Change is about the only certain thing these days, and it seems the person who is willing to adapt and capitalise on the opportunities that are presented is the one who will survive and prosper.
One of the downsides of change is it creates quite a deal of sunk capital, assets that no longer have any value or use.
These days I spend a lot of time at Warrnambool in Western Vic, which is the heart of one of three major dairying areas in that state.
With high cost structures and low incomes many farmers were forced to relinquish dairying, move into beef or sell up and move on. There are a considerable number of modern dairy sheds laying idle that have little worth.
Many dairyfarmers worked their backsides off to stay in the game and took on extended debt in the hope they could hang on until the industry improved.
Conditions have improved in recent times but a considerable number could not hang on long enough. The farmers who shut down their dairies did so very reluctantly and many remained bitter with the industry.
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Most who converted to another enterprise now have smaller incomes and compromised lifestyles. The sad thing is that the dairy shed sits outside the back door and remains a daily reminder of the struggle they had. In some cases, it does not allow these farmers to move on mentally. Dairying is what they loved.
During this challenging period, one of the major dairy processors shut its factory in Warrnambool, leaving a high level of sunk capital - one day worth many millions of dollars as a modern milk processor and the very next day arguably worth nothing. A stock food company took up residence in the former milk factory sometime later, so it has value again.
As I drive through cropping areas, I see one disused shearing shed after another. With the national sheep numbers declining from 180 million to 60m in the past 25 years, it is little wonder that there would be hundreds fewer shearing sheds required.
These sheds, the fences and extended watering system add to the sunk capital figure on a lot of farms. The disused shearing shed is now used as a storage shed, a small consolation for what was deemed to be a $150,000 asset just a few years earlier.
Having invested in large-scale modern machinery, croppers need every available hectare to make the machinery pay for itself. This leaves no place for sheep on the farm, even given a healthy livestock industry in recent years. Reintroducing sheep onto a great number of cropping farms would be prohibitive given the cost to reinstate the infrastructure.
In the case of older infrastructure that is no longer used and has very little chance of reuse, it may be time to dismantle and dispose of it. In some cases, the best remedy would be one day's hire of a bulldozer where a big hole could be dug, and the problem be hidden for good. Moving on in life is so important for your future success.
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