Getting farm finance while retaining female breeding stock

Getting farm finance while you’re growing your breeding stock can be challenging. This period typically doesn’t look great financially because you lose potential income when you hold back female stock to increase your herd/flock or have higher costs if you opt to buy new livestock. Despite this, it’s not impossible to get farm finance if you do your homework.

Many of our clients have difficulty getting farm finance during this time. However, with these simple tips, you can show your bank manager that your business is viable.

  1. Show you have a plan

A plan shows your bank manager you have a strategy guiding your business. The plan should clearly show your farm’s optimal herd or flock size and when you expect to achieve it.

  1. Line up your livestock numbers with your financial statement

Pull together the number of breeding stock you have, with retained female numbers separate from the last five years. These numbers should be presented against your financial statements to show the impact.

  1. Use your livestock schedules to support your growth goals

Your livestock accounts are an important way to back up the herd size you want to get to. This also shows how you will achieve this goal and should match up with your cash flow projects.

  1. More on cashflow

You need to prove you have the cash flow reserves to support your business during the lean years when you’re building your breeding stock by keeping female livestock. Often, this is the time to take up interest-only payments.

  1. Keep it simple

Sometimes you can overcomplicate the information you provide the bank when all you should do is show a clear story on how you’re working toward your goal.

This is a summary to give you general information on how to raise finance when things are lean while building breeding stock. All farming businesses are different, we can help you create a plan and help you present your business when it comes time to raising finance. Get in touch with your local SproutAg representative today to find out more.


What is Agribusiness?

What is Agribusiness? An Overview of the Agricultural Industry

Agribusiness is a term that combines agriculture and business, referring to any commercial activity related to farming and food production, through all stages of the process starting at pre-farm all the way through to retail.

The agribusiness industry is an essential part of the global economy, contributing significantly to the GDP of many countries. In highly industrialised countries, many activities essential to agriculture are carried out separately from the farm. Agribusiness has become increasingly important in recent years due to the growing demand for food and the need to feed a growing global population.

The industry faces many challenges, including climate change, water scarcity, and the need to produce more food with fewer resources. As the world’s population continues to grow, the agribusiness industry will play a critical role in ensuring that there is enough food to feed everyone. In Australia particularly, farming and agribusiness play a significant role in our regional and rural areas, not only having a consequential impact on local economies, but also on the social wellbeing with many agribusinesses embedded and connected within their communities and families.

Definition of Agribusiness

Agribusiness is a term used to describe all the activities involved in producing and distributing agricultural products. It encompasses all aspects of agriculture, from crop production and farming operations to the sale of agricultural commodities, including companies that produce fertilisers and pesticides, farming equipment manufacturers, food distribution companies, and more.

The agribusiness sector includes a wide range of enterprises involved in producing, processing, and distribution of food and fibre products and by-products, as well as cultivated products for consumer use. It is a complex industry that requires a wide range of skills, including farming, marketing, finance, and agribusiness management.

This industry is an essential part of the economy, as it provides food and other agricultural products to consumers throughout Australia and worldwide.

History of the Agribusiness Industry

The history of agribusiness can be traced back to the early days of agriculture, when farmers began to specialise in certain crops and began to trade their surplus with other farmers. As agriculture became more sophisticated, so did the businesses that supported it.

The modern agribusiness industry began to take shape in the early 20th century, as advances in technology and transportation made it possible to produce and distribute agricultural products on a large scale. The introduction of new farming techniques, such as mechanisation and the use of chemical fertilisers and pesticides, also helped to increase agricultural productivity and efficiency.

Today, agribusiness is a major industry that plays a critical role in feeding the world’s growing population. As the demand for food and other agricultural products continues to increase, agribusiness will remain an important and dynamic industry that is constantly evolving to meet the needs of consumers and farmers alike.

Types of Agricultural Production in Agribusiness

Agribusiness is a broad term that encompasses all commercial activities related to farming, agriculture and retail food supply. It includes a wide range of industries, from farming and ranching to forestry and fishing. Here are some of the main types of agribusiness:


Farming is the cultivation of crops and the rearing of livestock for food, fuel, and other products. This includes everything from small-scale family farms to large commercial operations. Farming can be divided into several categories, including: 

  • Arable farming: the cultivation of crops like wheat, corn, and barley 
  • Livestock farming: the rearing of animals like cows, pigs, and chickens for meat, milk, and eggs 
  • Mixed farming: a combination of arable and livestock farming 


Graziers rear livestock on a large scale, typically in a semi-arid or arid environment. Graziers produce animals like cattle, sheep, and goats for meat, wool, and milk. Graziers often manage a lot of land, and have to deal with issues like drought, wildfires, and predators. 


Forestry is the management of forests for timber, paper, and other wood products. Foresters plant and harvest trees, manage forest ecosystems, and protect forests from pests, diseases, and wildfires. Forestry also involves the conservation of wildlife habitats and the preservation of biodiversity. 


Fishing is the harvesting of fish and other aquatic animals for food, sport, and other purposes. Fishermen use a variety of techniques, from nets and traps to lines and hooks, to catch fish in freshwater and saltwater environments. Fishing can be a sustainable industry when managed properly, but overfishing and other environmental issues can threaten fish populations. 

Role of Agribusiness in the Economy 

Agribusiness plays a vital role in the economy of many countries. The sector provides employment opportunities to a significant percentage of the population, especially in rural areas. In addition, it contributes to the overall economic growth of a country through exports and the supply of raw materials to other industries. 

The following are some of the ways in which agribusiness contributes to the economy: 


Agribusiness provides employment opportunities to millions of people worldwide. According to the World Bank, the sector employs approximately 26% of the global population, the majority of which is in developing nations. In developing countries, agriculture accounts for up to 70% of total employment. The sector provides jobs not only in farming but also in processing, packaging, transportation, and marketing of agricultural products. 

Finance & Income Generation 

Agribusiness generates income for farmers and other stakeholders in the supply chain. By providing a market for their products, farmers can earn a decent income and improve their standard of living. In addition, agribusiness creates opportunities for entrepreneurs to invest in processing, packaging, and marketing of agricultural products, which generates income for themselves and their employees. 


Agribusiness is a significant contributor to the export earnings of many countries. Agricultural products such as coffee, tea, cocoa, and fruits are some of the most traded commodities in the world. In addition, agribusiness provides a market for other industries such as manufacturing, which rely on agricultural raw materials. 

Food Security 

Agribusiness plays a critical role in ensuring food security in many countries. By producing enough food to meet the needs of the population, agribusiness reduces the reliance on food imports, which can be expensive and unreliable. In addition, agribusiness promotes the adoption of modern farming techniques and technologies, which increase productivity and reduce post-harvest losses. 

Challenges Facing Agribusiness 

Agribusiness faces many challenges that can threaten the industry’s sustainability and profitability. In this section, we will discuss three major challenges facing agribusiness today: climate change, market volatility, and supply chain issues. 

Climate Change 

Climate change is a significant challenge facing the agribusiness industry. Rising temperatures, changing precipitation patterns, and extreme weather events are impacting crop yields, soil health, and water availability. As a result, farmers are facing increased costs, reduced yields, and greater risks. 

Adapting to climate change requires significant investment in research and development, new technologies, and infrastructure. For example, farmers may need to invest in irrigation systems, drought-resistant crops, and precision agriculture technologies to manage water and nutrient use more efficiently. 

Market Volatility 

Market volatility is a significant challenge for agribusiness. Prices for agricultural commodities can be volatile, driven by factors such as weather, supply and demand, and geopolitical events. This volatility can make it difficult for farmers to plan and manage their businesses effectively. 

To manage market volatility, farmers and agribusinesses must develop strategies to hedge against price fluctuations, such as forward contracts, futures, and options. Additionally, they may need to diversify their operations to reduce their exposure to any one commodity. 

Supply Chain Issues 

Supply chain issues are another significant challenge facing agribusiness. The COVID-19 pandemic highlighted the vulnerabilities of global supply chains, with disruptions to transportation, labour, and processing facilities impacting the availability of agricultural products. 

To mitigate supply chain risks, agribusinesses must develop resilient and flexible supply chains. This may involve investing in local processing facilities, diversifying suppliers, and building strategic partnerships with other stakeholders in the supply chain. 

Opportunities in Agribusiness 

Agribusiness is a rapidly growing sector that presents numerous opportunities for investors, entrepreneurs, and farmers. The industry is constantly evolving, and new technologies and practices are emerging to improve productivity, efficiency, and sustainability. This section will explore some of the opportunities in agribusiness, including technological advancements and sustainable practices. 

Technological Advancements 

One of the most significant opportunities in agribusiness is the adoption of new technologies. From precision agriculture to biotechnology, there are numerous ways that technology can improve productivity and efficiency in the sector. For example, precision agriculture uses GPS, sensors, and other technologies to monitor crops and soil conditions, allowing farmers to make data-driven decisions about planting, fertilising, and harvesting. Biotechnology, on the other hand, involves the use of genetic engineering to create crops that are more resistant to pests and diseases, or that have higher yields. 

Other technological advancements in agribusiness include: 

  • Robotics and automation: Robots can be used for tasks such as planting, weeding, and harvesting, reducing the need for manual labour and increasing efficiency. 
  • Drones: Drones can be used to monitor crops, assess soil conditions, and spray pesticides and fertilisers. 
  • Big data: The use of big data analytics can help farmers make more informed decisions about planting, fertilising, and harvesting, based on data such as weather patterns and market demand. 

Sustainable Practices 

Another significant opportunity in agribusiness is the adoption of sustainable practices. With increasing concerns about climate change and environmental degradation, there is growing demand for food that is produced in an environmentally friendly way. Sustainable practices can also improve efficiency and reduce costs, making them an attractive option for farmers and agribusinesses. 

Some examples of sustainable practices in agribusiness include: 

  • Organic farming: Organic farming involves the use of natural fertilisers and pest control methods, and avoids the use of synthetic chemicals and genetically modified organisms. 
  • Conservation agriculture: Conservation agriculture involves practices such as reduced tillage, cover cropping, and crop rotation, which help to improve soil health and reduce erosion. 
  • Agroforestry: Agroforestry involves the integration of trees into farming systems, providing benefits such as shade, windbreaks, and improved soil fertility. 

Agribusiness presents numerous opportunities for investors, entrepreneurs, and farmers. Technological advancements and sustainable practices are just two examples of the ways that the industry is evolving to meet the challenges of the future. By embracing these opportunities, agribusinesses can improve productivity, efficiency, and sustainability, while also meeting the growing demand for food that is produced in an environmentally friendly way. 

Future of Agribusiness 

The future of agribusiness looks promising, with the industry poised to undergo significant changes in the coming years. Advancements in technology and shifting consumer demands are driving this transformation. Here are some of the key trends that are shaping the future of agribusiness: 


AgTech, or agricultural technology, is one of the most significant trends in agribusiness. The sector is expected to triple in size, with the market worth $12.4 billion in 2020 and projected to reach $34.1 billion by 2026. In Australia alone, there are over 300-400 young startup companies that are seeking game-changing digital technologies to enhance their operations. These technologies include precision agriculture, drones, robotics, and artificial intelligence, among others. They help farmers to reduce costs, increase yields, and improve efficiency. 


Sustainability is another critical trend that is shaping the future of agribusiness. Consumers are increasingly concerned about the environmental impact of food production. As a result, there is a growing demand for sustainably produced food. This trend is driving the adoption of sustainable farming practices, such as regenerative agriculture, organic farming, and vertical farming. These practices help to reduce the environmental impact of food production while also improving the quality of the food. 

Changing Consumer Preferences 

Consumer preferences are changing, and this is having a significant impact on the future of agribusiness. Consumers are looking for healthier, more sustainable, and more ethically produced food. This trend is driving the adoption of plant-based diets, which are becoming increasingly popular. As a result, there is a growing demand for alternative protein sources, such as plant-based meat substitutes. 


Globalisation is also shaping the future of agribusiness. The industry is becoming increasingly global, with more and more food being produced and consumed across borders. This trend is driving the need for improved supply chain management, logistics, and food safety standards. It is also creating new opportunities for farmers and agribusinesses to expand their operations and tap into new markets. 

The Business of Agriculture is More Accessible Than Ever with the Right Financing 

The global role agribusiness has to play is critical for a sustainable future. At SproutAg, we know a big part of ensuring the effectiveness of agricultural production and processes is simplified and stress-free access to financing when you need it most. 

Our specialised team are experienced in agribusiness finance, business advisory, succession planning and all things finance in farming. Contact our team today to learn how we can help secure the financing your agribusiness needs.

Inflation and working capital

In 2021, disruptions in supply chains and increasing inflation have made headlines across the world. These disruptions in the supply chain are having two impacts; increased cost of production and few goods available for people to buy. The flow on from this is an increase in price for goods, which is driving inflation and why the recent US CPI increase is at an almost 30 year high.

Australia is no different with the ABS announcing CPI had increased by 3% over the last 12 months ending September 2021. So, what impact does this have on your farm?

Working Capital Accounts

Cash flow is the lifeblood of any business, something challenged with continual price rises that cause you to revise your budget. In addition to this challenge is the lack of certain inputs, like urea, you need to operate your business causing disruptions.

In the case where you know an input will be difficult to buy it’s a good idea pay close attention to them, purchase up extra quantities so you have it on hand when needed. This strategy will mean you can continue to operate but it will cost more as you buy in larger quantities.

Five Tips.

  1. Work harder on your return on investments to get the most out of your assets.
  2. Look at your expenses across the whole business, prioritise them and put more focus on expenses in general so you are only spending on what adds value.
  3. Increase the majority of your expense items and make sure you have a strong understanding of your working capital position in advance.
  4. Plan increases to your cash or credit lines that can be used against your expenses in advance.
  5. Plan for delays in supply chains as they’re not likely to ease soon so you can calculate how much inputs you need to purchase.

By following these steps, you can manage the speed bumps that come along with inflation and supply chain delays to keep the farm running efficiently.

When it comes to bank finance preparation is vital

If you want to be able to buy the right place in today’s property market, you need to be organised and prepared. When working with our top clients who intend to buy farmland in 2023, we start working with them in early 2022. This is because the current seller’s market with land prices rising significantly across all markets in recent years have meant success relies on a person being prepared and agile to be successful.

Considering settlement is around 40 days, an auction or expression of interest period can be as little as six weeks the ability to have your finance in place can be the difference between you buying the land or missing out.

Another factor, we’ve noticed is the reactionary nature of purchases as people tend to be too busy working in the business to think through what they need to do and start working on. Two main factors for this are:

Lack of time

The day-to-day operation of a farm can often take precedence over the preparation needed to take on the next acquisition. It can be easy to underestimate the work involved in obtaining finance and the time needed to find out the right information. You should also consider getting a second opinion when getting financial advice.

Agri-finance is also inconsistent and complicated meaning it can be time-consuming when you are trying to find out information. We’ve seen inconsistency right through from obtaining credit, to structuring and pricing.

Understanding bank requirements have changed

Gone are the days when you turn up the bank and secure finance based on your loan to value ratio (LVR) and equity position alone. Instead, cash flow and showing you can repay the debt is critical for raising finance.

Banks look at your ability to repay your finance even when interest rates rise against your cash position in order to make a decision. Equity is also important to want to continue to lend and provide help should you require additional working capital.

The pros and cons of livestock finance

Livestock finance is a helpful way to buy stock to take advantage of a market when you may not have the cash flow on hand. This flexibility to purchase livestock at the right time is also an intelligent way to make decisions when needed to make your operation more profitable.

There are other benefits: livestock finance doesn’t require you to put up land as security. It won’t churn up your cash flow, and it’s usually has a fast turnaround to secure, allowing you to take advantage of conditions as they happen.

SproutAg has gotten to know just about all of Australia’s livestock finance lenders – the good and the bad – so we’ve been able to take a strong view of the whole marketplace. We’ve taken the view that livestock finance is more expensive than similar equipment financiers or banks. There are a few reasons for that; stock and station agents usually take an 8 to 15 per cent cut, dedicated livestock funders take around 11 to 15 per cent, plus you have breeder facilities (7 to 12 per cent) and trade finance (6 to 8 per cent).

With this in mind, we suggest you look out for these three factors, so you are getting the most from livestock finance.

  1. Hidden Costs: Many livestock finance contracts can be confusing and don’t easily show the real interest rate and fees. Some financiers will charge capitalised interest, interest on interest, which drastically increases the actual interest rate. We’re happy to review contracts before you sign them.
  2. What’s the actual cost: How a season pans out, or if livestock doesn’t gain weight as expected, you might find the repayment costs or the pay-back in the breeder facility makes the actual price of finance too high for it to be profitable.
  3. Security: Many livestock financers use an additional security clause in the background of the agreement that, in essence, gives them the right to mortgage your land if you’re unable to repay the loan.

As you’d imagine, livestock financers come and go over the years, and they often change their rates and finance costs along with their unique requirements that you need to decipher. However, livestock finance can be an excellent way to improve the profitability of your farm. We recommend before taking out livestock finance, you do your homework, weigh up the benefits with the risks, and if in doubt, speak to an expert.

SproutAg are the experts in livestock finance. Get in touch today.