Hi all,
We’re back again with another update, with a focus on the financial services industry and what lessons farmers can draw from their current woes.
Andrew Bomm
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Entitlement prices
It’s likely that Murrumbidgee General Security entitlement prices have gone beyond $2000/ML. It may only be large parcels at this stage, but it shows how much people have made from irrigated cropping post-drought and how bullish they are about commodity prices and the importance of a secure water supply.
Blue Sky
Blue Sky Alternative Investments, owners of large parcels of irrigation entitlements, are going through a rough trot at the moment. A recent analyst’s report belted them about overvaluing their assets and the potential for assumed capital growth to be unrealised. Their share price has tanked to $3.10, from highs of $14.70 in late December. The Blue Sky water portfolio has probably performed the best for capital growth, and it will be interesting to see if they need to cash in on some of this growth.
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Nothing clarified
Everyone wants to know when or if the autumn beak will come and I’ve got nothing to help on that front. Indications are neutral, but there’s nothing good coming soon. The BOM is saying ‘neutral’, while AV is calling a relatively dry May/June, with potential for benefits from a shift in the IOD after that.
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Banking woes
It’s been interesting to see information coming out of the banking royal commission. About ten years ago, I worked on a parliamentary inquiry into financial services. It covered a lot of the same ground, but pollies on both sides squibbed the opportunity for proper reform of the financial advice industry. The same things have been going on for ages, with the interests of shareholders and employees put ahead of customers.
The bugger of a thing is that it’s really hard to set public policy in this area without unintended consequences for reputable advisers, or not working because unethical operators find a loophole. Because pollies end up making half-arsed compromises in the parliament, the task is even harder.
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Testing the debt market
The take home message of the banking royal commission for farmers: banks can also take their farm business clients for granted and take over-the-odds margins on debt. The same rationale is at play, with banks relying on customers taking a set-and-forget approach to financial services. Farmers have a great opportunity to keep their bank honest and reduce debt costs by engaging a finance broker to test the market.
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US presidential election
US Vice President Mike Pence is paying $13 to win the 2020 US presidential election. With there being every chance Trump will want to save face and retire after one term, rather than being defeated or subsequently impeached, this is outstanding value
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Social class in Australia
ABC Radio National continues to deliver fantastic podcasts. This is the first in a series on social class in Australia.
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Graingrowers innovation conference
Graingrowers’ Innovation Generation conference is in Wagga this year from 9-11 July. The theme for this year is Building Blocks for Success, including information about succession planning, farm business finance options, marketing and branding strategies, and value adding on and off farm.
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Women’s leadership and management training
House Paddock Training and Consulting are running their ‘Grow’ program again, providing leadership and management training for women in the cotton and grains industry. It’ll run in Wagga sometime between June and December. To find out more and express interest in participating, check out their Facebook page.
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Old school marketing was different
Here’s an ad for Winston cigarettes – brought to you by the Flintstones. Yep, children’s programming advertising cigarettes as their program sponsor.
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