Sheep enterprise risks include season, price, human resources (labour), animal health and welfare, biosecurity, demographic (social), environmental, market and economic risks.
The degree to which any one of these is a threat to a business will vary according to location, production system, financial position, farm size, business resilience, and so on. It is critical each business does its own risk assessment to develop a risk management plan.
Risk management is about identifying and mitigating key production and business risks. When working through this process it is important to recognise business operators might have more control over production and business risks than they initially think.
It is easy to get caught up in thinking we can’t control the weather and we can’t control commodity prices. The more empowering approach is to recognise what we can control. Business operators can control enterprise choice, genetic selection, operational timeliness, pasture agronomy and how much summer rainfall they conserve or utilise. All of these factors are within a business operator’s control contribute to enhance business performance.
The farm business risk assessment template can be used to help identify major business risks. It covers the 12 most common areas of risk and poses questions that need answering when considering these risks. Because drought is common across all sheep operations, it is used in The farm business risk assessment template as an example of how the risk management principles should be applied. Many of the other risks assessed in The farm business risk assessment template require a more subjective approach, but the same principles (likelihood and potential impact) apply.