Put some fat into the system

"Cash is King"
"Save some for a rainy day"
"Stored feed is like money in the Bank"

All these statements ring true and in this world of "Instant Gratification". I believe we have moved away from the mind-set of caution, storing and saving etc. In farming, some sort of buffer is essential. Let's explore some of the issues and downside risks that occur.


If you have spent up to your limit and have no buffer, when things go wrong and there is a shock or an emergency in your life, you have no flexibility or room to move. Take for example the recent weather shock: if you have no financial space and you need to purchase feed or buy a generator, you have nowhere to go.

If you are short financially and miss a mortgage payment, even if that payment is made by increasing your overdraft limit, the Bank is going to get grumpy. Continued missed payments will see them ask you to find an alternative Banker.

I prefer to structure finance on the basis of having all your term debt plus your "working overdraft" in credit. Your total debt might be $1,100,000, but you have $100,000 of unused capital on deposit in the Bank. This enables you to have an immediate snapshot of the health of your business, ie. how much credit do you have? It will also influence you only to spend your credit and also influence you to increase it.

This I call renting the money. In this case, you pay interest only on $1,100,000 with $100,000 in credit at the Bank.


Stored and available feed is essential for shocks. In Canterbury for example all the grass and crops are buried under frozen snow and may remain so for up to two weeks. Ashburton was still -2° at lunch time the other day. Imagine having 1,000 cows, all your available feed under snow, no stored feed reserves, and baleage is $100 per bale if you can get it.

Then there are the animal welfare issues, not to mention farmer welfare. Stored and available feed is an essential part of any farming business, but our small country's temperate climate can be subject to weather shocks. These include snow, droughts, cyclones, flooding and power outages etc.


I come across the stresses and lack of caution in farming a lot with my work. Farming can be all consuming, with work requiring to be done at all hours, 24/7. The pressure of running the business, feeding the stock and paying the interest bill can be daunting. Unrelenting pressure will almost inevitably lead to overload, ill health and often depression.

Try and store up some extra sleep and energy for yourself instead of running on empty all the time. Adequate planned time off is essential. Even just taking Sunday afternoons off can be a bit of help to your mental wellbeing, let alone your relationships.

Relationship pressure often has at its core just a straight lack of meaningful communication. This recent cold snap has forced a number of feuding families to communicate, work together and sort out their differences.

Fuel and disposable reserves

Try to ensure you have enough fuel and disposables etc. stored. Are all your vehicle batteries tired? Does all your gear work, or will it all let you down through lack of maintenance when the pressure really comes on?

We all get closeted, feeling safe and secure in our own little environment, but if it all goes haywire and it will again, we need to be better organised. I am sure there will be a lot more wet-back fires and generators sold after this cold snap. Store some of the basics, i.e. potatoes, vegetables etc., so if you need to you can make soups and so on.

In summary, all farmers and kiwis for that matter need to think about being a bit more self-sufficient. We all need to build some "fat" into every system, whether money, stock food, human food, fuels etc., so that if there is a shock or emergency we can "weather the storm". And if you do feel overloaded and unhappy, go and find somebody else to talk to, because the odds are they will be worse off than you. The picture we have of our circumstances and life as we see it may not be the reality and outside help can be really valuable in getting a more balanced view.


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