03/11/2025 - SA Farming - Michael Bagshaw

End of Message is a short-form podcast where we chat with Farmers and leading figures in Agriculture about what’s happening right now — the news, the ideas, and the stories that matter.

Transcript

SPEAKER_00: 0:02

I've got Michael Bagshaw on the phone from Bagshaw Agriadvisory. Welcome to end a message, Michael. Thanks, Dwayne.

SPEAKER_01: 0:11

Good to make uh debut here. I'm always uh listening to what uh to what you're doing.

SPEAKER_00: 0:17

No, very good. Um you're over in South Australia and most of your clients would be in that South Australian area, and obviously had a bad 2024 and a tough start to 2025. How are the South Australian farmers going as we speak?

SPEAKER_01: 0:35

Uh well, certainly much improved on 2024, as you said. Um 2024 was uh one of the worst on record, and and for quite a few of them it was probably the worst on record. Yeah. Um in depending on again, depending on what what part of what part of the estate you're in, some of those some of those areas in the dry area, dry parts of the state are struggling a bit, but um generally I would, you know, most of the people I'm in contact with, which you know, some other people would have a broader cross-section of connections, but they're generally doing doing okay. Wait and see at the moment.

SPEAKER_00: 1:25

And what have you seen like uh as far as overdraft extensions with your clients? Because I had a had a guy who's got a you know about a hundred clients the other day, and he told me there was only two that didn't need an overdraft extension. What are you seeing in your business?

SPEAKER_01: 1:41

Um mine's mine's not that uh mine's certainly not to that extent. And and I I think about 35-40% of mine needed that um extra support. And parts, as I said to you, just off the call, Duane, um, there's probably some that did plan to pay the ancient principal and have decided not to do it. So you know, you could argue by default, um they they've given them given them server support in that regard. Yep. I must say every bank I've dealt with, and I know and I don't know this has been across everyone's experience, but it's certainly been my experience that all the banks I've dealt with, and that's every single one of them, have been very supportive. Um but I'm pretty sure that's a function of the clients being on the front foot.

SPEAKER_00: 2:34

Exactly, yeah. No, we're hearing the same thing. If you just go in and expect something to happen straight away, it's not going to happen. You've got to be on the front foot and get into it early, wouldn't you say?

SPEAKER_01: 2:45

Uh yes, you do indeed. And um, you know, I know some people that you know you'd mentioned before that that send those reports in reports in monthly. I I think that's terrific. I'd that's the only farm Rob ever heard of that that does it. I'm sure, you know, I'm sure them are I'm sure there's others, but yeah. Uh, you know, quickly before the end of the like calendar year, um, you know, because if if opportunities pop up, you want to be on the front foot. Exactly, exactly.

SPEAKER_00: 3:18

Do you reckon all I find that all takes too long? Is that just uh how accountants operate, you know, getting the the financials done, or is it just a process that you know you can put your go and put your name forward, I want mine done by the end of November or something like that? What have you found there?

SPEAKER_01: 3:34

I think it's uh it's a case of um both parties need to be on the same page. Yeah. If you say to your accountant, I I want them done by the end of October or something like that, and if they agree that they can fit their that fit that into their schedule, well that's then it's on you as the business owner to provide the information that's that's been asked. Yeah, exactly. You can't expect them to have to come back and um answer queries and questions or you know, keep keep asking. So you know, they always you you know they run on uh checklists, so you just provide the information, get on the front foot. Uh with particularly these days, Zero and all the other packages are out there, um, you know, you can reconcile things quite quickly. And so it's really not that difficult if you get onto it.

SPEAKER_00: 4:30

No, that's and just just quickly about the air in York Peninsula where they and obviously the mid-north where they grow lots of lentils, and obviously without the lentil price drop. What what have you seen there from farmers about lentil farming? What are with the price drop?

SPEAKER_01: 4:46

Um, yeah, as I've said to you before as well, Dwayne, there's a there's a few of them who who have the uh capacity to do so, they'll they'll just hold lentils. So they certainly would certainly won't be selling at these at these prices. And if they need to, they'll just go and build another shed. Um and there are there are some some doing that, but you know, I I guess some will need to move to you know to move them, and each obviously each situation, each uh business, business situation is different. Um it'll be uh interesting, you know, some places like the um York Peninsula, where the high higher lease rates are predicated on uh lentil price. Yes. It'll be it'll be fascinating to see how those negotiations go when those leases uh are due are due to expire. Um there might be a bit of a gap between the lessies and lessors expectations, I suspect.

SPEAKER_00: 5:47

Interesting, I saw a survey the other day which um surveyed people on where, you know, what at what price would they sell their lentils, and a third said they'd sell them pretty much at the prices they are because they need the cash flow, and another third said they wouldn't sell they'd sell between 700 and 800, and another third said they wouldn't sell under 800, so just depending on the situation.

SPEAKER_01: 6:11

Yes, it does, and yeah, it's sort of on the uh, you know, it'll yeah, I think you're right, it'll just be on the basis of what do we need as far as uh cash flow requirements for sure.

SPEAKER_00: 6:22

That's it. Um you write for the stock journal. What's going to be in your article this week?

SPEAKER_01: 6:27

Um this week is gonna be an article about uh when when is a good time when is a good time to buy a farm.

unknown: 6:34

Yep.

SPEAKER_01: 6:35

Um when I was over at Pascoville Field Days six weeks ago, yeah. There was a one of the partners of uh one of the uh accounting firms in Adelaide just asked me that question and I went, Well, I don't know, it's a good question, isn't it? Um so you know I I think that it'll it'll be uh and there was example of a um property in the lower north, South Australia that sold a few weeks back and$15,000,$16,000 an acre or something. Yep. But it was it's really, really good country, but the other side of that is it had been in the family for a hundred and fifty odd years, I believe. So the the chances of of it coming up again are minimal. So yeah, I think in those situations you kind of have just just have to do it. Yeah, but it's just about you know, I I think you know, what what's the reason? And it's rhetorical question, but what's what's the reason why you're doing it? Is it yeah is it to build the asset base? Is it to pump your ego up? Yeah, is it to um get a commercial return? Like you need to work out the why, and then uh and then the sort of the path will become clearer.

SPEAKER_00: 7:49

No, good one. Well I look forward to that. Thanks for joining us, Michael.

SPEAKER_01: 7:55

No problems, Dwayne. Um, yeah, and yeah, really enjoy really enjoy the uh the daily um writings.

SPEAKER_00: 8:04

No worries. Have a great day, everyone, and a message.