Drought's impact a slow grind for farmers

Last updated 05:00 06/05/2013
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DEAN KOZANIC/Fairfax NZ
DROUGHT: The end of the big dry is a good time to take stock of its impact on your business.

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Farms can recover from drought only if farmers are at their peak physically and mentally, Massey University academics say.

Team leader Professor Nicola Shadbolt said drought might not shock the system like a flood but would slowly grind people down.

"Farmers are well known for their emotional resilience, their ability to make rational decisions despite what climates and markets deliver, but it can come at a cost," she said.

"Whether the drought has broken for you or not, now is the time to give yourselves a pat on the back, a treat, maybe a day off the farm, a chance to relax." Some of the effects of drought would continue for some time so it was important to take a break, regroup and plan for the months ahead.

Shadbolt is among a team with Dr Dave Gray and Warren Anderson helping farmers assess the health of their farm business after drought.

When farmers assess the health of their farm they need to examine its resources - the biophysical (land, pasture, crops, animals, machinery, infrastructure), economic (cash, assets, debt, tax, inventory) and human (farmer, farmer's family and staff).

The best decisions for the biophysical and the economic parts of the farm would be made only if farmers were in peak condition.

The drought's impact varies across farming types because of differing supply and demand dynamics.

While dairy farmers have reduced milk production, the overall supply of milk to the market can result in an increase in prices.

The next year's production can be protected if cows are fed adequately once dried off and heifer growth rates have not been compromised by the drought. Dairy farms will have to deal with reduced incomes and higher feed costs.

Conversely, sheep and beef farmers will have to deal with lower growth rates for stock and need to destock earlier than planned, and in some cases sell capital stock.

More stock heading to the market most often results in a decrease in prices, both in the store markets and at slaughter.

The following year's lambing is often compromised as ewes can be lighter going to the ram, so income that year is less and farmers face the high cost of rebuilding numbers in a sellers' market.

Sheep and beef farms may not therefore have as high a cash cost in a drought year as their dairy colleagues because of stock sales, but the impact of the drought continues well into the next year.

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Shadbolt said farmers had been making tactical decisions about feeding levels, the use of supplements, stock sales and purchases, the management of the distribution of live weight within stock classes and setting priorities in feeding levels.

Assessing their situation was the key to planning.

"Facing the brutal facts puts you in the right space to make the best decisions; setting non-negotiable targets, monitoring these and initiating contingency plans to ensure these are met is critical for surviving a drought," she said.

"Once the drought breaks, the focus is then on how best to enhance the recovery out of the drought."

Tactical decisions again play an important role and these are about the use of supplements, particularly nitrogen to improve feed supply. They are also about reducing feed demand through grazing off the main property and stock sales or the delay of stock purchases so that pasture cover levels can improve.

It is also about ensuring capital stock are protected so they are in good condition going into winter. Setting feeding priorities is important during the recovery phase, as is monitoring and initiating plans to ensure the farm recovers well. The focus of this phase is to ensure next season's production is not affected too badly by the drought so that the farm can again generate healthy cashflows.

The Massey team has drawn up an action plan for farmers to help them get their farms back in order. Lessons can be taken from this drought to ease the pain in the next one.

After monitoring the farm's performance, farmers could upgrade their water supply, shade and shelter, soil-fertility levels and drainage, pasture species, access to yards and weighing scales, subdivision by aspect and contour, animal genetics.

Further investment, if profitable, could lie in water harvesting or irrigation, specialty pasture species such as lucerne, chicory and plantain, browse shrubs and fodder trees and the harvesting and feeding out of supplementary feed.

Other options are to run buffer mobs of trade lambs and ewe hoggets that can be sold if feed conditions deteriorate. 

- © Fairfax NZ News

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