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The agriculture industry is a dynamic and ever-evolving sector, with developments and challenges shaping its landscape. In this edition of Cheryl+Ned, we bring you the latest updates from various fronts, including substantial growth in Farm Management Deposits (FMDs), managing farming capital amidst rising interest rates, the implications of a natural gas shutdown, record-breaking grain trade, and a warning about tax season scammers. Join us as we explore these topics and provide valuable insights for farmers and agribusinesses.
According to NAB, Farm Management Deposits (FMDs) have seen remarkable growth, with volumes increasing by 29% in the year leading up to June 30, 2022. This surge can be attributed to positive business conditions and the rising interest-rate environment. Farmers are capitalizing on these favorable conditions by utilizing FMDs for tax planning and financial stability. The growing interest in term deposits is also contributing to the increase in FMD volumes, providing better returns and certainty amidst volatile rates.
As interest rates continue to rise, farming businesses face the challenge of managing their capital for operational and capital expenses. Exploring borrowing options is crucial during these times. Additionally, alternative cash boost measures such as Research and Development (R&D) Tax incentives are available for eligible R&D investments. The temporary full expensing measure allows for the deduction of the entire cost of eligible assets until June 30, 2023. Farmers should also consider the support and grants provided by the federal government across sectors like clean energy, carbon farming, job creation, and food security.
The recent natural gas shutdown in Esperance has posed challenges for local operator Esperance Quality Grains. While the shift to electrification as an energy transition blueprint for Australia has been widely discussed, the impact on agribusiness cannot be overlooked. This development necessitates innovative solutions and strategies to ensure a smooth transition and minimize disruptions.
Southern Ports has exciting news to share, with each of its three ports breaking annual grain trade records. Esperance port's grain exports have soared by an impressive 16.85%, from 2.91 million tonnes to 3.47 million tonnes. This record-breaking performance indicates ongoing market conditions and potential growth opportunities for growers. It's a testament to their hard work and the industry's resilience.
As tax season approaches, the federal government is urging everyone to stay vigilant against scammers posing as the Australian Taxation Office (ATO). Scammers may use various communication channels, such as phone calls, social media private messages, emails, and text messages. Remember, the ATO will never send you a link to log in to their online services via email, text, or social media. Be cautious and protect your financial information.
The agriculture industry is navigating both positive developments and challenges. The significant growth in Farm Management Deposits presents an opportunity for farmers to enhance financial stability and leverage tax planning strategies. Managing farming capital amidst rising interest rates requires careful consideration of options, incentives, and government support. The natural gas shutdown in Esperance highlights the need for innovative solutions, while the record-breaking grain trade at Southern Ports indicates market potential and growth opportunities. Finally, stay alert and be cautious of tax scammers during the upcoming tax season. By staying informed and proactive, farmers and agribusinesses can thrive amidst evolving circumstances in this vital industry.
NAB reports farm management deposits experiencing significant growth https://www.graincentral.com/news/agribusiness/fmds-spike-term-deposits-grow-as-rates-rise-nab/)
Managing farming capital: options, incentives, and government support
Record-breaking grain trade at Southern Ports
Natural gas shutdown in Esperance - implications
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