Beef's proven profit drivers king as market continues to plunge

That's the word from livestock farm consultants, as producers start to ask how they set themselves up not only for making it through a dryer period but to be ready to capitalise quickly when things turn.

Matching stock to carrying capacity, improving reproduction and managing costs per kilogram of beef produced - these are the key elements that drive beef businesses and they remain the same regardless of the peaks and troughs of the cattle market, consultants say.

Speaking at a webinar hosted by Agriwebb, consultant Mark Morton, AgriBusiness Concepts, acknowledged there was stress and anxiety at the moment, consistent with increased debt levels, higher interest rates and dropping commodity markets.

He said understanding your current situation, in terms of cash, grass and livestock, was critical.

That was the first step to having a plan for where you are going, and knowing what it would take to get there, he said.

The Agriwebb event looked extensively at producer confidence in relation to the big drop in cattle prices seen this year.

Mr Morton made the point that confidence both appears and disappears quickly.

The long-term outlook for the cattle game was positive, he said.

"At the moment, seasons to the north are challenging but to the south they are bright," he said.

Of course, there are patches in both regions that differ. In Queensland's Gulf country, for example, producers describe the season as the best they've seen in 50 years. While in Victoria's East Gippsland, conditions had turned significantly dry.

"But there are producers in the south who now have grass and are asking what they should do with it," Mr Morton said.

The idea that many were holding off, and letting opportunity go to waste, due to pending dry conditions was raised in the webinar.

"The only way to embrace the type of volatility we are experiencing now, and be ready to capitalise on the opportunities that will come, is to build intelligent systems to respond to signals earlier than what we have in the past," Mr Morton said.

"Knowing what you can quit and what you can accelerate is key to that.

"Having livestock on farm in a position where they are ready to produce - they are fertile, quick to market - that's what we can control," he said.

"We have our livestock in a position where they are ready to kick; and that's where agtech and livestock intelligence comes into play."

Also speaking in the webinar was acting National Livestock Reporting Service operations manager Ripley Atkinson, who made the point there was opportunity to diversify under the current market situation.

The dynamics between the wool price and the price of mutton, for example, were conducive to this, he said.

"The wool price has not come down to the same extent that sheep meat prices have so there is good opportunity in retaining Merino wethers for a wool clip," he said.

"You will get mutton value, skin value and a wool clip - that's three diversified sources of income. It's a good alternative to just a prime lamb enterprise under the seasonal conditions we are going into.

"In the 2018-19 drought, the percentage of Merinos within the flock lifted because it gave a diversification to manage risk and cash flow. Wool has been a pretty safe cash flow option."

Mr Morton agreed.

"The wool job has been consistently boring. It could underwrite a number of farmers' cash flow for the next few years," he said.