Billionaire Farmer Gerry Harvey Talks Making Money Farming | farm online
Gerry Harvey always wanted to be a farmer and even won a scholarship to agricultural college before a twist of fate made him become a multi-billion dollar retailer.
To pay for his education, he studied part-time and took up a job as a door-to-door salesman, where he met his future business partner, Ian Norman.
“I always thought that at 30 I would have enough money to buy my own farm,” Mr Harvey said.
“When I was 30 I was making so much money, if I became a farmer and I didn’t make anything it would be embarrassing, so I kept postponing.
“So at the end of the day, I kept opening stores because it was a thousand times more profitable than being a farmer for me.”
Even so, Mr. Harvey is undeniably now a farmer. He may not be involved, but his large agricultural investments range from cattle to cucumbers.
No stranger to the horse racing industry, Mr Harvey’s agricultural interests include Westbury Stud in New Zealand, with its hundreds of Thoroughbred brood mares and the Vinery and Baramul Thoroughbred stud farms in New South Wales. which are also home to a few hundred cattle in New South Wales.
He also owns a 500-head Angus cattle operation in Bundella in New South Wales, Security Foods with its decades-old Wagyu cattle business in Victoria and New South Wales, and a 5-hectare 30 million greenhouse. dollars in Peats Ridge, New South Wales, where 65 million cucumbers are grown annually.
Harvey is particularly proud of the productivity of the Peats Ridge facility, which he says is ranked among the best in the world, but it caused a stir among locals at first.
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“I drove there and on the messages it was ‘No, Harvey, no’ and I thought ‘What the hell is that?’ and found out there was a rumor that I had a marijuana farm,” he said.
“At no time, from my perspective, would Harvey Norman have a marijuana farm, they would fire me from Harvey Norman.”
No matter what farm business he’s talking about, the common theme is innovation and diversity.
So while agriculture has become the darling of the rich, this particular billionaire isn’t in it for the money. For Gerry Harvey, it’s simply for the love of agriculture.
He enjoys watching things grow, whether in his vegetable garden or on a large scale, and he enjoys seeing the best of the best in operation.
But there are limits.
“I lost $75 million on a dairy farm,” he said.
Mr Harvey invested $34million of Harvey Norman’s money in a joint venture with businessman Alex Arena in one of Australia’s biggest dairy farms, Coomboona, in 2015, as the financial press spoke of “white gold”.
“Coomboona made sense at the time because we went there with a guy who owned the property and had $30 million of his own money in there,” he said.
“He claimed he knew what he was talking about but unfortunately he didn’t and he got so many things wrong and at the end of the day it was just going to get worse so I just said, ‘Dude, we better unplug this’.”
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Coomboona was sold by the directors to the Perich family in 2018 for $40 million.
“He (the joint venture partner) wanted to be the biggest dairy in Australia with the best cows in Australia and in his defense he probably had 100 of the best cows in Australia, cows that milked over 60 liters a day,” Harvey says.
“He was right about that part, but his infrastructure, growth rate, and all sorts of other things were wrong. The building designs were wrong, he would have sworn they were the best in the world.”
The dairy mishap drew fierce criticism and sent the major retailer’s share price plummeting.
“I was one of the people pushing it and it was a big mistake,” Mr Harvey said.
“If you asked me, ‘Do you want to go on a dairy farm?’ now I would say, ‘I have no interest in going on a dairy farm’.”
Ag Profit Delay
Mr Harvey said in his experience that retailing generates much higher returns on investment than farming and that if he wanted to ‘make real money’ he would open another store instead than buying a farm.
“If you’re raising cattle or sheep, especially over years, you’re looking at very low returns for spending money,” he said.
“You might have $10 million invested in a sheep or beef business and if you’re making $300,000 or $400,000 a year, you’re fine.
“So there’s no money in it, but the money is in the appreciation of the land and certainly there’s a long-term proposition.
“I argued for years, 40 years ago, that land is too expensive, everyone is crazy, and I was totally wrong because, every year, if it does not increase, it levels off and go up a bit later.”
Doubts about the price of the land
While Australia’s record farmland prices had helped many farmers retire with unexpected wealth, Mr Harvey said, he believed it made new purchases less attractive.
“Is it a good time to buy a farm right now? I’m a bit shy. So when we’ve had three years of drought, that’s when I’ll probably buy another closed.”
Indeed, Mr. Harvey’s last land acquisition was a 16-hectare luxury property in Narooma. Webster Nolan estate agent David Nolan did not reveal the price but said it was a record for the area and exceeded the indicative range of 9-11 million dollars quoted during the marketing campaign.
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But Mr Harvey said it signaled no change in direction in his property investment strategy. It was the unique character of the land, a point surrounded on three sides by Wagonga Inlet with 1.2 miles of private water frontage, a jetty and guest cottages, that was its appeal.
“People are going to pay $50 million for a waterfront spot in Sydney Harbor but the water is much cleaner in Narooma,” he said. “Would you eat a fish caught in Sydney Harbour?
Despite these talks of coastal life and fishing, Mr. Harvey is quick to say that at 82 he is just as ambitious as he was at 22.
He thought farming was a great choice for people who loved the land and animals.
“Doing something you love is much more important than doing something for money,” Harvey said.
“If you’re making money and you’re not happy, what’s the point?
“I think it’s a wonderful way of life, but if you want to do it to make money, I would say don’t do it.
“If you like it, the way real estate prices are moving, one day you’ll probably sell the property and use it as a sort of retirement pension and still have a great life.”
Good times in farming can never be guaranteed, he said.
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“If you’re a farmer and you’ve had two of the best years we’ve ever seen, enjoy it because it’s not going to last,” Harvey said.
“It’s wonderful right now because you see so many tragic stories in the land of people committing suicide, and I know quite a few over the years, because you can go through seven years of drought and you don’t don’t earn money and it’s really a hard life and then you can have this wonderful ride.
“It’s a wonderful way of life when it’s good.”
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