Knife-edge season takes its toll

18 Aug, 2015 02:00 AM
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Naracoorte-based rural financial counsellor Charlie Goode says He said although buoyant livestock prices were giving producers more options they needed to have a handle of their feed on offer and make destocking decisions early.
Naracoorte-based rural financial counsellor Charlie Goode says He said although buoyant livestock prices were giving producers more options they needed to have a handle of their feed on offer and make destocking decisions early.

RURAL financial counsellor Charlie Goode welcomed the recent meeting of regional leaders at Struan to help South East farmers who were facing another dry year.

The Naracoorte-based counsellor said the SE season was on a "knife edge" with many regions tracking 150-200 millimetres below its average annual rainfall for the past 12 months.

"From the north of Desert Camp pastures are beyond repair, and south of Desert Camp, even though the feed is growing, the soil moisture is only around 30 per cent.

"If we continue to get showers for the next month or two we might be alright but everything is pointing to another dry year which is a huge concern, with many producers still catching up from the last drought."

He said although buoyant livestock prices were giving producers more options they needed to have a handle of their feed on offer and make destocking decisions early.

"A lot of lessons have been learnt from 2006 which is a positive but the address from Darren Ray from Bureau of Meteorology showed the trend line was down for the past 20 years so we have to adapt to expecting to get less rainfall in the growing season," Charlie said.

He encouraged producers to update their cash flows and communicate likely shortfalls with their financiers.

"People tend to go into denial and stop talking to their bank managers which is the worst thing they can do," Charlie said.

"Everyone is in the same situation and the season is outside your control so don't blame yourself."

He welcomed the federal government's commitment to extending drought concessional loans for the next 11 years but hoped the guidelines for the 2015-16 application process would be "relaxed a bit", particularly equity levels needed to be deemed a viable business.

"Banks assess risk differently in high-rainfall areas than drought-prone areas so it is much harder in the reliable areas to meet the criteria than people in drought-prone areas such as western Qld where banks require higher levels of equity to start with," Charlie.

Additional funding from the federal government will see another South East financial counsellor, Lachie Hood, joining the Rural Business Support team in late August to assist with the expected increase in demand on their services.

Lachie has a strong farm business consulting background with his experience at Pro Advice.

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    Catherine Miller

    Catherine Miller

    is Stock Journal's livestock editor and South East correspondent

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