As a second-generation farmer, Clifford Mthimkulu of Mthimkulu Boerdery in the Free State has learnt that farming is not always easy, but if you follow your heart and the advice of experts, you will succeed. “My best financial friends are my bookkeeper, my bank manager and my agent. As long as I follow their advice, everything will be fine.”
Clifford runs a mixed farming operation on four farms, planting crops that will sell, running cattle, and ensuring that he has other sources of income for the slow or bad months.
“To make sure money comes in in the off-season, I have diversified by speculating with cattle, renting out transport, and having a truck for towing. These businesses can carry the farm when the going gets tough.”
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He has also built a feedlot. When there is not much to do on the farm, he uses the time to make feed to sell so that there is always cash coming in.
Clifford has a business philosophy around debt: “I don’t like it, and I don’t believe in consolidating debt. I would rather sell something (like a tractor) to pay off the money I owe.”
Clifford would like to pass on his family’s farm Astoria to the next Mthimkulu generation one day.
Financial Risk Management
Clifford’s approach to mitigating financial risk is to take out a loan with one institution. “This means that you travel the long road with them, and if you are in trouble, they know you and will help you. It doesn’t work to take out loans everywhere; you end up with too many irons in the fire.”
When it comes to practical farming decisions, Clifford takes a long, hard look at prices, the market, and what crops to plant. “It doesn’t help to plant what everyone else is planting because the price drops. I look at what people need and what I know will bring in money. I have 500 hectares under maize, 300 under sunflowers, and 150 under sorghum.”
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Long-term Goals
Clifford’s long-term goals for the four farms include irrigation. He has already fenced them and built two big dams. A longer-term goal is to plant 10 hectares of pecan trees.
Clifford’s Farming Philosophy in a Nutshell
1. Top financial lesson: “Save money during the good years; you never know what’s going to happen.”
2. Biggest financial mistake: “One year, I bought a bull I could not breed with. I learnt that if you buy a bull, you need to get its records; you need all the details. I shot and butchered it for far less than I paid for it.”
3. Succession planning: “I am a second-generation farmer; I took over from my dad and I will hand it all over to my children one day. I firmly believe in succession planning.”
4. Managing taxes and insurance: “I have a bookkeeper and insurance through Mutual and Federal, and Agriseker insures my land.”
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