Key risks

A business’ calendar of operations usually considers the seasonality of activities relevant to the location of the farm. Extreme weather events are highly likely to disrupt these operations. 

The four extreme events of most concern to farmers are extended dry periods (drought), extreme high temperatures (heatwaves), extreme low temperatures (including frosts) and extended wet periods. These can affect yield and quality, infrastructure and soil condition and health, cashflow, animal health and performance and social wellbeing. Each of these impact areas will be affected to different degrees by extreme events (e.g. extreme low temperatures may be of particular concern during flowering, extreme wet may be more disruptive during lambing/calving or harvest), and may require different tactical responses. Some tactical responses are more relevant in cases when the duration of the extreme event is prolonged. 

Extreme events can disrupt business cashlow and have flow-on effects on commodity prices. There are a range of possibilities that may create risks for some businesses and opportunities for others (e.g. if production in one region is impacted by drought, this may drive up prices, meaning regions unaffected by the drought will benefit). 

Tools such as farm management deposits or budget contingencies for unforeseen costs can aid a business’ financial security. Planning for these allowances can be part of a business’ strategic and tactical decision making. Ensuring ways of staying up to date with the availability of industry and government funding for extreme events is another way to manage some of the financial risks. These opportunities may involve funding for improving infrastructure, mitigating impacts of future extreme weather events, or recovery after an extreme event. These funding sources often lag an event or are not immediately accessible and can take time to move through regulatory processes. Such funding should not be relied on, and sound financial management with contingencies should be built into management of the business. 

Social wellbeing is another area that can be impacted by extreme events. Mental fatigue from dealing with challenging circumstances, particularly when these events are extended, is not uncommon. Enduring losses or traumatic experiences related to an extreme event can impact mental health and affect relationships. Seeking support early, by being aware of your emotional wellbeing and the wellbeing of people around you, is invaluable.

Extreme events can also cause workplace health and safety issues by affecting conditions in the workplace, including new hazards following extreme conditions. For example, a heatwave can impact both livestock and those having to work outside in extreme heat. Tactical responses such as early starts or finishes to the work during the hottest time of day, reducing the risk of heat stress. Ensure machinery is services so air conditioning is working. Leveraging the Bureau’s extreme event tools to allow prioritising repairs maintenance in the lead-up to a heatwave can make a difference. Extreme weather relating to bushfire risk can also influence work practices with some tasks, such as grain harvesting, not able to safely continue under high fire risk weather conditions. Other safety issues could involve the location of livestock, and potential escape routes, in case of bushfire (or floods). Having emergency policies and procedures in place, communicated, and understood by all staff can help mitigate risks and keep people safe during an extreme weather event. 

Understanding the extreme weather events your location and industry are susceptible to, is critical in planning and preparing responses for those extreme events. Establishing thresholds or triggers for your business can provide early warning to implement an extreme weather response ahead of its occurrence, and can potentially mitigate or reduce the impact.