Don’t be a slave to short-term highs
WHAT IS a fashion trend?
With clothes, images of perfect models strutting the catwalks of Milan or Paris displaying the latest styles flood into our minds.
In sport, the blanket defence in GAA, Barcelona’s high pressing game in soccer and Connacht’s fantastically entertaining open style of rugby are all currently in vogue.
Fashion is defined as: ‘a popular style or practice’ and a fashion trend can be influenced by political, economic, social and technological factors; but when it comes to farming, what is in or out of fashion?
We all know the calendar year of 2016 has been difficult for all farming sectors, primarily because of poor commodity prices.
Yes, the weather has been difficult in the western seaboard, but in all other parts of the country the weather has facilitated excellent growth rates resulting in record tonnes of grass dry matter per hectare being grown on many farms.
Active farmers put development and expansion plans on hold, and farmers considering retiring by leasing or selling land deferred their decisions.
Then, the milk price turned the corner with a series of modest price rises, but more importantly is the promise of more to come all backed up by significant lift in futures market and the popular Global Dairy Trade (GDT) Milk Index.
It was as if somebody flicked a switch, the negativity of 2016 suddenly dissipated and was replaced by optimism for 2017.
Huge numbers attended the National Ploughing Championships, banks are currently experiencing an upsurge in finance applications, consultant and advisor mobile phones are buzzing again.
What is so different today versus three months ago?
How does a good idea in 2014 become a bad idea in early 2016, but it is now back on the table again as we head into 2017? Is this all just a fashion trend or is there real substance to farmer optimism?
Farming can be a lonely occupation with the early rising and late to bed routine creating 70to 80-hour working weeks, often with limited human contact.
Newspapers, TV, radio and social media are the lifeline to the real world, but media tends to sensationalise, particularly if news is negative, this can easily send a vulnerable farm- er into a tailspin of negative emotion.
Equally, excessive volumes of positive news can cause some farmers to overdose on the excitement, enthusiasm and euphoria surrounding something new.
Examples of this are the amount of new property builders and developers we saw during the boom and, to a lesser extent, the white gold comments in respect of milk on the removal of EU quotas.
The most important advice is not to make major decisions about your farm business when surfing the crests of highs or battling against the lows. ‘If you fail to plan, you are planning to fail’ said Benjamin Franklin, there is no better advice for farmers.
A clear well thought out plan for the farmer and the farm business will provide a clear path to follow when confronted with negativity and it will also help keep the feet firmly on the ground when tempted by the good times. In fact, there are four components to a good plan:
Long term Plan
Take a dairying example. In 2014 banks were budgeting at a milk price of 30c per litre for long term dairy expansion plans, they continued in 2015 and 2016, albeit with some jitters of late, but I have no doubt they will continue to do so in 2017.
Why? Because the fundamentals are still the same, world population is growing, there is an increasing demand for