07 Nov Farming Mayday to Payday
There is little need to recap recent rainfall events across various parts of the farming communities in Australia. For some it was just too late. For others, it was business as usual. But for many, their cropping (and livestock) enterprises were on the cliff face with pending failure in the absolute. Cyclical hints of a dry hot spring derived from a dry cold frosted winter was a simple deduction of historical anecdotal evidence. Then the ocean currents shifted, and rain fell. Congratulations to all those who were fortunate enough to be under the rainfall belt.
What was interesting to note from the observational deck was the definitive decisions being made whilst the season was in transit. In summation, it was impressive to witness solid operational decision making being undertaken with full commitment and accountability to ensure pastures were preserved and failing crops were cut for hay to preserve productive value.
On the flipside, perhaps what was a little underdone was the financial analysis of each decision being made. Impact on profitability, working capital requirements, business liquidity etc were perhaps, for many, unknown quantum’s until after the fact.
To have constructive dialogue with financiers, a demonstration of financial control and real-time reporting is necessary to attain a bank’s view on management credibility across all aspects of business. Banks need full visibility of their shareholders capital deployed in the farming industry, and putting systems in place to achieve this will add weight and value to your banking relationship.
Our objective is to create thought provoking discussion. I sincerely hope this small blog reaches out to promote incentive in incremental business improvement.