A remote lifestyle, the growth of agtech and an essential product means the livestock industry is well placed to cope with COVID-19
Every day as I check the news and see the growing impact COVID-19 is having on Australia and the world, I am incredibly grateful to be part of the agricultural industry, and particularly the livestock sector. No one knows what the final effect of COVID-19 will be on our industry, but we do know livestock farmers are weathering the storm well so far, particularly at the farm gate. It’s pretty much business as usual.
Working from home requirements are changing industries across the world. Of course for farmers, every day is “work from home”, and their office is their land. They aren’t cooped up with tens or hundreds of co-workers or dealing with hoards of people commuting like a mob of sheep walking into water. Most people working on farms are either family members or staff that also live pretty isolated lives. This means a couple of things: it maintains business continuity and keeps the risk of contracting or spreading COVID-19 to a bare minimum.
Rural businesses that support our farmers, such as merchandisers and farm supply stores, also seem to be operating smoothly. It is reassuring to hear companies such as Nutrien Ag Solutions have protocols in place to reduce any risk of contraction and spread through strict hygiene practices. They did note that thanks to the recent rain in parts, additional demand has limited some chemical and fertiliser supplies, although they are increasing their orders to compensate.
Farmers are also taking precautions when it comes to people visiting their properties. I heard one farmer asked his agronomist not to visit him or the house when he does the pasture inspection, and to keep all communications online. Some merchandisers are adopting innovative measures like offering a drive-through service to customers. This has allowed farmers to order products in advance and pick their supplies up without having to enter the store and reduces contact between staff and customers. It has also proven to be a great time-saver.
In terms of the relationship between farmers and farm advisors, it is clear we are now truly in the age of digital agriculture. There are plenty of solutions available that connect farmers and advisors through cloud-based platforms, such as Agworld, to assist with crop recommendations. On the livestock side, AgriWebb has just launched the first version of its Advisor Portal, which allows mixed farmers to connect with their advisor, rural accountant or merchandiser. Not only do these solutions help with the current crisis by limiting human-to-human contact, but they also make communication and collaboration more efficient.
There is no doubt that crises such as COVID-19 force us to explore new opportunities. When this is all over, I think people will look back at the way they used to run their business and wonder why they didn’t make a shift much sooner. It reminds me of my Dad, refusing to buy Mum a microwave (back in the ’90s), as there was nothing wrong with the old stove. Of course, the week after he finally bought one, his response was “we should have had it years ago”.
As for other businesses in rural communities, some are smashing their sales. Electrical stores in regional towns have sold out of fridges and freezers as people are stocking up on food; sports stores selling out of home gym equipment, as gyms have closed and sporting activities have been cancelled. Local butchers and food stores are also having a blinder! They can’t keep up with the regional demand, let alone demand from the cities. I heard two buses drove from Adelaide to Jamestown (three hours away) and cleaned out the local supermarkets before heading home. Mind blowing behaviour! Many stores now are only selling to locals….
On the topic of butcher shops selling out of mincemeat, which has skyrocketed in price, it raises the question of what is happening with our meat supply chain. I asked a friend and valued customer of AgriWebb, Andrew Carruthers of ADC Commodities, who is based in the New England area of NSW, for his opinion on the current state of play.
As always, Andrew’s words of wisdom plugged a few gaps in my knowledge. He agrees the start of the food chain should not be impacted to a huge degree and it will be business as usual in terms of day-to-day production: people still need to eat, which means the market needs volume. We are seeing this with the rush on mince, and while restaurants are closing their doors, for the time being, the higher-end cuts of meat will be directed into other areas. We may see a price dip, but demand is still strong, which is overall great news. The major problems right now are bottlenecks in our supply chains, impacting meat hitting the supermarket shelves. A few examples of supply chain blockages and risks Andrew shared with me, which did not spring to mind, are:
In the domestic market, one of the most significant risks is in the trucking sector. And no, it’s not human resource related due to COVID-19 or delays in cross-border transit. It’s truck tyres!! With tyre production affected worldwide and a stock reduction in Australia, it could mean trucking begins to grind to a halt. The transport of live animals and meat would be significantly impacted, leading to major issues in the supply chain.
In the global market, there is a serious shortage of chiller/freezer space and freezer shipping containers. Freezer shipping containers are held up in ports and product is stuck in transit. This means there is nowhere to store meat as it comes out of processing plants. Some processors are cutting production to two-three days a week, as they do not have the chiller capacity. Again, this is not through lack of demand, but through the supply chain limitations.
According to Andrew, in Papua New Guinea, it normally takes 10 days to process import documents. Now, as two-thirds of the staff have been let go, the delays will be monumental. The knock-on effects and additional costs and delays will be substantial.
It’s clear that almost every industry will be impacted by the current crisis and for the most part, the impacts will cut deep. For our livestock industry, it seems that most impacts will be felt down through the supply chain, rather than directly at the farm gate. For many farmers across Australia however, my family included, the COVID-19 crisis has little impact compared to the ongoing drought crisis that continues to devastate farming operations. A changing supply chain is one thing, but if you don’t have rain, you can’t grow grass. And we all know what that means…
Successful farmers have always adapted to the unexpected changes they face, whether they’re caused by drought, fire, flood or commodity prices. The COVID-19 crisis is a powerful reminder that we must manage risk and understand the farm business and productivity drivers. For farmers out there who do not have a good handle on this, perhaps it is a good time to look into it!
There’s an old saying, “You can’t manage what you don’t measure.” If you are not measuring your farm operations and production, maybe now, as we head into uncertain times, is the time to look for a solution. Knowing your business inside and out will mean you can adapt to change and take advantage of opportunities as they arise. A good place to start is getting your record keeping in order.