Farm life a tough ask with rising land prices and cost pressures adding to the strain
Wade von Stieglitz had a lucrative career in the gas industry but he gave it all up to follow his dreams.
Higher land prices, interest rates and other cost pressures are helping to push up food prices
Median farmland prices jumped 20 per cent in 2021, with the most expensive land in Tasmania and Victoria
First-time farmers are struggling to afford property that is large enough to make a living
He always wanted his own farm but when he looked at properties, the only place he could afford was far too small to support a family.
“It’s 70 acres but I wish it was 700, something that we could actually make a living off,” he said.
“There’s hopes and dreams and then there’s reality.”
Wade hopes his “starter” block at Sunnyside in Tasmania’s north-west will be the first step in building a full-time career as a farmer — but rapidly rising land prices will make future expansion incredibly tough.
“This place has gone up $400,000 in bloody two years,” he said.
Land prices rising at an ‘alarming rate’
Just as sky-high property prices have made home ownership impossible for many Australians, first-time farmers are also being locked out of the market.
Even members of well-established farming families are feeling the pinch, such as Alastair Bowman, whose family has tilled Tasmania since the 1800s.
“So for someone that’s wanting that dream of their own place, that 100 acre block isn’t necessarily profitable. It’s something that’s more of a hobby as opposed to a full-time job.”
Land values are soaring to record heights across Australia, with year-on-year growth of more than 30 per cent in Western Australia (36.3), Queensland (31.3) and Victoria (30.4), according to the 2021 Rural Bank Australian Farmland Values report.
Tasmania has the highest median price in the nation at $14,730 per hectare, followed by Victoria at $10,583 and Queensland at $6,827.
Agricultural financial consultant Greg Bott has never seen the property market “so buoyant” in his four-decade career.
“Land prices are going up at an alarming rate and commodity prices are going with it,” he said.
Record-low interest rates, high commodity prices, strong demand and favourable conditions have all fuelled eight consecutive years of increasing farm prices.
As prices rise, so has debt with the Australian agriculture sector owing more than $83 billion, up from $70 billion in 2016-17.
Rising interest rates will increase the cost of servicing that debt while limiting how much first-time farmers can borrow to get their foot in the door.
Cost pressures pile up
While rising interest rates have sparked fears that home owners will start defaulting on loans, Nutrien Harcourts Tasmania director Michael Warren doesn’t believe they will break the farmer’s back.
“Because we’ve had four or five pretty good years now, a lot of our farming enterprises here have paid off a lot of debt,” he said.
“Or they have reinvested in their farming property. So we’ve seen more water development, better equipment on farms.”
Mr Warren said a greater concern for farmers was the increasing cost of inputs such as fertiliser, which recorded a 128 per cent import price increase in 2021.
Mr Bott said the “pretty savage increase in costs” on the farm was pushing up food prices, and he expects “more to come”.
Life on the land still worth the sacrifice
While Wade and his wife Brielle are wary of future financial pressures, they don’t regret chasing their dreams.
Brielle wants her children to have the same memories of life on the land that she made during visits to her grandparents’ farm.
“For children, it’s all the learning and growing and exploring that I love about being out on land,” she said.
“When Wade was working away, we had sacrificed a lot of time together. So now we get to have that and he gets to be around for our children growing up.
“That’s the dream really.”
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