There's no harm in dreaming big, but when it comes to investing in new infrastructure projects to help boost farm productivity, be prepared to be surprised by what you did not anticipate.
Good farmers don't necessarily have the time or foresight to know enough about making big investment projects work to their best advantage or getting them completed on time.
Farmers attending Dairy Australia's ultimate "dream big" conference event, Raising the Roof, were warned big projects, like large scale dairy housing, may not even reward their owners by adding significant real estate value to their farm.
A large infrastructure build was not the same as buying a block of land or the property next door, explained Rural Bank senior insights and regional agribusiness manager, Greg Kuchel.
Investing in big sheds, bails and robots would fundamentally change the business and fundamentally change the marketability of the farm asset if an exit was needed.
"Are there going to be buyers who will want to invest in this sort of asset if something happens and you need to consider selling," he asked farmers to consider.
Other planning considerations and potential surprises may include discovering the bank manager far less enthusiastic about such a significant investment or deviation in business direction.
Importantly, construction activities carried much higher risks for financiers these days thanks to major building industry labour force shortages, rapid price changes and supply chain delays.
Transitioning to a different scale business could also require more specialised labour and expensive machinery to operate, and different debt servicing commitments.
Ask yourself if you really have the capabilities to implement a project of this scale and continue running the farm profitably
- Greg Kuchel, Rural Bank
Meanwhile, although many farmers were blessed with plenty of practical and management skills, in a lot of cases they should stick to running their farm.
"Ask yourself if you really have the capabilities to implement a project of this scale and continue running the farm profitably during the construction phase," Mr Kuchel said.
Engaging a project manager may seem like an unwarranted extra expense, "but don't be frightened, it could be the best investment you make" to get the job done properly, on time and on budget.
Skillful, bank-approved quantity surveyors would also be imperative.
He told delegates at the Hunter Valley event big scale projects had to be meticulously planned to accommodate the risk of significant cost blowouts, including suppliers and contractors going broke.
"Can the deficit be funded? What if it can't?" he said.
"How robust are your costings for labour and materials?"
"Dream big, but invest a lot of time in thinking about what you need."
Mr Kuchel recommended starting with a very early conversation with the bank manager which would lead to fewer surprises and a better outcome in the end.
Dairy farm management advisor with CRC Agrisolutions, Brian Crockart, agreed major business transitions in dairy farming systems required more than just good ideas - they started with a comprehensive understanding of current business performance.
Thorough planning was pivotal in understanding the strengths and weaknesses of the existing system and allowing producers to adopt a targeted approach to improvement.
Importantly, the planning process helped pinpoint specific existing risks to the business, enabling operators to identify their management priorities and safeguard against fresh undue risks.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
