StockPlan—Exploring Management Options before Dry Spells and in Drought: 2. Case Studies Using Drought Pack, FSA Pack, and ImPack

Abstract

Objectives of this article were to present three case studies that were generated by producers who used decision support tools to assist them explore the financial consequences of management options before dry spells and in drought. Study 1 used Drought Pack to demonstrate the calculation of a break-even price to assist a group of sheep producers decide whether to “keep and feed” or “sell and buy back” ewes at the end of a dry-spell, which was anticipated to last 5 months. The break-even result based on the producers’ estimates indicated that in this case, they would be better off with the “keep and feed” option. Study 2 used Feed Sell Agist (FSA) Pack to assist producers determine whether they should “feed,” “sell,” or “agist” cattle. A sensitivity analysis of the buying and selling options was performed. The results from FSA Pack assisted beef producers decide that the “sell” option had the lowest associated risk. Case study 3 used ImPack to evaluate three options: “sell 10% of stock,” “keep and feed all stock,” or “sell progeny as weaners and keep and feed cows” for a mixed cropping and beef enterprise. A 5-year breeding herd re-structure was performed for each of the three options. The results from the ImPack analysis based on a cash-flow analysis indicated that the “sell 10% of stock” (i.e., sell 10% of self replacing beef herd) was a better option because it reduced interest payments early in the planning period and therefore assisted in reducing the overall debt.