farming is definitely the required approach on such a small property. I know you have experience with big property farming - I'm wondering if you're doing cell grazing with your 12 hectares (?). I note someone bemoaning the 'dust bowl' effect of raising animals .. which to me just means that their neighbour isn't skilled in raising animals. Joel Salatin has written some excellent material on integrating multiple animals into a sustainable system.

Not sure on details on your property, but if you own your own catchment, can set up dams, have done soil tests etc - organic certification may be worth the time and money. I think two things are converging in our favour (and against the 'biggest is best' style of farming). First, the rising price of oil, which will push up the costs of industrial scale farming - not just machinery, but the fossil fuel intensive creation of inorganic fertilisers. Second, the rising interest in the market for a quality product, with less sensitivity to price, and a far greater awareness, and interest in, the stories behind their food - the distance it travelled, how it was grown, etc.

I think the impact of both these trends is hugely under-rated, and offers lots of potential for the more long-sighted to create some $-security long term.

For crop growing you'd need to consider proximity to roads, markets, etc. And then you need to do that thing everyone else is trying to - working out a market that no one else has thought of yet. I'm looking at bamboo, because there's a huge market that's unlikely to ever be able to be met in this country, for shipping of fresh shoots into Asia out of (their) season. There is lots of propaganda about this market, of course, as evinced by the fact that no one has made their fortune from it so far.

The previous owner of our place used to raise silky 'black fleshed' chickens, which were hugely popular with certain parts of Sydney asian market - pregnant Koreans I think he said, were very keen on them. I'd suggest that pregnant Koreans are a robust and reliable market. Anyway, an intensive proposition, but certainly do-able on a small scale.

For fruit, I think limes are still the highest returning of citrus, and there was some good work done in SA recently on crossing Australian u-citrus to make some fascinating blood limes. But any specific examples are unlikely to be a perfect match anyway - it's more the examples of the kinds of weird thinking that may work out to be profitable. I've heard of someone who thought they had a worthless property, until a friend noticed that the clay there, previously a huge problem for the owner, was of a type highly valued by potters. Worth a fortune. Happiness ensued. A friend was almost convinced that it was worth starting up a nursery for supplying re-forestation businesses - the numbers of natives those guys deploy is mind-boggling, though by now I imagine most of them have spawned off their own nursery side-business.

As observed by someone else, the ATO is entirely against you with any attempt to diversify from your current non-ag (?) related pursuits - this change kicked in about 8 years ago I think, just before I started spending serious money on farm infrastructure. It's a bizarre situation, to be sure.

I was impressed with Andrew's list of left-field suggestions. Along that line, depending on capital, inclination, and timeframes, I'd add two more -- local timber plantations, specifically some varieties of Acacia are very fast growers and are highly sought after (and will survive frost and drought). They have the benefit of being pretty robust, low effort, don't appear attractive to passers by, and improve your soil while they're growing. Second, a support business, such as buying a bobcat (sure, a $100k outlay or so). As an example - around our way, some operators of this kind of machinery are very geared up for the industrial farm operation, and aren't empathetic of the city-farmer who wants a bit more care taken - consequently there's an opening there for someone who's conscious of that part of the market.

Finally, I'd recommend you find a local permaculture consultant or two and get them out if possible, for a walk and talk. They tend to be skilled in the integration of multiple and diverse systems, as well as experienced in the more weirder farming approaches.

Hi Jedd,

Wow! Thanks for that info

You have given me some definate food for thought. I was in a vegie market last week and I saw the Limes there for $30/kg and it got me thinking. My only concern was the market demand as I had a Lime tree a few years ago and the only thing I used it for was a slice in my Carona-.

As for the Bobcat idea I agree with you but in my local area Bocats are like bum holes(every ones got one) but I have been thinking in that general direction for a while.

I'm in a bit of a tight financil situation at the moment so I cant do anything yet but thank you all for the info.

Thanks....Mark

Mark,

Do you a dam/s?... chuck some marron in em.

Do Truffles grow in your neck of the woods?

Mark,

Limes - as I say, best of citrus, but not necessarily best fruit to grow in any given region. I got excited about them a while ago partly as a novelty fruit, partly because they (like most citrus) need lots of heat and I had that in buckets, and partly after talking to a few cocktail bartenders around Sydney who are always keen on something new and interesting to play with.

They have the combination of factors that's appealing - high intensity, easy to transport, long shelf life (without refrigeration), high unit value, good chance of direct selling, multiple uses in the food market.

There's plenty of rarefruit mailing lists around the net if you want to hunt down something exotic and fun. It may be worth trying to plant out a few likely candidates to see how they go in your part of the world. This kind of experimentation is relatively inexpensive but so very useful -- I've put in about 80 types of plants so far, and now have a good idea on what definitely doesn't grow.

Grok that you are a bit short on funds. What I'd recommend, very strongly, is that you plant out some acacias right now on any bare ground that you may one day in the future use for tree crops. You'll get 'em cheap as chips from your local state nursery, and they'll work wonders for your soil even if they're only in for a couple of years.

If you can also do some soil tests - they're about $110 in NSW through the Lands department I think - they'll also give you a clear idea on what things you should be ruling out from the get-go.

Hey Jedd

We just bought 2 acres planted in olives near Bathurst. We bought it for the land rather than the olives and plan to just leave the trees (there's a bore and an irrigation system in place) and tend a half dozen trees for our own needs. Unless you have any other suggestions. Is100 trees viable as a produce crop?

Mark - i have friends who grow miniature vengetables for restaurants all over the country. They can't keep up with the demand.

My partner reckons kangaroo paws is the way to go and says there's a good market for them these days.

Exotic mushrooms is another produce restaurants are into currently with too few suppliers.

on 3.5 acres forget any kind of live stock not even lowline .
as for growing some kind of produce it would have to be a very labour intensive type product .
a few years back we got in a dozer and pushed out over 100 acres of stone fruit more than 30,000 trees all under trickle irrigation i know cos i spent six bloody weeks pulling out all the trickle and drippers, peach plumb nectarine apricot and some almonds .
not worth the the time and money and a waste of good ground for the return .
one good year out of every 5 , hail ,flying foxes ,parrots ,brown rot ,when the fruit was on we spent almost every day spraying. you name it and we had all the gear misters air pruners , drive in 20 pallet cold room the lot ,and we had an market advantage of early varieties that came on 4 weeks before stanthorpe
that country now grows lucerene under centre pivot mainly and makes 10 times what the fruit did for a 10th of the work .
to make money on that small a block you need some thing very very labour intensive flowers maybe , forget olives all together,ask any rural money lender about olives they will tell you .
i share farm a bit on the side ( pumpkins for brissy market rocklea )and it keeps me flat out i use some ground that belongs to the farm that i work for ,
this year i have 12 acres of pumpkins in .
herbs are a maybe contact medi herb warwick for some info on that .

Originally Posted by do-it-dog

Hey Jedd
We just bought 2 acres planted in olives near Bathurst. We bought it for the land rather than the olives and plan to just leave the trees (there's a bore and an irrigation system in place) and tend a half dozen trees for our own needs. Unless you have any other suggestions. Is100 trees viable as a produce crop?

What Texx said. Though I'm probably not quite so cynical as he.

Do you know what type of olives? A lot of the bank manager types that Texx refers to are reacting to the huge interest in growing olives for oil - these tend to be very large scale operations, highly mechanised - both of which imply much cost, and unfortunately can't really compete with established european suppliers. Oil's way too easy to ship around the globe.

OTOH I think there may still be some market for table olives. Not sure what scale you'd need to be looking at, but i suspect a couple of acres wouldn't be enough. As a supplemental to some other value-add lines, though, it may be worth considering.

Kangaroo paw - or any cut flower - is probably worth investigating, as there's lots of interest in natives, and many of them are pretty robust (thinking of things like proteas). But the cut flower market is particularly sensitive to economic hiccups .. as per all luxury items I guess.

Exotic mushrooms are a nice idea - I'll be growing some of these (and I was happy to see we've got a local provider of spores now - http://www.forestfungi.com.au/ - which is excellent.

But around your way I'd expect it's too hot, and too cold, and would require a lot of water and indeed other raw materials (that are also going to be expensive given the hot/cold/dry problem) to propagate them, plus the infrastructure of course. But certainly worth some research.

One last thing - be sure to do a water test on your bore water - it'll be about $150, and DPI (I think) will do them, as will most Ag Supply places (they'll zap 'em thru a local lab). Highly recommended given the amount of nasties in bores.

We went through this a few years ago in northern NSW and settled on bamboo as it offered the prospect of making a primary production return from a tax perspective on 2 Ha. It has been lots of hard work and anxious moments ever since, including a total rewrite of the business plan and reshaping of our objectives due to the prospects for shoots not really working out.

It is really hard to do something cost effective and tax effective on a small holding without having to put a disproportionate amount of work into it.

I note an earlier reply suggested bamboo - with 500mm annual rainfall you would need a lot of irrigation to get to the 1500-1800 annual equivalent that bamboo needs to make it work well. I would imagine that something like sandalwood would be an interesting and worthwhile consideration in WA as there is considerable interest and research going into it and while it might look risky there are some good returns being made apparently.

if you are in a suitable area and not too far from a winery to process, planting grapes for wine is a crop you may have not have researched, while the infrastructure is not cheap the return on a bottle of wine is huge compared to selling fruit. Most wineries will enter into an agreement to process fruit to the bottle, and in doing so keep 1/2 for themselves. this may sound very weighted to the winery, but consider this a ton of grape is currently selling for $1200 per ton, this will render 750 bottles which can if quality wholesale at $12 to $14 and retail at $17 upward, the licence for a cellardoor will cost $500 but after that you can retail to the public with all markup going to yourself. Anyhow some food for thought, drop me a line if you need more specifics.best of luck!