Farming as a Business: Moving Beyond Value Adding to Building Lasting Wealth

Podcast Summary:

In AgriCulture Live Episode 21, James Siggs of Siggs & Co. shares over 30 years of international farming insight, challenging UK producers to rethink their approach to profitability. While land values may look impressive on paper, many British farmers remain stuck in a cycle of reinvestment and poor cash flow. James urges a shift from simply adding value to genuinely creating lasting wealth by focusing on net cash flow, low-input production, and strategic use of core farm resources—land, sunlight, water, carbon, and brainpower. Drawing on global comparisons and regenerative practices, the episode offers practical guidance for breaking free from the “hamster wheel” and building a more resilient, prosperous farming business.

Here is a breakdown of the discussion from the YouTube video about UK farmers transitioning from value adding to wealth creation:

• Defining Value Adding vs. Wealth Creating: Many farmers feel like they’re on a “hamster wheel,” working harder without getting ahead [06:04]. They are constantly borrowing to reinvest in the next crop [06:43]. The focus should shift from margins and profit to net cash flow [08:12].
• Are UK Farmers Rich? It depends. Many enjoy their work and environment [09:14]. Tenant farmers’ wealth is mainly in livestock and assets [09:49]. Owner-occupiers have land assets, but historically, these only yielded around 2% per annum [10:11].
• How UK Farmers Compare Globally: The most profitable farming is palm oil production [11:59]. In the US, many farms are part-time [13:28]. Brazil has seen land prices double, with advanced no-till and bio-control practices [14:12]. Eastern Europe has large farms with good profits [14:55].
• How UK Farmers Can Create Wealth:
  • Make the most of basic resources: land, sunlight, water, carbon, and your brain [18:42].
  • Focus on what can be produced with minimal inputs [20:02].
  • Improve soil biology [21:12].
  • Consider examples like Salt Carbon Farm and Jake Freestone [20:27].
• The Role of Part-Time Farming: Part-time farming is common globally and can be a way to enter the industry [22:21].
• Diversification: Diversifying crops and livestock is key to maximizing the use of resources [25:00].
• Attracting Young People: Address safety concerns in the industry [25:37]. Recognize the value of part-time farming [25:58].
• Recruiting the Right People: It’s essential for building wealth [27:39].
• Steps to Start Wealth Creation: Assess farm assets [28:46]. Learn from others and read relevant books, like “Dirt to Soil” by Gabe Brown [29:03]. Determine what the farm can produce with minimal input [29:28].
• Next Big Issue: Climate change will impact what, where, and how things are produced [31:03]. Farms may need to revert to producing food, energy, fiber, and building materials, similar to 300 years ago [31:27].