You've got this

By Dwain Duxson.

Sorry for being a party pooper or dampening your day, but I just want to remind you that we are getting closer to our next drought.

That's a pretty negative way to start an article, and that's not my usual form. So let's see if we can prize out some of the positives surrounding the above statement.

Drought or dry periods can come in all different forms, localised ones, West or East ones, state-based ones, long ones, short ones, you get the picture...

This time I know we are all better prepared.

The last drought showed us that Livestock prices can hold up and give Farmers with Livestock an incentive to either keep stock or feed and sell stock at a reasonable price whilst in the grip of drought.

Some subscribe to managing stocking rate to carrying capacity theory, and in many cases, when droughts are severe enough, some might disperse all of their stock, and sit it out. But, if we all did that, then there would be no stock left. The more sensible approach, and many are doing it now, is to containment feed all breeding stock, or all stock for that matter.

After a drought, the demand for stock goes through the roof. This pushes prices up, which is great for the seller but not for the buyer. The risk of buying at a high price and not selling at higher price is always there.

As for stock numbers, droughts always reduce the number of stock in the system, which has a blessing in disguise scenario. The drop in numbers means there is less stock to buy post-drought, and that pushes prices up. When prices are up, we feel the need to sell. And as the world requires more protein and demand keeps increasing, when stock numbers drop, we never catch up again.

Each time we have a rebuilding period, like now, we never seem to get numbers back up to before levels before the next drought hits. Hence, the herd or flock doesn't increase as it should.

This situation means Livestock prices stay high as we are seeing currently. So droughts keep the prices high for extended periods of time post drought. And that's what I mean by it being a blessing in disguise scenario.

What about Grain and Cropping?

We are now better at conserving moisture. Years ago, if a drought hit, we would get nothing. These days most of us get something.

We all know what is happening currently where the planets are lining up for those that can produce a Crop. Price and yield combined is the ultimate, and in many cases, that's what happened last year. It could be happening this year. And even when the next drought comes along, getting something will be important because, like Livestock, the Grain prices might be still high.

I know for a fact that many New South Wales and Queensland Farmers bought Balers and other Hay gear after the last drought because they didn't want to get caught out buying expensive Hay ever again.

From a business perspective, droughts are about reducing losses. At best, work on breaking even and make your money in the good times.

How about Government help?. I don't know about you, but I act as though they will not do anything for me. If they do something or change a policy that will benefit my business, I treat it as a bonus.

It's like death and taxes. It will happen, so good luck when it comes your way.

You've got this....

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