If Dorothy Mackellar were alive today, she may write ‘of droughts and flooding rains, plus bushfires, pandemics, record prices, record crashes and the infamous 2020 Australian toilet paper debacle’!
What does all this mean for you, and how do we help you navigate the way through the year ahead?
The department of health website is worth referring to for updates on health recommendations and travel restrictions (as are many of the state health departments).
We are monitoring the COVID-19 situation carefully and, given the nature and speed of change and adaptation required, have scheduled weekly decision points regarding our activities.
I see we have two main priorities: the health and wellbeing of everyone and providing our clients the support they need to achieve their goals during 2020.
We have cancelled some events (e.g. two Business Fundamentals Workshops) however where safe to do so, we will continue to deliver services, e.g. the Perth Farming&GrazingforProfit School started last week.
We will let you know immediately if any event is not proceeding. However, with less workshops being run, on farm or remote advisory work is available to help you keep your three-legged pot in balance. As always, we are here to help if you have any questions.
Due to the uncertain nature of the COVID-19 pandemic, we have made the difficult decision to postpone the RCS International Conference.
The health and wellbeing of delegates, conference partners, staff and families is our highest priority. This, along with the potential for restrictions on large gatherings to be extended into July, means postponing the event until a time where it can be enjoyed to the fullest by all is the most sensible decision.
We are now making plans for this event to go ahead at the Brisbane Convention and Exhibition Centre, July 17-19, 2021. We will be in touch with all ticket holders in the coming weeks to discuss refund arrangements.
What about you?
I feel agriculture can ride out this storm better than most industries.
- People will still need to eat.
- We are used to ‘lumpy’ income and long periods of no cash flowing in.
I agree with the idea that a major concern is going to be a supply issue. The supply issue is affecting both our ability to access goods (through lower production or transport issues) as well as our ability to sell our produce (eg transport or international trade embargoes).
When considering the year ahead, use scenario planning – consider all the potential scenarios that could unfold and discuss/develop strategies on how you could manage them. This is instead of trying to predict what will happen – nobody knows that.
What inputs do you rely on? What would happen if you couldn’t access them? It is worth giving some thought to this to see if you can secure supply or consider alternatives should that issue arise. Fuel and essential medical supplies are two that come to mind. Don’t get caught up in hoarding hysteria however.
What if you couldn’t sell your products? What is your ability to hold animals or store products until you can sell them? Just this week a client had to make a late change in plans after a livex ship was cancelled at short notice.
What about labour? Are you reliant on backpackers in your workforce? What alternate options can you consider?
The silver lining in all this is that many of you came into this summer with lower stocking rates due to last year. That and the markets took off like a rocket after the rain. This week we’ve seen that rapid rise start to reverse with saleyard and meatworks prices coming off. Roma store cattle sale dropped in all categories last week, however the yarding went from 2,800 head to 8,000 head so it isn’t a direct comparison. What will the market do in coming weeks? Historically, any market that has gone up as rapidly as this has dropped just as quickly. Have you capitalised on it or been a spectator?
It is worth looking at what the US cattle market has done. The futures market has dropped off a cliff.
A couple of key areas RCS will be working on with clients are production and cash flow forecasts with ongoing monitoring/updates. For grazing businesses, feed budgeting will be a critical piece of information to use when doing cash budgeting. For cropping businesses your crop flow and actual activities/progress will need to be updated and cash forecasts revised accordingly.
As with any other year, those businesses who proactively manage their resources will be best off. Forecast and manage your inputs, productivity, labour force and cashflow regularly and adjust as needed. If your feed/crop budget, operational plan and cash flow budget indicate you can ride out potential supply chain issues, then this will give you confidence to navigate your way through the year. No matter what happens outside your boundary fence, make sure you focus on managing your business well and don’t get lost in the ‘noise’.
Take care in the coming months and remember, we are here to help. If you need support with decision making, feed budgeting, financial analysis and forecasts, operational plans etc then book a session with your advisor. Oh, and watch this space for more developments from RCS in relation to learning from home!