Well it’s been a funny old November hasn’t it?
A later than expected start to harvest has been followed by some wet weather. Around the country there has been flooding in some regions, drought breaking rain in others and hail in some places.
It can be pretty stressful, even if you are feeling reasonably confident it will turn out okay in the end.
In our Farm Budgeting Masterclass we talk about how important it is to keep in touch with your bank manager at times like this. It does not matter if you are farming or contracting, or if your major financial partner is not the bank manager but your lover and soul mate, or your Mum & Dad. It helps with the uncertainty if they know what is going on.
With those nearest and dearest it is good to have a chat – Whilst saying “It’s all F&**ed” is probably true, it does not give anyone much to go on in terms of making or changing plans.
I think padding it out with a bit more detail really helps
eg “It’s all F&**ed and we will have to borrow more money to go again and get Dad out of the nursing home to go on the tractor”
or “It’s all F&**ed and we won’t be getting a new 300 series Landcruiser”
or “It’s all F&**ed and I really don’t know at this stage how bad it is. But we have been through worse and we will get through this”
Sometimes with more formal relationships, or if you are stuck for words, it is good to write things down.
So here is some wording you can cut and paste into a text or email, to break the bad news, share some good news, or broach the topic of additional lending.
My mother-in-law recommends the sandwich approach, putting the meaty bit between a couple of layers.
For the croppers
“As you would have heard, we have been badly hit by flooding in our area. We worked hard at getting what we could off and ??? of the crop is warehoused. At this stage it looks like approximately XXX % of our wheat and XXX% of our canola will be lost. There have been no stock losses/some stock losses. We are confident of meeting our financial obligations in the short term and will stay within our existing overdraft limits. We will meet with you as planned in January for our formal review where we will discuss our plans for 2022”
If things have not been so bad
“As you know there has been significant rainfall in our area. We were lucky to escape the worst of it and things have progressed as planned, we look forward to catching up in December”
Feel free to add in anything you did to alleviate the risk, if you did and if you could, like additional machinery or contractors etc. It is important to own your wins when you can.
If it’s just about timing
“Just writing to let you know that harvest has been held back due to late maturity. We are yet to commence harvest and will start soon. There will be a subsequent delay in income this year. Typically we would have cleared the overdraft by XXX and at this stage it looks like we will have to extend it to XXXX. We are expecting higher yields, though quality is still to be determined. We will keep you posted as things progress”
For those in the pastoral areas
” Recent rain has been fantastic as we have received ????? over the last ????? and we are looking to rebuild our stocking numbers as planned and are seeing good pasture recovery already. Unlike some in the area there has been little damage to infrastructure/some damage to infrastructure. Access to the property is currently restricted due to minor regional flooding and our planned sale of weaners in ??? will be delayed. This will mean that we won’t be able to meet our agreed loan payment of ???? in ????? until this stock is sold. Can we please book in a time to discuss this with you along with our plans for next year?”
If this has resulted in some cash flow issues for your business and you are not feeling all that confident on managing the issues yourself, give your accountant or Rural Financial Counsellor a call. They are very helpful and there are lots of strings you can pull in the short term to manage things.
For those of you facing down the barrel of downgrades or flood and the loss of what you had hoped was your very best crop or where the rain came too late, I am sorry. It’s ok to mourn it.
