In response to high input costs and an increased threat from variable seasons six groups of growers from marginal cropping areas on Eyre Peninsula and Northern and Yorke Agricultural District are taking part in a National Landcare Program funded program “Farming to Manage Risk”.  

Supported by the Advisory Board of Agriculture and run by Rural Solutions SA, planning workshops for this pilot program have been held with growers from Bismarck Valley, Nantawarra, Nelshaby, Buckleboo, Cowell and Tumby Bay.

Risk management can be seen as working within a certain set of parameters, the limits of which are specific to individual properties.  The program formalises the risk management decision making processes that growers go through daily.

Workshop participants identified the biggest risk factors to the profitability of their enterprise as; environmental conditions, increasing input costs, increased complexity in grain marketing, uncertain commodity prices and difficulties in sourcing labour.  

Michael Wurst, Rural Solutions SA (Jamestown) has developed a “Farming to Manage Risk” simulation model, which is used at a one on one property visit with each participant to evaluate the grower’s current farming system against a six key benchmarks.

This evaluation allows growers to identify changes they would like to make to their system and to simulate the profitability of the changed system on a range of production areas in varying rainfall years.  

A common goal for participants was to identify the best enterprise mix for different productions zones on their property in order to reduce the risk of cropping in poorer years but take advantage of the potential returns from cropping in better years. 

A key indicator of the risk of cropping is the “break even” grain price.  In cases where the model identified that production costs in a particular production zone outweighed potential productivity growers are seeking alternative options.  However in cases where properties (particularly smaller properties) are carrying high debt levels, risk management options are limited and often these properties are “locked in” to cropping a high proportion of the farm (at very high risk exposure) to service these commitments.

Many growers looked at changing their rotations, cropping higher production zones more intensively and sowing less productive zones to low input “opportunity’ cropping.  This gives them the flexibility to graze the paddock or change inputs as the season progresses without committing too much money to begin with.

Other management changes that growers have considered making as a result of participating in the program include, increased livestock numbers, varying input applications to soil type, expanding property size, alternative pastures, changing livestock enterprise, and storing grain on farm to increase grain marketing options. 

AUTHOR: Brett Masters, Soil and Land Management Consultant, Rural Solutions SA

CONTACT: Brett Masters, Rural Solutions SA Pt Lincoln office, Telephone: 08 8688 3407, Email: masters.brett@saugov.sa.gov.au