Is it a drought - or just business as usual? How smart farmers prepare for tough years
What defines a drought? Is it just about rainfall, or does it come down to how we prepare? In South Australia, dry conditions are nothing new, so why do some businesses survive while others struggle? Why do we continue to see record-breaking land prices, with auctions held as recently as last week seeing land in the (upper) mid north for $7,150/acre?!
In a season where some are cutting back, one buyer just made the strategic decision to invest significantly in land—even after one of the worst cropping seasons in history. It wasn’t a spur-of-the-moment purchase. It was a calculated, well-analysed move that factored in risk, long-term strategy, and the resilience required to back themselves.
This blog is about making smart, proactive decisions—rain or no rain.
Overthinking costs more than a bad decision
The biggest question is: what does declaring a drought actually achieve? Does it bring meaningful support, or does it lull some farmers into a false sense of security, waiting for assistance instead of adapting? Waiting for government recognition or financial aid isn’t a strategy. The most resilient farmers don’t sit back hoping for a handout—they take control, plan ahead, and make the tough calls early.
We also need to be cautious of becoming fixated on labels. Whether or not an official drought declaration is made, our focus should remain on taking action. Overanalysing the situation or waiting for external validation can lead to paralysis, preventing farmers from making timely and effective decisions. Regardless of terminology, the key is to stay proactive and adaptable.
Lessons from experience: smart decisions in tough seasons
The dry conditions of 2024 forced many farmers to make hard choices. Some recognised the warning signs early and took action, while others hesitated, hoping the rain would come. Here’s what we learned:
Selling livestock early – When pasture disappeared and feed prices climbed, those who sold early secured stronger prices. We made the difficult but necessary decision to sell our breeding Merinos—an emotional choice, but one that protected both our finances and animal welfare.
Managing input costs – Some operators stuck to their usual input plans, spending big on fertiliser and chemicals, only to watch crops struggle in dry conditions. Others took a more measured approach, adjusting inputs based on realistic yield expectations.
Financial sustainability over expansion – Instead of taking on more debt or making big capital investments, we focused on strengthening cash reserves and keeping the business lean. It wasn’t about standing still, but about being smart with financial commitments.
Avoiding analysis paralysis – Making an informed decision with the data available is far better than making no decision or waiting in hope. Avoiding analysis paralysis is key—while some farmers hesitated, unsure whether to take action, others made confident choices and moved forward.
What smart operators do differently
So, what separates those who thrive from those who struggle in tough seasons? It’s about proactive decision-making and strategic planning. As we move into the new season, the key to success is planning ahead—mapping out different scenarios, knowing your financial position, and having a clear strategy in place. Here’s what you can do:
1. Scenario planning
Map out different rainfall and financial scenarios for the season ahead.
Identify trigger points for key decisions (e.g., “If we haven’t had 50mm by May, we adjust our cropping plan”).
2. Build financial resilience
Focus on cash flow management and create a buffer for tough years.
Assess debt levels and avoid overextending in uncertain conditions.
3. Risk management
Adjust stocking rates based on available feed and realistic projections.
Be flexible with cropping strategies—sometimes a lower-risk approach is the best move.
4. Use structured decision-making frameworks
Remove emotion from the equation—set clear criteria for major decisions.
Work with a coach or trusted advisor to challenge assumptions and refine plans.
Drought or not, the principles remain the same. The best operators don’t wait for conditions to improve—they adapt, take control, and make decisions that set them up for long-term success. The question isn’t whether we’re in drought—it’s whether we’re prepared to face the realities of farming head-on.
Backing yourself: the $7,150/acre decision
This mindset of strategic decision-making is exactly what played out at a recent land auction in South Australia’s (upper) mid north. Despite one of the worst cropping seasons in history, a buyer paid $7,150 per acre—a bold move that might raise eyebrows for some, but makes complete sense when you consider how smart operators think.
This wasn’t a spur-of-the-moment decision. It was a long-term strategic move, likely involving months (or years) of discussion, financial modelling, and risk assessment. The buyer would have considered:
Market conditions – Is land value still trending upwards?
Cash flow and debt servicing – Can the business sustain this investment in tough seasons?
Operational efficiencies – Will expanding the landholding improve overall business resilience?
Risk mitigation strategies – What if the next season is also dry?
Once they had crunched the numbers and assessed the risks, they backed themselves and took action. Now, the hard work begins—establishing a plan to make the most of the investment. And while they’ll be hoping for a solid opening break (which will bring both confidence and weeds), their success won’t be left to chance.
This is a prime example of strategic decision-making under uncertainty. Whether it's buying land, adjusting stocking rates, or rethinking your cropping strategy, the key is to assess risks, make a plan, and commit
Why farmers need a coach (not just advisors)
During uncertain seasons, having the right support can make all the difference. A business coach plays a different role from a trusted advisor like an accountant, agronomist, or financial planner. While advisors provide technical expertise, a coach helps guide decision-making, ensuring that farmers stay proactive rather than reactive.
A coach helps you:
Make confident, informed decisions in uncertain conditions.
Navigate financial and operational stress during tough years.
Capitalise on growth opportunities when conditions improve.
The tangible benefits of working with a coach include:
More clarity and direction – A structured approach to planning that eliminates uncertainty.
Better financial decisions – Avoid knee-jerk reactions that could damage long-term success.
Stronger mindset and confidence – Reduce stress and move forward with conviction.
Long-term sustainability – Build a resilient business that thrives regardless of seasonal conditions.
Strong businesses make strong decisions - what’s your next move?
Uncertain seasons test even the best operators, but they also present opportunities for those willing to think differently. Rather than waiting for a declaration or hoping for relief, farmers who succeed take control of what they can.
Smart operators know that:
Every challenge is a chance to strengthen their business model.
Proactive decision-making is key to long-term resilience.
Seeking the right support makes all the difference in staying ahead.
Drought or not, the farmers who thrive are those who plan ahead, adapt quickly, and focus on the fundamentals that drive long-term success.
So, whether you’re making decisions about selling stock, adjusting inputs, or—like the buyer last week—committing to a multi-million dollar land purchase, the principle remains the same: plan, assess risk, back yourself, and get to work.
Work with me through AgCelerate
At AgCelerate, I work with farmers to scenario-test decisions, stress-test financial plans, and ensure they have the tools to thrive—rain or shine. If you’re preparing for the season ahead and want to ensure your business is in the strongest possible position, let’s talk.
Book a free strategy session today. Let’s build a business that lasts—because farming is a long game, and the best players always plan ahead.