The Farmers Club

The “Club Notes” for Thursday, the 11th of April, 2024.

By Dwain Duxson

Industry effect of low prices

I read where Elders took aim at the BOM for their infamous declaration of El Nino last Autumn and how it caused panic, which drove the Livestock market down and had an effect on the company's profitability. I will let you decide whether it's blame-shifting by Elders, but for me, I think it did have a dramatic effect, and in it lies the lesson for us all. We've all had our chip at the BOM about it, so Elders are not on their own there. So the lesson for me is, yes, read these forecasts, try and better understand them and then don't react, or at the very least, don't react hard. It got me thinking about where the Sheep market is now after being in the doldrums for over 12 months. Low prices affect Farmers and eat into their profitability or ability to do business. Because the majority are making less money, they are less likely to invest in the industry, so the Sheep industry as a whole suffers. There is less investment in Genetics, the stud AI and ET programs are the first to go, the Woolshed upgrade is shelved to a later date, and the new Yards are cancelled. We might only scan half the Ewes. And for some it's enough for them to give the Sheep game away, fed up, had enough. So if 4 out of 5 Sheep Farmers aren't reinvesting in the industry, the industry progress suffers (and there has been alot of progress in the last decade) and will suffer for a period longer than the low prices exist. By that, I mean Farmers have to have confidence the recovery is here to stay. Where are your confidence levels in the Sheep industry right now, and are you investing or not? Reply to [email protected]

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