ALPA Stock Talk | Drought tips for business survival

Governments must act before it's too late


Analysis
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This drought is real, and this winter is going to be really tough, so here are some tips for our Government.

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THE Inverell district, like much of eastern Australia is being gripped by the driest autumn in more than 100 years. We have a harsh winter and calving season approaches.

As most farmers gloomily take on this tough winter, it’s not a bad time to analyse our situation, and offer a couple of tips to our governments who are clearly hoping this drought goes away, while keeping their eyes squeezed tightly closed.

The latest Bureau of Meteorology outlook from July to September talks of little rain and warmer than average temperatures. The odds are slightly better approaching spring.

While I hope the BOM accuracy is as far out as it was with its incorrect positive early 2018 forecast, the reality is we are set for a tough winter as calving approaches in the state’s north.

One thing that is different with this drought, is that this time the cattle have real value.

Combine this with the fact most graziers have experienced their best financial returns in over 20 years, and beef cattle prospects on the other side of this dry are very good.

The EYCI is hovering about the 480 cents a kilogram mark and this level is almost 10 per cent higher than the five-year EYCI average. Quality feeder steers are making from 270c/kg to 320c/kg (liveweight).

Australia’ beef export prospects are good with growing consumption in the US keeping track with its growing inventory and improved market share in Japan, Korea and China.

The weather prospects are not great, identify and sell your excess cattle now.

I know that feed is expensive, but I encourage anybody that can, to protect their core breeding stock.

Every statistic that gave us our plus 600c/kg-plus EYCI during the past couple of years still exists.

I would like to finish with a couple of common sense tips for Governments.

This drought is real, and this winter is going to be really tough. Please don’t drag your feet, and consider the following options.

Introduce immediate fodder cartage subsidies for breeding females while the roughage can still be purchased.

In the past our Governments have introduced excellent policies regarding joint funding to build sacrifice paddocks and permanent water infrastructure. 

Fodder production and storage is an big expense, up to two or three years combined profit for the average farm.

Introduce generous tax rebates, let’s say 125pc, for production and long term storage of fodder such as silage, grain and hay.

The result will be an oversupply of fodder on most farms when this season turns. What a lovely thought!

Good luck to our fabulous farmers, this is a tough time. Remember, the future is bright, we just have to get there.

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