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Managing in tough times

Written by Peter CPA

The following list comprises some of the major issues facing growers at this time:

  • Stricter supermarket specifications, and a forced reduction in canning fruit suppliers
  • A credit squeeze, with at least one bank already restricting credit to some orchard customers
  • Very low pear prices
  • Significant increases in the costs of fertilizer, chemicals and fuel
  • Historically low exports & a volatile Aussie dollar
  • Low-rainfall conditions in some regions, and restrictions on the availability of irrigation water
  • The impending WTO decision on import of fruit from New Zealand, and Biosecurity Australia’s consideration of import applications from China, USA and Chile.

We naturally tend to focus on the difficulties within our own industry, but ongoing employment layoffs and significant loss of corporate value indicate that many businesses in other sectors are also facing very challenging conditions.

---TOPICS in this article---

  • Getting personal
  • Understanding the current situation
    • A Statement of Assets and Liabilities—
    • Accountant’s Profit & Loss Accounts—
    • A Cash Flow Forecast—
  • Seeking advice
  • Meeting market expectations (packout)
  • Business costs
  • Government assistance
  • Funding providers: Look after your bank relationship in the good times and a manager will try his best for you in the tough times. To me this means:
    • Having good data available and being able to construct a picture from this that you can both understand
    • Providing realistic forecasts about future expectations
    • Providing candid explanations for events, not excuses.

Concluding remarks: Climate change is inflicting some of the worst events on record: low rainfall, severe frost, and severe hail.
Despite the stress that some of this inevitably causes on families the agricultural community is steadily working its way through issues.

There are no magic wands that will improve conditions so we must concentrate on making a difference where we can.

Permanent plantings also have the downside that they cannot be ‘parked’ for a year, like cropping ground or cattle. They require ongoing, expensive, maintenance even when financial conditions are tough.

All my remarks really come under the heading of planning. This means continual planning within the family group to address issues realistically and with the best information available.

It means facing up to things that may be unpleasant, but whose understanding will lead to solutions. If you are committed to the industry, remain very positive for that reason. All you can do is give each season your best shot.

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