LOVELOCK - This is the second article in a series dealing with drought management plans. As noted in the first article, this information comes from the "Managing Drought Risk on the Ranch Planning Guide," developed by the University of Nebraska - Lincoln National Drought Mitigation Center, which is available online at: www.drought.unl.edu/ranchplan.
Ranchers deal with two kinds of risk associated with drought. They are production risk and market risk.
Production risk comes from the fact that drought limits forage production and availability, which directly limits the total productivity of the operation.
Market risk is realized when those affected by drought act in unison and dump animals on the market in an untimely manner. This increases the supply and decreases the demand, which usually results in lower cattle prices.
To mitigate as much of this risk as possible, producers should have a drought management plan. Such a plan will not only specify all the options of demand and supply management strategies but may also use some form of insurance product where offered.
A viable plan needs to have several characteristics, including being able to identify key decision points. The following steps should be taken to develop a drought management plan:
1. Identify Planning Partners and Establish Communication - Involve key family members, business partners, and your banker, as well as advisers with knowledge of range management, business, and marketing in the planning process. Establishing communication between these partners early in the drought planning process will help ensure that a range of ideas and perspectives are openly discussed as you develop your plan.
2. Identify Ranch Vision and Objectives - Developing a ranch vision and strategic plan makes it possible for the manager to fit drought planning into this larger plan. The plan should focus on such areas as how the ranch operation will maintain natural resources (e.g., range health, water resources); production; financial health; customer relations; and lifestyle, learning and growth.
3. Inventory Ranch Resources - Resources include but are not limited too; average precipitation and timing, plant composition and growth period, pasture health/condition, number and class of livestock, AUs throughout the year, current and future feed needs, water capacity and water quality, ranch cash flow, debt/asset ratio, unit cost of production, market alternatives and family members' interests/abilities.
4. Understand Drought Risks and Benefits - You should understand the threats and benefits drought presents to your operation in order to identify appropriate management strategies.
5. Define and Monitor Drought - It is important to monitor key resources on your critical dates, if not more frequently, so that you have the information you need to make decisions. Maintaining precipitation and grazing records for every pasture are the most critical rangeland monitoring activities every year.
The following are key resources that should be monitored: precipitation, forage availability, range condition, livestock grazing records, livestock body condition and the financial health of the operation.
6. Identify Critical Dates for Making Decisions - One of the most important planning steps is identifying "critical" dates when management decisions will need to be made.
On critical dates, current and predicted forage/water resources should be compared to current and predicted forage/water demands (target points), and balancing steps taken (action plans).
For example, on June 1, if precipitation is less than 75 percent of normal and forage production is less than 50 percent of required feed, then reduction in herd size may be required before range health is affected and markets react to later herd liquidations.
7. Evaluate Management Strategies to be Implemented Before, During and After Drought - There are many strategies that you could use to achieve your overall objectives, and to reduce the impacts experienced in drought.
With a limited amount of money, time, and energy, you must determine what actions you can take now and in the future that are most appropriate for creating a drought resilient operation.
Here is a link that list possible drought strategies: "Drought Management Strategies for Beef Cattle," John Paterson, Rick Funston, and Ron Carlstrom, Montana State University Greg Lardy, North Dakota State University http://www.uiweb.uidaho.edu/extension/drought/1100/1130.pdf.
Also, during these tough times it is even more important not to ignore basic self-care and health habits.
8. Implement and Monitor the Drought Plan - As you implement your drought plan, question it: Is it working for you? Is it moving you toward your goals? Are you satisfied with how you managed through a drought using your plan? Would you make any changes to it?
If you are doing ongoing monitoring of your finances, range, and livestock, you will have a much easier time answering these questions, as you will be able to see trends appearing.
This article is just a brief overview of steps to take in order to develop a practical drought management plan.
As mentioned in step number one, you should identify planning partners and establish communications with them. Be sure to reach out for help, it will help you develop a useful plan with less stress and work on your part.[[In-content Ad]]
