How to navigate the year ahead

How to navigate the year ahead

Agribusiness
Aa

When considering the year ahead, consider all the potential scenarios that could unfold and how you could manage them.

Aa

If Dorothy Mackellar were alive today, she may write "of droughts and flooding rains", plus bushfires, pandemics, record prices, record crashes and the infamous 2020 Australian toilet paper debacle!

What does all this mean for agriculture and how do we navigate our way through the year ahead.

My first suggestion: do the obvious and take care of yourself and those around you. Do the basic things you all know - wash your hands regularly, be hygienic and eat healthy foods to keep your immune system strong.

My second suggestion: don't expect logic to prevail. Fear is running rampant and influencing the way that society is operating (e.g. toilet paper...). I would just accept that and work with what you can.

I feel agriculture could ride out this storm better than most industries.

1. People will still need to eat.

2. We are used to 'lumpy' income and long periods of no cash flowing in.

I agree with the idea that our main concern is going to be a supply issue, not a health issue. The supply issue is affecting both our ability to access goods (through lower production or transport issues) as well as our ability to sell our produce (eg transport or international trade embargoes).

When considering the year ahead, use scenario planning - consider all the potential scenarios that could unfold and how you could manage them. This is instead of trying to predict what will happen - nobody knows that.

What inputs do you rely on? What would happen if you couldn't access them? It is worth giving some thought to this to see if you can secure supply or consider alternatives should that issue arise.

What if you couldn't sell your products? What is your ability to hold animals or store products until you can sell them?

The key areas RCS will be working on with clients are production and cash flow forecasts with ongoing monitoring/updates. For grazing businesses, feed budgeting will be a critical piece of information to use when doing cash budgeting.

If your feed budget, operational plan and cash flow budget indicate you can ride out potential supply chain issues, then this will give you confidence to navigate your way through the year. No matter what happens outside your boundary fence, make sure you focus on managing your business well and don't get lost in the 'noise'.

Aa

From the front page

Sponsored by