Options for surviving stock
Meat & Livestock Australia July 25, 2023
Once the immediate urgency of the post- fire period has passed, you will need to make short-term decisions for recovery. At this stage, avoid choices that would permanently change the future direction of your livestock enterprise. Where possible, delay major long-term decisions until recovery is established; focus on short-term issues that address the welfare needs of your stock and give you options once your initial recovery efforts are established.
Financial advice is extremely useful as you begin making decisions. The Rural Financial Counselling Service is an Australian Government initiative that provides free, independent counselling to eligible farmers, including fire-affected farmers. A counsellor can help you work out where your finances are at and what your options are. For more information and to find a counsellor, visit the Rural Financial Counselling Network website: rfcsnetwork.com.au/ or phone the national information line on 1300 771 741.
Making informed decisions
With regard to surviving stock with insufficient grazing pasture, there are three main options:
Keep and feed some or all stock.
Temporarily agist stock off-farm.
Sell stock and buy stock back when pastures are ready for grazing.
If many of your livestock were destroyed and suitable infrastructure and labour is available, you may choose to buy replacement stock before rain stimulates pasture growth, supplementary feeding these animals until pastures can be grazed again. Buying replacement stock early and feeding may be better value than waiting until pastures are ready to graze, when livestock may be much more expensive, but can be risky if expected rains do not eventuate. Opportunistic production feeding, such as for trade lambs, may also be considered if budgeting indicates an adequate profit margin can be generated.
Take care not to take on more than you can manage, and carefully assess labour requirements before making these decisions.
To determine the appropriate option for your situation, consider the following:
- Do you want to take on the work of retaining stock alongside your other recovery activities?
- Are the necessary human resources and infrastructure available to contain, feed and water stock? If not, can they be quickly sourced or built?
- What is the livestock value now? Is the market low or high?
- What is the livestock value likely to be when pastures are ready for grazing again? Will you be able to afford to buy back in, and is the cost appropriate for your business goals?
- If considering selling stock, what short- term opportunities exist? For example, can you expand a cropping enterprise in the meantime while stock numbers rebuild?
- What is the expected cost of feeding in the best-case and worst-case pasture recovery scenarios, and does your business have the financial reserves to allow feeding in both of these?
- Is agistment available, and if so at what cost, including freight?
- What are the additional costs of running stock (such as animal health and activities like shearing) as well as extra income under each of the three options (keep, agist or sell)?
Make an informed financial decision by undertaking a short-term budget for the period of feeding or agistment as well as a cash flow budget for 2–3 years. Seek assistance if required, as sound financial decisions now are likely to pay off over time.
Keep and feed
When considering if you should keep and feed stock, be aware that the cost of feed and the amount of feed required can be hard to predict and will depend on when effective rainfall occurs. Long-term rain forecasts are rarely precise enough to make big decisions like this. Instead, use long-term rainfall records to help calculate the ‘expected cost’ of the most likely feeding scenario. Details for this calculation are provided in the next chapter ‘Calculating the expected cost of feeding’. Once the expected cost of feeding is calculated, undertake partial budgets for each stock class to determine if feeding or selling is the right strategy.
Once you have carefully decided to keep and feed, you should:
- review the locations available for containing stock, including water sources
- calculate feed budgets for different stock classes
- identify where you can buy feed
- consider how to feed out.
Feed budgets can compare different options for feed, including grain (which can be a cost- effective way to meet energy requirements) and pellets (where ease of feeding should be weighed against the cost per tonne compared to grain) as well as straw, hay and silage. Once you have chosen a feed type, calculate how much feed is needed for each stock class being kept. If you are not experienced in calculating feed budgets, seek professional assistance.
Ideally, use an existing sacrifice paddock or containment area for feeding out. Alternatively, establish a temporary area using the guidelines provided in ‘Bushfire preparation: Livestock management’. Often, availability of suitable water will drive your decision about where to keep stock. There are many resources available from state government agriculture departments and independent advisers about setting up and managing livestock in confinement for drought, and the principles are the same after fire.
Agist off-farm
Agistment is a useful option to retain the genetic value of your herd and avoid the changeover costs of selling. Assess cash flow and cost of transport and check whether insurances will assist with agistment costs when making this decision.
Cattle agisted in distant locations may be exposed to diseases they have not encountered before. Consider whether vaccination or other risk management strategies are required before transport. Protect your farm biosecurity by quarantining returning animals. Your refuge paddock is a useful location for quarantining livestock. This will minimise the risk of introducing disease, particularly if you have susceptible stock that have remained on-farm, and limit the introduction of weed seeds.
Sell
Selling stock may be an attractive option to increase cash flow and reduce your stress in the short term. Retaining all stock during farm recovery is a significant, resource-intensive undertaking, especially if infrastructure is not fit for purpose. However, selling stock immediately can be detrimental to business recovery in the longer term. For example, you may find yourself understocked or having to buy stock back in at high prices that exceed what it would have cost to feed the surviving animals through that period. In interviews with producers affected in the Black Summer fire season, most who sold their stock did so because feeding stock was not a viable option.
Selling stock has several potential drawbacks, including low sale prices, non- compliance with meat quality program requirements, loss of the stock’s genetic value and uncertainty about what the buying options and price will be later when purchasing replacement stock. Being understocked can have serious, long-term impacts on the cash flow and profitability of a business, as well as opportunity costs; for example, if pastures recover before you have restocked you will be unable to utilise them. Transporting stock out can also be challenging if road access is limited or facilities to safely load are not available.
Most producers who sell stock after a fire intend to buy back in once pastures have recovered or keep more young stock in subsequent years. Therefore, demand and prices can be high if good rains following fire cause many producers to restock at the same time. Alternatively, retaining more young stock and reducing the number of older stock culled can rebuild herd numbers, but can slow your herd improvement. Consider these consequences before you sell.