AgriBusinessBusiness Advisory

Business planning for drought season

Chris Guillemot
18 October 2021
3 min read

18 October 2021

While the region has experienced some reasonable rainfall in certain areas in the past few weeks, forecasters are predicting another dry spring and summer for Central Hawkes Bay farmers.

Those that have been in the game for a while will be used to these events. While they do seem to be occurring more regularly, Central Hawkes Bay historically has always had its fair share of dry seasons.

It is inevitable that situations like droughts will be sent to test us, however, there is a tool every farmer can access to help manage this situation and that is business planning.

Business planning gives you the tools and mechanisms to help you cope with challenges and, although it’s not a silver bullet for all your problems, it will give you every opportunity to come through the other side.

The key to successful business planning

While any form of planning includes a certain level of assumption, the key to successful business planning is to be as well informed as you can when factoring in things like rainfall predictions, feed budgeting, alternative feed supplies, animal welfare and most importantly, personal wellbeing.

To help you access planning resources, there are a number of groups available to assist. These include local and regional councils, Beef and Lamb NZ, Rural Support Trust, Federated Farmers, trade suppliers (vets, stock agents, fertiliser company), professional advisers (bankers, farm consultants, accountants, lawyers) and family.

Planning for drought

When planning for events like drought, it is important to keep some flexibility in your plan but to also set decision making points so if certain things happen, such as specific changes to market prices, key animal weights or feed deficit, you can take the action you had planned for. Often, the most damaging thing you can do is nothing as indecision can exacerbate the issues.

Planning early is also essential. Accessing feed when everyone is short is a task and fronting to the bank needing an overdraft extension on the day your payment is due immediately puts you on the back foot. Don’t waste your time and effort by not being prepared.

Seek out experts who can help you

Having an objective third party who can advise you in areas that might not be your strength is an important strategy for successful agribusinesses and farmers. External advisers not only provide expertise into the business strategy but can help you stay on track and accountable.

For assistance developing or reviewing your business plan, speak with your adviser or get in touch with the Findex Accounting and Business Advisory team.

Author: Chris Guillemot | Partner

Chris has a varied client base that includes farming, manufacturing, and construction and is a specialist in agri business and company structures. Prior to Crowe Horwath Chris was an investigator for the IRD and is an expert in benchmarking, forecasting and profitability analysis.