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Managing livestock in dry times - Part 1

By Adrian Smith
Senior Land Services Officer
Mixed Farming Systems

November 2018

While some areas locally have seen above-average October rainfall totals, we are still in significant rainfall deficit if you consider the last 10 months or so.

We are unlikely to have a lot of feed on the ground heading into what may well be a long, hot and dry summer.

Many producers will have already established their plans for the next couple of months, or are in the process of doing so.

Murray Local Land Services has conducted a series of workshops recently to help livestock producers in particular understand better their planning and decision-making considerations.

Winston Churchill is credited with saying…. “He who fails to plan is planning to fail.” One of the most critical components in managing dry times is to have a plan of what you need and want to do. Once you have developed your plan, make early and decisive decisions, importantly, monitor the situation and change things if need be, and if necessary, revise some of your plans.

Be proactive, rather than reactive – and stay ‘ahead of the game’!

The over-arching objective of any drought strategy (apart from managing the welfare of your livestock), should be to ensure that:

a. Your farm business survives the drought and is in a position to get back into production after the drought

b. Your resource base – soils, pastures, capital, genetic merit of your herd or flock, and yourself, your family and your business relationships are all intact and ready to respond after the drought.

The most important thing you can do is to have a plan in place to help you in the decision-making process. Do an inventory of livestock you have on hand (and their class), what feed (in the paddock, shed or silage pit) you have, and from there you can determine what you need. Making informed, confident and timely decisions will maximise your options, and, importantly, will help remove some of the stress that dry times invariably bring with them.

For those with livestock, there are probably three main courses of action – sell (some or all) of your livestock, feed them, or send them away on agistment. There are implications to all three strategies.

Importantly, any decisions you make need to have an eye for the future – and what the short-, medium- and long-term impacts on your farm business will be.

When we look back to the ‘Millenium Drought’ of the late 2000s, it is interesting to compare current prices with those back then. For example:

Grain prices: Grain prices (wheat and barley) were around $400-450/t – similar to now

Hay prices: peaked at around $350/t – a little less than the $400/t we have recently seen

Wool prices: the Eastern Market Indicator sat around $10/kg – today it is double that at around $20/kg

Lamb prices:  the Eastern States Lamb Indicator sat around $3.40/kg carcase weight (CWT) – today it is nearly double that at $6/kg CWT

Cattle prices: the Eastern Young Cattle Index sat around $3.20/kg CWT, whereas today it sits around the $5.50/kg CWT mark.

You can read into the numbers what you will, and everyone’s situation will be different, but the reality is livestock prices are likely to remain relatively strong, and that provides some security (bar any extreme event beyond our control) that if you do decide to keep and feed our livestock, you will get rewarded when it comes time to sell.

Whatever decisions you make, understanding what your debt levels are likely to be is critically important. Be on the front foot with your financiers and keep them appraised of the decisions and actions you are considering. Understand what you can reasonably afford, what the impacts on your cashflow will be, and what implications these will have on your equity position in the medium- to long-term.

Many producers have seen, heard and experienced drought and dry times before. Every drought is different, and so too may be your response.

The best bit of advice is to develop a ‘plan of attack’ – understand what you have in terms of resources and mouths to feed, develop some clearly defined objectives, review and monitor how you are going with meeting or implementing them, and if things aren’t going according to plan, you need to reassess and change some aspects of your plan.

1. Plan your strategies early
2. Act quickly and decisively to reduce risk
3. Assess and reassess your position
4. Make sound livestock management decisions
5. Be alert for any opportunities.

And finally, seek some advice from trusted advisers, neighbours, those who have been through similar situations before, agencies and your financiers. There are many people and organisations who are only too willing to help wherever possible – even if it is just a voice on the end of the phone!