Planning for the farm and business future?
21 December 2021
I am hoping that after the ups and downs of the past couple of years, some of our readers might have some time for a quick reflect about all the has happened in the past few years (drought, disasters, covid) and what it means for farm, business and regional futures?
What did you do well that helped you to survive recent droughts/disasters?
What might you do differently next time you are faced with these disruptions?
It’s time well spent for rural businesses to think about the recent drought and identify what might have been the strategies to help you and your business to best cope and come out in the best possible position for the future. Take some notes for now and for the next time…
If you are currently farming, then you are already an expert in on-farm decisions related to your risks. Below though are some of the links/tools that we’ve collated during the past few months that might be helpful in this planning.
In season planning
This is the type of planning most of us are used to. What is the climate and market outlook? How does it affect how much crop or feed to grow, livestock numbers in paddocks, choice of inputs and management strategies. Identify some dates at which you might make key decisions e.g. planting, fertiliser, buying in livestock feed, livestock health, baling crops. What opportunities are available at each date. What are the seasons and markets saying? How risky is each option? Which is best for your personal and financial situation?
- Bureau of Meteorology’s outlooks
- Weekly Northern Australian short-term weather forecast for the Northern Australian Climate Program, from Centre for Applied Climate Sciences (UniSQ)
- Monthly Climate Outlook considers the current phase of the Southern Oscillation index and other key climate indicators including output from leading seasonal climate modelling centres around the world
- Compare this year to previous seasons – Australian CliMate is still available and widely used on web (or app)
- Extreme climate outlook – You can use the BOM site to drill down to your exact location to see the likelihood of unusually, dry or wet, warm or cool conditions for the weeks, months, or even seasons ahead. Also see the BOM Heatwave service.
(Numerous other climate websites and apps are available.)
Estimate soil water in paddocks
- SoilWater app – estimates soil water based on soil type, fallow and crop options (iOS only) and was developed for the Grains Research and Development Corporation (GRDC) by UniSQ
- Calculate fallow soil water using FallowARM, a tool for those in northern grains region - New South Wales and Queensland, and a part of the ARM Online suite from the Queensland Government
You can use the above tools to look at different fallow treatments post-harvest for your situation– to see which ones contribute most to building soil moisture – e.g. maintaining stubble and also consideration of quick cover crops.
Livestock carrying capacity and pasture growth
Use the Queensland Government’s Long Paddock site to estimate carrying capacity including the AussieGRASS maps. These maps look at projected future grass growth. I checked the chance of exceeding median pasture growth to February 2022 using this tool (below):
Graphic of chance of exceeding median growth December 2021 to February 2022
(As at 20 December, 2021. To see this map, visit AussieGRASS maps and choose “Pasture Growth Seasonal Probability” from the Map Types option.)
Planning for the business
Regular checks and financial planning will help ensure businesses are making through unexpected changes – keep in touch with local adviser, accountant or bank manager. Resources include:
- business training – the Agri Business Development Institute offer many business training programs. Choose ‘Programs/courses’. Their Cash flow budgeting course is very affordable.
- NSW Department of Agriculture’s Young Farmer Business Program has a collection of useful resources available.
- plan and seek advice in recovery and hard times - CPA Australia has compiled resources to help businesses in disaster recovery.
- horticulture – Hort360 has a wealth of resources including seven webinars on how to prepare for and recover from disaster (choose ‘Climate’ under the ‘Resources’ tab and scroll down).
- crop gross margins - In Queensland cropping gross margins (to test input options and profits) are available via the Queensland Government’s AgMargins.
- grazing - FutureBeef provide economic recovery options.
Longer term planning
Succession planning is one longer term planning activity that many farm businesses are familiar with. In addition, is the planning around the farm’s future production and earning potential in the face of climate change and variability and other disruptors. This includes: enterprises and enterprise mix and potential for changes that might result in maintenance or improvements in productivity and profitability; contributing to improvements and maintenance of our natural resource base, and the environment and importantly our social wellbeing, particularly our social connections and our skills and capacities.
Some opportunities and further reading:
- DAF Farm Business Resilience Program (Future Drought Fund) - This program offers farmers access to subsidised learning and development opportunities in planning – for strategic business management, farm risk management and decision-making, natural resource managements, and personal and social resilience. Find out what is happening in Queensland and New South Wales
- horticulture - Hort360 Climate Risk Management Module can identify trends and considerations for your region and industry. Click on ‘Climate’ under the Resources tab
- grazing - read the case studies about drought planning and adaptation for grazing, cropping and horticulture on the Drought and Climate Adaptation Program website
- FORAGE - Another tool from Long Paddock, FORAGE enables you to access reports for your property about longterm carrying capacity, satellite imagery, ground cover, erosion and pasture and climate outlook. These reports may be useful in the future for long term planning, grant applications, or for working with consultants or financial organisations.
In addition to the above I’d like to highlight the excellent work of the Drought and Climate Adaptation Program at Queensland Department of Agriculture and Fisheries. Below I’ve included some key content from their program about drought preparation and recovery for grazing industries.
Key messages/lessons for grazing drought and disaster preparedness
Taken from the Improving Profitability and Resilience in Grazing Businesses in Queensland project, led by Queensland Department of Agriculture and Fisheries.
Steps in drought and disaster preparedness
- Identify and achieve optimal a) breeder body condition, b) herd/flock structure, and c) steer/wether sale age.
- Increase profit and build equity by implementing profitable strategies. For example, across Northern Australia the most profitable strategies for beef producers were consistently:
- addressing a phosphorous deficiency where it exists, and
- establishing adapted perennial legume-grass pastures to improve steer nutrition.
Responding to drought and disasters
- all classes of livestock should be assessed for sale; and
- consider the impact on profit as well as cash flow.
Recovering from drought and disasters
- utilise available grazing capacity as it becomes available via the purchase or agistment of stock
- rebuilding livestock numbers using natural increase alone (retained progeny) will reduce business viability
- agistment income could be good short term–low risk, and improves cash balances; and
- restocking through purchasing or trading cattle can be more profitable and therefore better for long-term recovery.
More detailed strategies and assessments are available in the project’s regional reports and FutureBeef.
The project has developed an excellent video presentation collection of their investigative decisions on the longterm economic implications of key drought and recovery decisions for grazing. Some are worth viewing just for the case study examples, including:
- Introduction and overview
- Situation analysis
- Mortality risk and early weaning
- Sell, feed or agist PTIC cows
- Send sale steers to agistment or sell early
- Assessing forced sales from within cow, heifer and steer groups
- Impact of the response strategy on recovery
- Options for recovery
- Incorporating climate variability.
Grazing spreadsheets to use – FutureBeef provide a range of spreadsheets ready to download and use.
What’s ahead from the Future Drought Fund
The Australian Government’s Future Drought Fund Climate Services for Agriculture tool can identify what future climate in a location might look like. Scroll down on their website for a demonstration password to access the tool, as currently this is a prototype, and the current four pilot regions includes the Condamine (Queensland) and Northern Tablelands (of New South Wales).
The Future Drought Fund Drought Resilience Self-Assessment Tool (DRSAT) will help consider a range of factors and impacts for a farm business (only a prototype is available at this stage, for feedback).
Want more opportunities to reflect and plan?
Are you an innovator or entrepreneur and want more information on not just the foundational business items but also personal development? You can view past WiRE (Women, Innovation, Research, Entrepreneurship) program recorded webinars and workshops here:
From the Future Drought Fund, there’s the adapting to a future with drought webinar series. Will rural communities and agriculture survive future droughts and climate change? Or can they, in fact, grow and profit from it? Via the Future Drought Fund, the Australian Rural Leadership Foundation is running an eight-part webinar series exploring this with panels of producers, industry professionals and scientists. View past webinars and sign up for those in 2022.
Here’s hoping some of these links might provide a useful connection for you in planning for your farm and business future. All the best to SQNNSW Drought and Innovation Hub readers for a joyful Christmas season and a productive, happy new year.