How do you prioritise risk?

Its vey common to hear how much risk there is in agriculture.  I know I hear the phrase “farming is a risky business” fairly frequently.  To some degree that’s true.  There are risks with the weather and the markets.  There are risks associated with production from diseases and pests.  There are the risks working with machinery, animals and working in isolation. 

However choosing to focus on the negative side of risk is also a risk.  Choosing not to do something, simply as a reaction to a perceived level of risk might actually be the wrong thing to do for your business or for yourself.

Lets face it; risk is part of life! There are risks with everything we do.  The way we manage those risks depends on our experiences, our knowledge of similar or past events.  It includes an appreciation of the situation and a decision to way up the possible outcomes of that response.  So risk management is something we all do!

In day-to-day life making risk management decisions needs to happen in our head, and often quite quickly!  However for a business, making risk management decisions on the fly, often leads to missed opportunities or costly mistakes that time and money to correct.

So how do you look at risk?  How can you plan for risks and develop a business structure that is robust enough to respond to risk and capitalize on opportunities that often come along?

One of the tools I find most useful comes from the work health and safety industry.  Called a risk score calculator, its basically a way to plot the level of risk to an activity or an event.

The tool plots the Likelihood of something occurring.  

There are five levels, from Almost Certain to Rare.  

The way I use these levels is to look at the data I’ve collected on the business.  Has it happened before, is it happening often, does it happen all the time?  In my mind, that’s the whole point of collecting data!

The second step is to decide what are the consequences of an event happening?  Is it Catastrophic – which if you prefer is an easy way to say if this occurs will someone die, or will huge losses occur?  And then through Moderate to insignificant consequences. 

When you determine that level it’s fairly straightforward to decide if the risk you are considering is extreme, high, medium or low. 

Effectively using this tool helps you prioritize your actions and future plans.  Extreme risks are the ones you need to fix straight away.  

Quite simply you need to consider what can you change to lower that risk?  Is it a change to the way you operate?  Is it a physical change to infrastructure?  Does it require you to invest in skills and training?

Setting priorities is a huge part of risk management.  You can’t do everything at once!  And while there are always jobs to do, some of them are probably less important and can wait a while. 

I reckon the real value of using this tool comes from actually sitting down and having a rational and objective assessment of the situation.  As I said previously, your data will help you decide if the situation is likely to occur or not.  The consequences of the event help set its place on your list of priorities.

I’ve recently been working with a producer using this tool to evaluate the impact of weather extremes.  Their farm data shows clearly rainfall is coming in more intense events and the periods between rainfall is growing.  

The pasture data shows changes in growing days as well.  That data shows that it is likely they can no longer rely on certain species of temperate pastures to finish cattle for their traditional market. 

The consequence of that is major impact on the business.  The risk to that business is rated as High.  So we have been working to develop pastures that suit the changes recorded, with more sub tropical species introduced into the mix.  We have also started focusing on alternative markets so that cattle hit the specifications.

These are all big business changes.  But we are making them to respond to a clearly determined level of risk.  More importantly with my clients, we have a set of priorities to focus on.  In sitting down to discuss the ways to respond, we were able to look at opportunities and new directions before choosing the best option for this business.

It also highlights the importance of collecting good data.  I like using data to drive innovation on farm.  Responding to and lowering risk needs some innovative ideas!  If your data can’t help with those decisions, then you really do need to rethink how you are operating.

Over the next month I’m visiting several new clients to look at their programs and offer some advice.  One of my first questions will be how do you manage risk?  You can be sure we will go through this exercise and work up a few priorities! 

Don’t forget if you want a hand to help set your priority list in order or to look over the data you need, I’m always happy to come and ask the questions and get you going!

A few tips on fodder

I have to say I really do like fodder conservation.  To me being able to conserve pasture or crops and use it to top up a feed shortfall later on makes a lot of sense.  Storing fodder can also be a pretty cost effective way to undertake supplementary feeding when you compare it to purchasing other supplements and transporting them to the farm.  In my mind I like options that offer a chance to be more efficient and utilize on farm resources first, so making hay or conserving silage is always something I get a bit excited about.

I’ve spent a lot of time in the last 20 years talking to farmers about getting the most from their hay or from their silage.  Even though both silage and hay are commonly fed on farms throughout Australia, I’ve found that farmers don’t always consider the best ways to use these options in their programs.  So I thought it’s definitely worth spending some time to touch up a few basics on fodder, how to use it and things to keep in mind when you do use it to support your livestock.

I reckon it’s worth starting by asking you why you might choose conserve fodder? There are I guess two approaches to fodder conservation.  The first is to specifically prepare a crop or pasture to harvest and store as either silage or hay.  The other approach tends to be more of an opportunity to use excess pastures or a failed crop as a fodder source.  At least that way the resource isn’t totally wasted and you can get some use from it.

The difference in these two approaches is important.  Like anything, good quality hay or silage is the result of hard work.  If you have prepared your fodder source for harvesting – say growing a lucerne crop to make hay or silage, it will be of higher quality and have greater feed value than you might expect from pasture hay or silage.

So my first tip is if you are going to make hay or silage, the better the quality of the feed, the better the quality of fodder you will have.  It’s important to remember that the higher the quality of a fodder animal performance will also be better.  If you want to look at the economics, its actually much cheaper in the long run to make better quality fodder because the return you get in animal performance pays for its production. 

My second tip in regards to making fodder is to check the economics first.  I know I said a minute ago that conserving fodder on farm is often a cost effective strategy.  Well it is if you do it right.  That means again thinking about the quality of the fodder you are making.  If you are going to use a low quality feed source, so something that is low in digestibility, has a lot of dead leaf or stem and seed head as its main bulk then fodder you are making might not be worth much as a feed source, and so could really be a waste of time feeding it.  Or if you do use it, it might need another supplement to accompany it. 

All this means you need to plan your fodder making.  Consider what you will use and how much it will cost you to make it.  And what will you do with it when you have made it.  If you can answer these questions with a positive response then go with it. 

I think its really important not to overstate the capacity of fodder you are making.  Cutting a pasture or crop for hay or silage doesn’t automatically make it a magic feed!  If it is poor quality before you cut it, then it will be a poor quality fodder and so you have to recognize that before you get disappointed and complain about the process!

I have a few other tips to consider if you are making hay or silage.  Make sure you cut your intended feed source at the right stage of growth.  The more mature plants become, the less digestible they will be.  This means there will be lower energy values per kilogram of feed and as a result will be less valuable as a feed. 

Now I can spend a long time talking specifics about making hay or silage.  Instead what I will say is that for either form of fodder conservation you need to make sure you follow best practice by allowing the cut feed to wilt or cure before you bale it or collect it for storage as pit silage.  Its really important you work t the best practice as the longer you leave a cut feed source on the ground drying out, the more chance you have of having the feed you have grown loss its quality through decay.  You really need to get it baled, wrapped or stored properly as soon as you can.

I guess the big thing is to not expect your conservation methods to improve the feed you’ve decided to make into hay or silage.  Remember its only ever going to be as good as it was when you cut it.  And if you are a bit casual about the process of making it into hay or silage, well you’ll probably make it worse!

You should also think about what else could potentially be going into the bales you are making.  One of the big causes of livestock deaths is due to botulism.  Botulism is a disease caused by Clostridial bacteria and produces a toxin that can kill livestock very quickly.  The bacteria spores that cause the disease germinate in moist, low-oxygen environments such as rotting carcasses or decaying organic material. 

Most cattle deaths from Botulism are a result of ingesting preformed bacteria and toxins.  This can happen when cattle chew bones they may find in paddocks.  But it is often common in intensive situations like dairies and feedlots.  It’s a result of a decaying animal carcass being included in a role of hay or silage. 

So have a think about what might be in the paddock.  If you have any dead animals that might be in the paddock then it’s probably an idea to dispose of it rather than let it decay and potentially end up in a fodder bale.  You might want to drag it to another part of the farm to be buried or if its safe for burning.  Either way just leaving it to decay could put your fodder and more importantly your livestock at risk. 

Botulism can also be caused by poorly made silage.  It’s really important if you are making silage to minimize air pockets in wrapped bales and to seal pits well.  Rotting organic matter, which happens when air can access the material can create the right environment for the Botulism bacteria to produce.  In silage it’s often an issue if silage hasn’t reached adequate acid levels of pH 4.5 or less. This occurs when the level of soluble sugar in grass is insufficient to produce the acid necessary to preserve the silage. 

This means your harvesting is important, but also you want to make sure you plants are at the right stage of growth and you don’t leave it to wilt to long because the sugars will burn off.  At worst you can make it possible for botulism to occur, and at best you’ve just made an expense mulch or compost, and that really isn’t what you wanted to make!

The other thing to consider about hay and particularly silage is that if you bale up unwanted weeds, the preservation process wont destroy the viability of the weed seeds.  So don’t think you can use silage or hay to destroy weeds.  If it’s hot enough to destroy weed seeds your fodder is at risk of catching alight!  At the other end, if you are feeding a fodder that may have weeds in it, then Id suggest you be prepared for weed seeds to be capable of establishing a new foothold on you pastures.

That really brings me to one my last points about feeding out hay or silage.  Just remember the time, effort and money it took you to grow the feed, to cut it, bale it and store it.  Every kilogram of feed you make has a dollar value.  So don’t waste it when you feed it to your livestock.

There is nothing that frustrates me more than seeing a round bale dumped on the ground with half the feed being trampled into the mud, dunged on and ruined before it can be eaten.  Some really good research is available that shows how much hay you waste by feeding it on the ground. 

In general wastage is anywhere from 11% to 34% of the amount you are feeding.  The research say that the more hay you put out, the more you waste!  So if you dump a 200kg bale of hay or silage in front of your cows you can expect that around 60kgs will just be wasted. 

If you add the wasted hay or silage up over a 3-month period, you’ll work out just how much money you have thrown away. 

My feeding suggestions are to put your hay or silage into racks so that cattle or sheep can access it easily without wasting it by trampling, laying or crapping all over it!  If you are worried about weeds, especially if it’s a bought in fodder source, in that case I reckon you should try and confine feeding to a few selected paddocks.

The last thing, I guess its more just to reinforce my point about feed quality, is to make sure you know what you are feeding and adjust your livestock feeding program accordingly!  If you have made it form the best feed source you could grow, you preserved it and stored it well then you can expect your livestock to get excellent value from it.  But if you made it from a more ordinary pasture or crop, then you need to adjust your expectations accordingly.

If you do buy in hay or silage, ask questions about the feed.  I think its worth sending a sample away for testing for feed quality and then you will know for certain exactly what the energy and protein levels are.  I think it wont hurt to do that with your own fodder as well.  A test will help you set some benchmarks for your standard of production as it is.

If you are buying in fodder, especially silage, I’d also think about vaccinating your cattle against Botulism.  If you don’t know what’s in a bale, then it’s a good idea to protect your cattle before they start eating the feed.

Keeping out of the cold

How do you cope with cold weather?  Some people seem to cope better with cold weather.  After working in the New England region of NSW for many years, I don't mind the cold too much.  I find that I can always put on some extra clothes, find a pair of gloves and even resort to a fleece lined hat for those cold bleak days!  And on the days when it is too cold, wet or miserable to be outside, there are always things to do inside to stay out of the cold.

However, for your livestock, the cold is an entirely different matter.  Livestock are impacted by cold weather, and if cold conditions are accompanied by some rain and wind, the impacts can be fatal.

Many people think sheep are the animals that are the most susceptible to the impact of cold.  However cattle can be just as susceptible.  

Several years ago I was told by a producer about an experience where some cattle were imported from a station in north Queensland to the New England.  These cattle were brahmans just older than weaner age.  The day after they arrived a snow event occurred and sadly some animals couldn't cope and died.  

So cold conditions, wet weather, wind can all combine to have devastating impacts on your animals.  And unlike the northern hemisphere, bringing animals inside is not really possible in Australia.

Can livestock cope with cold weather?  The answer is they certainly can.  The process of rumination does help them cope, as the rumination process releases plenty of heat that helps the animal stay a bit warmer.  The other things that help animals cope are the condition that the animals are in.  Livestock in average or better fat scores will cope more easily than lean or low fat scored animals.  

Animals that are at risk are those that are in low condition. Young animals and older wake animals are also at risk, as are lactating animals or sheep fresh off shears.

So how can you help your animals cope with the cold?  There are a few things you can do.  These include:

• Provide hay for your livestock. Hay is slower to digest, which means the rumen will produce more heat as digestion occurs. This is especially important when the paddock feed is limited.

• Put animals in sheltered paddocks. If you have ever been in a paddock sheltered by some trees you will know the difference in temperature, particularly getting out of the wind. Grazing your stock in sheltered paddocks, with timber or protections that can reduce the wind chill will make a big difference to your animals.

• Avoid importing livestock from environments that not as cold! Livestock need some time to adjust to a new environment. They may not eat the new pastures, may be unhappy after transport and may have had time to explore their new home in time to find the sheltered paddocks or places in the paddock. Being hungry, cold and stressed places these animals at risk, and if they are young, weak or light in condition, the cold is a real threat.

• Draft your herd into fat scores. Its always good management to draft your herd so that you have them in similar weights and fat scores. The low conditioned animals, and the lighter ones need to be given particular care at the best of times, but during cold, this care is particularly important. These are the animals that should have first option for shelter and definitely need your attention.

Fortunately the cold weather in Australia doesn't last for too long.  Snow is an occasion and doesn't bury pastures for months on end.  The big risks are the cold windy days as cold fronts sweep up from the Antarctic.  I reckon we are also fortunate in knowing when these events are on the way, so there is time to plan ahead.  I reckon if cold is an issue for your stock, you need to think if you can help them cope more easily with hay and shelter.  And if you are thinking of purchasing or moving a few animals onto your place, I reckon if you can consider the traditional impact on cold and determine if it is the best time for your region and for your animals to do that movement.

If you're happy with all that, and you've helped your animals cope as well as they can, I reckon you've earned some time inside by the fire!

Getting paid for the value of your cattle

I'm often asked by producers for my ideas on ways to increase the income they receive for their cattle.  Getting a better return is something most people want from their cattle.  And along with the desire to make a better return, there is always some new idea or marketing strategy that someone wants to do because they have heard it will make them more money!

Sadly I don't think there is one simple scheme, breed or idea that will guarantee you will make more money!  In my experience the way to make money in cattle production is through a combination of work and focus.  And while most people work hard, the focus is often the area that is most lacking.

So what should you be focussing on?  The first thing is your market.  Australian beef markets are well defined.  If you are selling cattle to a feedlot or to an abattoir, both of these destinations can clearly describe what type of cattle they want to buy and they can say how much they are prepared to pay for those cattle.  

Despite these specifications being readily available, many people don't appreciate what a powerful tool they are in helping you make money.

Specifications provide you with target weights and fatness.  This helps you determine suitable growth paths on farm for your animals.  It means you can use your feed reserves and make grazing decisions that will direct your animals to a market end point.  This is the focus that many people need to have but often don't.

Sadly I often see people who put cattle into a market and those animals are overweight or over fat.  This creates a few problems.  Firstly the animals are out of specification, and so will be valued at a discounted level.  So instead of an optimum price per kilogram, it is sometime much lower than the animals deserve.  

Secondly it takes your feed resources, and therefore adds to the cost of producing those animals, to get them to the weight you sold them.  So not only are they worth less per kilogram, but you also wasted feed getting them to that point.  

I reckon a lot of people don't notice they are losing money.  The extra weight, even though it has a lower value, will mask the lower each animal has made.  So that producers often miss the fact their animals didn't receive the optimum price.

Focussing on a market specification, either for feedlots of for processing, helps set realistic work goals.  Decisions about grazing management, feeding programs and other tactical decisions become easier if you are working towards an end point. 

More importantly at a strategic level you can start examining your genetics and your herd.  Are your bulls helping you achieve the correct growth rates and level of fatness required by your target market?  Do you need to be selecting a different type of cow in the breeding herd?  

Are your pastures capable of supporting your growth program?

These are important decisions that can help you target your financial resources more effectively in the long term.  While in the short term you can focus on hitting a market specification that will return you the greatest return.

I recently worked with a client who was aiming for a specification for a feedlot.  The optimum price was for steers that were 400 - 449kg.  Over 450kg the price difference was 5c/kg lower.  Initially this didn't seem to bad, however we started to look at the feed resources we had to use.  The extra cost in this instance to get steers over 450kg, effectively worked out to be the equivalent of a 25c/kg discount!  We started to look at how we were growing those steers, and by aiming for an earlier turn off at the optimum weight we were able to save around $70/hd on the steers that normally would have been in the heavy category.  To wrap this story up in past years about 10 - 15 steers would always have been too heavy, so we saved around $1000 by making a few changes and staying more focused on the plan!

There is no doubt we had to work a little bit harder and change a few management practices.  However I reckon using resources more efficiently, and targeting a specification more closely, has helped realise better returns on farm.  

I reckon working with producers to be more focussed and efficient in their work programs has helped gain a better return for the clients I've worked with.  

When did you last have an objective look at your business?

How often have you stopped and taken the time to consider your farming business?  If you can answer that question, then I reckon you're a member of a pretty small group of farmers nationally!  When most people stop to think about their farm as a business, its around tax time, completing a BAS statement or as part of financial discussions. 

Assessing your financial performance is not just important, its vital for your business.  But its not the only thing you need to be assessing.  Every farm is made up of systems that contribute to the level of production and the financial returns your system producers.  

These systems are the obvious ones such as the livestock your carry, the pastures and soils that you rely on, the infrastructure that supports your programs.  Less obvious are the systems that bring it all together, your management skills, as well as the specialist skills that you need to manage your livestock, your pastures and soils as well as the specialist marketing skills you need when you look to make a return from your production.

So how do you assess if your enterprise is running to its full potential?  

When you are making your assessment, how objective are you?

The four steers in this 

photograph are all the same age, and were all from the same property when this photograph was taken.  The variation between the four of these steers is obvious in the picture.  

However variation like this is common across the herd.  The flow on effect of that variation impacted on sale times, sale weights and income on the steer and surplus heifer sales.  It also impacted on joining weights and the conception rates recorded in the fixed time joining that was being followed.

One of the problems in rectifying this situation was the owner was so used to seeing the herd, the variation was no longer obvious.  The flow on effects were being ignored or not addressed correctly, instead the owner focussed on other areas to manage.

I reckon the problem is that most people are so used to seeing their operation every day, they lose their ability to see the variations, or to be objective about the strengths and weaknesses that exist in their systems, and in their farm as a whole.  When you can't identify your strengths or your weaknesses, it makes it very hard to capitalise on the opportunities that exist for you, or to prepare for the threats that may be coming.

One of the key roles of the RaynerAg business is to provide producers with an objective view of their program.  Helping reduce the variation in a program is one practical approach.  But its not just about working through the cow herd and taking out the extremes!

More importantly, I reckon its my role to help identify the strengths and weaknesses that impact on the whole business.  And then to work with the producer to come up with a plan to use the opportunities available to be more productive and profitable, and to be prepared for the threats that could be coming.

If I can help my clients take a more objective look at their business, and to do that on a regular basis, I reckon I've done a good days work!

So if you're part of the large group of Australian farmers that haven't had an objective look at your business in a while, why don't you get in touch?  I'll be happy to help you see the variation and work out ways to fix it.

Are you prepared for a fire?

How prepared are you if a fire starts on or spreads to your farm?  As a firefighter, this is a question I think about a lot.  Last week my crew was called to a grass fire on some grazing land close to Tamworth.  The fire actually started with a car catching alight.  But it quickly spread to the paddocks beside the road.  

There were a couple of issues with this fire. The first was it was actually quite difficult to get to the paddocks to put the fire out.  

The gate into the paddock was directly below a large tree, so there was no way any vehicle, let alone a fire truck could drive through the gate.  

Secondly the paddock was being grazed by several horses.  The horses were panicked by the flames, smoke, noise and trucks.  I was very concerned that they would do themselves major injuries on the fence line as they galloped around the paddock to escape the fire. 

Fortunately we were able to cut the fence, extinguish the fire and allow the horses owner to calm the animals down.  But its had me thinking a lot about the impact of fire on larger holdings.  

How prepared are you for a fire?  If anything people are probably over confident in their fire preparations.  Every fire is different.  This is because the fuel available to burn, the temperature, the wind and the humidity are all different, and these impact on fire behaviour.  

I reckon its essential that every year you make the time to review your fire plan. The NSW Rural Fire Service has a great checklist to help you plan and prepare for a fire.  

Its called the Farm FireWise Checklist and Action Plan.  Its designed to help you think through the areas you should be preparing, so that if a fire does occur, you at least have some measures in place to protect you life, your animals, your home and your infrastructure.

For example have you thought about things such as what is the plan for communications if a fire starts?  Can you rely only on mobile phones?  What is the Local Radio or CB channel?  

How is access to your farm?  Where would you direct fire trucks to go?  Can they get into paddocks without having to cut fences?  Where are your water supplies?  Are you relying only on poly pipe laid across the ground?

In recent fires some producers fire fighting response failed because the poly pipe they were relying on melted in the fire. 

Where will your livestock be safe?  Can you move your stock to a location that has been cultivated or heavily grazed so that there is nothing to burn?  Is it safe to muster your animals, or will it be quicker to cut your fences and allow them to move to safety?

After the fire has been extinguished or it has passed your property you need to think about checking there is no further risk to your infrastructure, such as smouldering posts or material.

For your livestock what feed will you have to provide them with.  In most cases hay is the best option to provide to livestock following a fire.  This is because hay is more suitable for all classes of stock than grains, and it is more rumen friendly, meaning there is less risk of digestive upsets and illness among stock.  

You need to assess all your animals and treat those animals that have been burnt or injured.  The NSW DPI has a useful guideline to assessing bushfire burns in livestock and you should refer to this guide.

Hopefully you will never have to experience the impact of a fire on your farm or in your local area.  

Having said that, don't ever assume you won't be impacted by a fire.  Even worse don't assume that if a fire happens you can handle it without some preparation.

Taking the time to update your plan, make sure you know how to respond, where to go, who to talk to and what your actions will be if a fire occurs is going to be the most important thing you can do this year.  

If you do have a fire, ring 000 and put your plan into place.  I reckon if we all do this, its going to help save lives, property and stock.