Tactics to successfully manage through the drought

News Feature
For Immediate Release

January 2006

Sheep for Profit system reveals tactics to successfully manage through the drought

As drought starts to take hold again in some regions, Sheep for Profit is producing advice on successful business survival tactics, based on its growing database of information on farms' performances.

The experience of farmers using the Sheep for Profit system, in which farmers measure what is happening on their properties, backs up the view that it is possible to develop strategies to manage the major risks posed by adverse weather.

"We'll never control the weather, but we can develop risk management strategies to reduce the impact," says Sheep for Profit's Chris Mulvaney, of AgriNetworks.

He warns: "More farmers go broke when a drought breaks than during it.

"Some regions have more droughts than others so we can learn from the farmers who have developed successful risk management strategies."

During the 2003 Manawatu drought most of the Sheep for Profit farms scanned much the same as the year before, yet generally scanning was down 10 to 20%. Similar effects were observed in the drier regions of Marlborough and Canterbury.

"But because they are measuring our farmers are now positioned much earlier than others to make the important decisions."

Some key personal advice to farmers includes:

• Take care of yourself. Droughts can be extremely stressful, so take a break and,
• Make decisions early and stick to them
• Talk to others and ask questions, so you are investing in solutions not problems
• Stay positive – every day is one closer to the drought breaking.

Mulvaney says farmers who successfully get through droughts are the ones who

• Sell early and buy first This may mean selling surplus stock early when the prices are still high, buying in supplements before the price goes up, buying in stock before everyone else when the drought breaks.

"These farmers are always positioned to make money after the drought has broken," Mulvaney says.

In drought prone regions like Marlborough and parts of Canterbury the probability of drought every year is high so risk management strategies can be built into the "normal" farming operation.

The aim should be to have animal production systems organised and performing so the stocking rate is minimised by late spring early summer.

In other regions where the probability of drought is lower, planning must begin as soon as the signals for drought appear, Mulvaney says.

Mulvaney says there are many options but Sheep for Profit's experience confirms the real key is to know
• what is going on,
• which animals should be prioritised,
• key performance targets for all animal production systems.

"Good management is first about knowing what to do - and then knowing when to do it."

• By way of example, Mulvaney says a farmer needs ewes to be 61kg by 20 March. At weaning it is found that something like 40% are less than condition score 2, the average weight is only 57kg, there are 600 ewe lamb replacements and 2000 sale lambs not ready to sell.
• The ewes need to gain 4kg to be on target for next year's lambing, the ewe lambs need to be 41kg by May 1, calf weaning is still four weeks away and the summer brassica crop is starting to wilt.

Mulvaney says the farmer needs to sort priorities and get some "lines in the sand".

These are deadline dates where everyone sits down to review things relative to targets and to make decisions on what needs to be done to ensure the important targets are met by the next deadline.

"If there is doubt then act. Have confidence that the plan is effective and action it. Don't panic – and definitely don't procrastinate," Mulvaney says." Action whatever is in the plan (buying in supplements, selling all sale lambs, getting the ewe lambs out grazing, delaying ewe mating, not putting hoggets to the ram, selling bottom end ewes). And set the date for the next line in the sand. Don't be afraid to set weekly or even daily deadlines."

If capital stock is sold, the money must be used only to restock.

"The only way we can tell if animals are on target is to measure. The plan tells you where you want to be and how you will get there but the measuring tells you how it is all going," Mulvaney says.

Sheep for Profit research shows farmers least like adverse weather, while they most like finishing off good healthy stock and having some control over revenue.

While the system lifted gross income per farm by $67,752 above the national average from 2001 to 2003, in a pilot programme conducted on 50 farms across New Zealand, the experience since is showing up some good tactics to beat adverse weather events, like drought. (Please see accompanying article).

Sheep for Profit is now inviting applicants nationwide for its third quarterly intake.

Successful applicants each have a Sheep for Profit advisor. The measurement system they'll use helps them identify what's driving or hindering farm performance. Farmers set their own goals and can achieve significant rises in revenues and cash surpluses.

The current intake will close on January 31

Application forms are available now from Sheep for Profit coordinator Fiona Owen 07 872 0247. Those submitted after January 31 will be wait listed for the fourth intake, closing on April 30, 2006.

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