Gus's Musings

May 11, 2019

Time to Restock??

When is the right time to restock, that is the question many are asking, they may have had a couple of rains, might nearly have a green pick, livestock prices are increasing?  There are always tempters to “pull the trigger” early, “shop early avoid the rush”.  “Imagine the story I can tell my mates in the pub buying ewes cheap before everyone else and then watching the price go up”.  The real question is; “When can I restock so that I don’t risk any more money (or heartache) and don’t degrade my land?”

Most farmers know their land really well, how much feed they need to have on it at various times of the year, “gut feel” of how many stock they can run, some of us even try to put objective measurement around that.  With this in mind most farmers would have a fair idea of when they would have enough grass to start restocking, though they might be tempted by stories from others….

The next thing is “are we at the end of the drought, or the next chapter?”  This is a bit more difficult to gauge, however we need a series of rains that start replenishing the soil moisture for us to be more certain.  We had a really good rain event in Dec 2017 (up to 100mm), on the back of that with the grass we grew we brought a road train of sheep.  Now we bought young ewes so we didn’t lose on them, we may though have eaten grass that our sheep would have been better off getting.

The way we would look at this issue is, primarily we are a grass based business, simple, no grass, no business.  The current price of stock and the risk of price rise is just “white noise”, we will look to fill our inventory with grass before any steps are made.  Now this will take some time, especially after our paddocks have been swept bare and we are going into winter, so no timeline is set.  Add to this we have had 1 rain event in a row of 12mm, so much more rain with regular frequency needed.  For us this dry spell started in November 2016, most didn’t have drought on the radar until the end of 2017, so we snuck into a drought, chances are we will sneak out.

When we grow grass we will reach a point where we have the combination of grass above ground and below ground (soil moisture), that will trigger a start into restocking.  We will look at restocking over a period of time, maybe 6-12mths and we may even look at agistment to fill a gap, especially if stock prices are high and there is a capital risk for us.  When we restock we will look at a range of stock, with an emphasis on being able to turn some over within 3-4months and start generating cashflow, this will also reduce our capital risk in the marketplace.

We have spoken to our bank last September to organise extra money should we require it.  We also keep in touch with our stock agent so he knows what we are thinking and where our grass is at.  As we use Maia Grazing for our record keeping we use a grazing consultant that we check in with monthly (Dick Richardson), so he knows where we are at.  Having your key business partners up to date on where you are at will mean the process to purchase stock, what type and how many will be well thought out.  On this note we are also members of KLR Marketing, so we have the spreadsheets to work out our trading margin on livestock.  We have all done Low Stress Stockhandling (LSS), so we are comfortable if we bring in stock that we can settle them down quickly and have them putting on weight ASAP.

There are many more factors about biosecurity and infrastructure that you also need to take into account when purchasing stock.  With biosecurity a quick call to your local LLS office (or similar) should be able to make sure you understand your obligations.  As we have done LSS we have the ability to make our infrastructure capable of handling most breeds and temperaments even though most of our fencing is 3 wire electric.  We have happily taken on dorpers, damaras, plenty of pastoral WA cattle and been able to keep them home and together.

So in closing the key point here is don’t be tempted by stock agents or mates to jump into the market as this may really compound your risk, which right now most farmers that have been in drought are in a very fragile state.  Another point is don’t worry too much about buying stock that you will breed from, there will be a succession for you to get back to having a good flock or herd, now we need to focus on finding low risk ways to turn our grass into money.  I would think that it would be a very good time to reassess your enterprise mix and so with a lot of really important decisions going on, having a livestock or business consultant help you might be a very good investment.

NB I’m not a consultant 🙂


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