AuctionsPlus, 4 December 2019
AuctionsPlus accredited assessor, Sam Ditchfield, says he finds producers with planned trigger points on when to sell are less stressed.
With the worst drought in history rocking agriculture, growing debt and the onset of an economic downturn, producers continue to be challenged.
For Sam Ditchfield, an AuctionsPlus Accredited Assessor in the heart of New South Wales’ New England region, remaining stoic and positive are two traits he has endeavoured to maintain for the past year.
Based in Armidale, Sam is also a marketing consultant for Ebor Beef - a progressive group of cattle producers in the New England and North West regions of the State.
Sam, his wife Jules and their three children have lived much of their life in the area where Sam has developed an extensive network of industry contacts. This busy livestock agent says the ramifications of ‘chronic drought’ conditions for the past 12 months, coupled with below average rainfall over the past three years are starting to affect both stock and families.
“Stocking rates for many of my clients are very low with breeders down to about 20% to 50% of their original numbers,” he explained.
Many producers have made the hard decision to continue feeding stock until the drought breaks. But Sam says they may need to even continue feeding them for six weeks, or longer, once the break comes.
“The cost to keep breeding stock from March/April though until November has been about $1000 a head to maintain them in good production condition or, if they have been feeding for maintenance, they could have been spending up to $600/head,” Sam said.
“Many producers have high feeding debts, because they want to be in the position that when the drought finally breaks they have breeding stock left – and they are not completely out of the game.”
Despite the hard times, Sam was recently awarded the AuctionsPlus Inaugural Livestock Agent Award for assessing the most cattle in the 2018/19 financial year.
Sam was humbled by the award but saddened because it came with the knowledge that so many of his clients had been forced to sell their stock.
“It’s been tough, as I have worked with clients all the time trying to ascertain with them if they sell, or invest money in feed,” Sam explained.
“It has been an emotional journey and sometimes I have had to tell producers the worst-case scenario. Some fourth-generation families are suddenly having to decide to sell their family’s breeding herd.”
So where is the market at for these producers in New England and how do they make the decision to feed or sell?
Sam said it required honesty with each producer and setting out their options in black and white.
“I don’t hold all the answers, but I can tell them what to expect in terms of market prices and costs of feed moving forward,” he said.
“Even if it rains tomorrow, producers still need to be able to pay for another four to six weeks of feed, with some guys having to pay up to $7000 a day to maintain core breeding stock so they can meet a market.”
Stock feed has varied in price over the past year. Producers are now paying $400 a tonne for hay and $420-$430/t for barley.
When you look at the cattle market for drought times, according to Sam, it has remained very firm.
“A farmer for a 300-kilogram dressed beast going into the MSA kill market could return between $1800 to $1900 a head,” Sam said.
“Now a cow and calf sold to Victoria can make from between $1050 to $1400. With younger lines making up to $1400/head.
“It’s the unknown of whether the market will hold at these prices or fall completely if the drought continues along the east coast causing competition for our store cattle to diminish.”
In the meantime, you also have to be able to maintain your stock’s condition – otherwise they can become unsaleable.”
Sam says he tries to spell it out to producers – short and simple – that they must first understand their costs of production now, and what it could be until the drought breaks.
“For a lot of producers, it has been a learning curve, having to feed stock for so long after winter and the implications that come as a result of this, such as financial and emotional stress on the business and family,” he said.
Those who plan seem to be in a more stable situation. Many producers are working out a financial plan based on how much it may cost them to carry their cows from this spring until the unknown – when the drought breaks.
“If nothing happens in terms of rain by mid-November, they have a plan to either sell or agist their stock,” Sam said.
“It is those producers with a plan, and who know their trigger points and when they need to make the big decisions, that are less stressed and organised.
“For them it is about feeding for production and feeding towards an endpoint.”
Sam stresses that the drought could continue for an unknown period.
“You just don’t know,” he said.
“What is really heartening is the support network formed between the producers.
“Everyone is more connected than in previous droughts, thanks to social media and mobile phone technology.
“I am also seeing a lot more sharing of knowledge and ideas.”
For many years, mental health issues have been ignored by the robust producer, but with the drought continuing people are actively coming to each other’s aid.
Times are changing, and Sam believes even the “…toughest of tough farmers are now needing and wanting to talk”.
“There is no doubt that most producers are facing tough times right now, with not only the family business under pressure, but the families themselves,” he said.
Sam said he wanted to recognise the significant role the wives, partners and families were having in the key decision-making and the day-to-day operations whilst the drought continued.
At the end of the day – and drought - this award-winning AuctionsPlus Livestock Agent, intends to be there, continuing to listen and advise his clients, using his great communication skills and strong knowledge of the market.