Cattle producers urged to spend 'in-between time' well

Cattle producers urged to spend 'in-between time' well

Beef News
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It hasn't rained feed, but many are confident it will be there

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WHILE the green tinge on much of the nation's cattle-growing country is a long way from banks of feed on hand, the rain has been enough to spur many back into the market.

Most have done so in a levelled-headed manner, with strong sentiment this is now 'in-between' time and more indication of both season and prices is warranted before all is invested.

But no one is advocating sitting back until everything is perfect.

There are patches still desperately dry and a far amount of country that was severely drought-affected where even the 100mm that has fallen won't be enough to generate feed.

The drought is not broken but the fact restockers are active indicates they believe they can grow grass, experienced agents say.

The reason some have gone hard early is that this rain has arrived at the best time to grow grass in Queensland and NSW, they said.

There is an element of taking a punt on more coming, and getting in before the shrinking pool pushes prices even higher, but mostly those active at the saleyards now are confident they have received enough to get going again.

Finance experts said those who sold down early had been sitting waiting to buy back in on rain and the low interest rate environment has encouraged quick action.

For those who've missed out so far, at least the rain is providing good money for what they have to offload.

It doesn't rain feed

Pasture experts explained that even where big falls have arrived, properties severely droughted will struggle to grow sufficient feed without follow-up rain, particularly if there weren't any tussocks in the paddocks and plants have to grow exclusively from seed.

Northern Australia livestock management consultant Désirée Jackson said the soil moisture profile has to be built up to support pasture and grass growth.

Infiltration of rain would depend on how severely affected by drought a property has been.

"Some have feed now - there are areas where beautiful buffel grass is growing, having responded well on lighter soil where there has been sufficient rain," she said.

"For others, who have suffered through long-term drought, falls of 200mm of rain all at once will result in a lot of run-off and erosion of top soil.

"Subsequent rain will be needed for many areas before there is sufficient feed to carry livestock through to the end of this year's dry season.

"The tricky bit is once the soil temperature drops below 14 degrees Celsius, tropical grasses no longer grow, so by the end of March there might be some herbage grass growth in response to rain but no longer the possibility for tropical grasses.

"That means producers really need rain this month for any sort of recovery to begin."

Ms Jackson said by and large, most cattle producers in the north would still be holding off on restocking to any large extent.

"People don't want to take the chance on needing to feed animals energy supplements again - they will want to have a body of feed available first," she said.

Big lessons had been learned about looking after country coming out of drought and people were conscious of not rushing in, she said.

Decisions

Bare paddocks present as much opportunity as they do problem.

From what to restock with to whether or not cattle should still be the main game, the decisions to be made from here are complex.

Business advisor Gordon Stone, Agri-Business Development Institute at Toowoomba, said an important first step for producers was a stocktake of where they planned to take the business from here.

"Our natural desire is to take action when things change for the better," he said.

"However, I've seen the benefit in a stocktake so many times. It's critical to get your key people around the table and work out a very clear, defined plan of attack, with a clear end point - that is profit levels sought, what product for what market and any adjustments needed in the business like bringing on the next generation.

"You're about to invest a lot of time, effort, blood, sweat and tears, not to mention money, so being clear on your plan of attack, with a preferred result, is essential. You don't want to be that guy or girl who discovers they've got the ladder up the wrong wall."

The next step is to run a scenario analysis. Work through detailed financials of a best and worst case scenarios of varied business options.

"Ask yourself questions like what would happen if, say, I went into sheep instead of cattle? Could I adjust who my customers are? Is now an opportunity to target just feedlots or direct-to-works or to look for some premium cropping niches. Is it time to hand over the reins to another person," Mr Stone said.

"Think of this time as an opportunity, rather than a problem. If you have destocked or run down your cropping input supplies, this might be an opportunity to make big changes to the business."

Thirdly, financier funding discussions are now far different post the Haynes Royal Commission, Mr Stone said.

"Financiers are increasingly seeking clear plans, demonstrated consideration of risk, financials that demonstrate considered thought and defined growth plans," he said.

"At times like this an 'outsider-looking-in perspective' from a trusted third party is valuable to provide some independent thinking.

"This might be your accountant, an agronomist or a good business advisor or consultant."


ALSO READ: All parts of the drought recovery juggle

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The story Cattle producers urged to spend 'in-between time' well first appeared on Farm Online.

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