Livestock is where the industry growth is predicted to be, in 2018.
Although the strength has remained across beef, lamb & wool this year, we were reminded just how harsh Australia’s climate and farming can be.
It’s a good time to revise your plan for the short – medium term. What are your skills, what is your passion, what are you good at it and what’s best suited to your area. Although there is no equation for this magic enterprise mix, it’s a great time as we head to the New Year to run some new and different combinations.
We all know agriculture goes in cycles, big highs and big lows. Unfortunately we are often hoping for another industry or area to have their down turn in order for us to receive higher prices. However, it’s about the bigger picture.
We ensure our assets are protected by using tools like trusts and companies, so why shouldn’t we encourage protection of cashflow. We are seeing many financial institutions are specifying that a business’s risk profile should ascertain approximately 20% of cashflow from a second enterprise, e.g. 80% cropping, 20% livestock. Could this cause producers to sway back to livestock production??
We are also seeing, that in a competitive landscape showing your preparedness to use budgeting tools can secure some great interest rates and give you back some control!
Victoria once rode on the sheep’s back and maybe it will again. With the continual increases in the wool market and the stable lamb market for Christmas contracts, it’s a good time to be in livestock. Also it's an even better time to take advantage of financial management software, run the scenarios on where you’ll be after harvest and complete projections for the next season. Xero & Figured make this process easier, so be one of the ‘37% of farmers nationally who will increase their investment in agtech in 2018.’ (Stock & Land, 2017).
Why not take the opportunity now and be one step ahead of your neighbour. Just like having wooly sheep at the moment- it’s a good feeling!!
Rachael Trickey is a Partner and Agribusiness Consultant at Mulcahy & Co Agri Solutions and can be contacted on 0401 645 968 or firstname.lastname@example.org
Bronte Gorringe is an Agribusiness Consultant at Mulcahy & Co Agri Solutions and can be contacted on 0401 882 374 or email@example.com