Farmers doing it tough, but doing it well

While it’s important to highlight the hardship, it’s just as critical to remember our farmers are experienced at the business of managing drought.

Drought is a reality of Australian farming.

NSW and Queensland have experienced devastating droughts as early as 1895-1903, when sheep numbers were reduced by around half and cattle numbers by more than 40 per cent.

Average wheat yields dropped to 2.4 bushels an acre at their lowest.  

At August’s AqQuip field days in Gunnedah last month, in a region that hasn’t seen decent rainfall since October last year, or longer, the mood was mixed, but there seemed to be an underlying current of optimism.

Similar sentiments could be heard at the recent Henty field days in southern NSW.

Being prepared starts on the farm and farmers are using strategies like as crop diversification to ride out the drought.

They’re also looking for ways to secure affordable water and use it efficiently at a time when it’s both expensive and scarce.

While some producers have put major purchases on hold, there are others who have invested in gear such as overhead irrigators to improve water efficiency, retain moisture and finish crops.

Crop decisions are also being thought through more carefully.

Farmers with livestock face a different set of challenges.

When crops fail, there is a reasonable pathway to recovering losses with following crops at average yield.

There is short term pain, but it’s usually part of an expected and manageable cycle. 

However, the pressures of feeding livestock to preserve genetics and future incomes can be overwhelming.

So, too, is the potential of having to sell stock and buy them back later, at a higher price.

Forward planning and risk mitigation reward proactive producers who consider drought preparedness as an ongoing part of their business.

Examples include producers who filled their silos throughout 2017 when barley was as low $125 a tonne, cut hay and silage where surplus feed allowed, or utilised farm management deposits, all in preparation for tougher times.

Communicating with suppliers, partners and service providers is vital.

Service providers are here to help, and while farmers carry the direct pressure and responsibility, everybody wants to see ongoing, sustainable success.

Taking stock of a current financial position is a starting point.

Discussions with banking partners is an opportunity to declare what is most important to the business right now, and to consider short- and medium-term strategy.

Engaging more widely can also help ascertain what immediate financial assistance is available, to create time and space, allowing better farm and business decisions to be made.

Drought is undeniably difficult and it’s hard for most people to fathom what it’s like.

Some fare better than others.

But whilst there is no straight forward solution, the current situation doesn’t necessarily reflect the nature and prospects of the collective industry in NSW and Queensland.

Conditions can and will improve, we just don’t know when.

It’s a view well held across many farming families in the drought zones.

More than ever, communities beyond regional Australia have a better understanding of the current circumstances, along with a broad willingness to contribute – from individuals to corporates to government and beyond.

At a bank level it’s a tricky time in many ways.

Many of our staff live and work in regional communities with our customers.

Fundamentally, we look to balance the current financial need, with the likelihood of long term success.

As droughts last longer, this balance is tested, but many farming families have passed this test before.

A bigger and better industry is absolutely possible.

It’s a matter of getting through the drought, and then focussing on all the things that will make the industry more profitable and more resilient to inevitable future challenges.