The Better the Bounce, The Bigger the Bucks - August Article

There’s a lot of knowledge required to truly understand what’s possible in agriculture—and often, we simply don’t know what we don’t know. It’s easy to feel like we’re “shooting the lights out” in our own little world, only to later realise it was just the light on the front porch.

To build a successful and resilient prime lamb enterprise, everything must start with a solid understanding of the key profit drivers and how they influence your bottom line. Fortunately, your core KPIs will remain consistent throughout the life of your business—making them both convenient to track and impossible to ignore.

As we emerge from the survival mode that defined 2024 and 2025, it’s timely to revisit the fundamentals of profitability. The toll of these tough seasons—feed shortages, containment feeding, protecting ground cover, and fighting to pay bills—has left the scars still fresh.

This isn’t the time to grandstand or lecture. Instead, it’s time for a reminder: rainfall will return, seasons will normalise (or even become wetter than average), and with that comes the opportunity to return to profitability.

And the faster we move back into a profit cycle, the better. Remember, in agriculture, 80% of our profits typically come from just 20% of our years. But with preparation and the right strategies in place, we can improve on that benchmark. As I like to say: “The better the bounce, the bigger the bucks.”

So, what does “the bounce” actually look like in a modern sheep enterprise? Let’s break it down.

1. The Farm Asset: Physical Health, Structure and Efficiency

Soil Fertility, Pasture Quality and Ground Cover

Poor seasons reduce on-farm productivity and increase costs—producing less for more. Farms with solid soil fertility endure harsh conditions significantly better than those with low fertility. In 2024–2025, we saw record-breaking rainfall deficits that resulted in late breaks, poor spring growth, and false autumn starts.

In these conditions, the differences between paddocks become obvious. Healthy, fertile soils maintain ground cover longer and support better root systems, which help plants withstand moisture stress. These pastures produce more dry matter, retain better plant density, and survive false breaks—ultimately improving feed availability during critical periods.

Containment areas have come a long way in the past two decades and are now essential infrastructure. They allow producers to maintain or adjust stocking rates while protecting ground cover, especially in dry spells. The number one asset on your farm is your soil, and overgrazing or undergrazing can both lead to its deterioration.

Benchmarks from programs like Prograze and Lifetime Ewe Management have given us tools to measure and monitor ground cover. Still, poor management persists—often due to lack of knowledge, inadequate paddock subdivision, or poor water infrastructure. In sensitive areas, we must treat damage to the natural landscape seriously. Financial penalties, though harsh, are not uncommon internationally and would fast-track education here too.

Modern Infrastructure for Modern Risk

A forward-thinking grazing property needs containment pens that are well-drained, accessible, and able to efficiently deliver feed and water. Many farmers are also implementing intensive feeding systems—signs of a maturing industry that’s better prepared to handle market and seasonal volatility.

These systems enable better control over nutrition and allow producers to make more strategic marketing decisions. In turn, this helps flatten out supply/demand curves and protect business continuity.

2. Business and Personal Health

I’m no expert on personal fitness, but I do know the value of staying physically active, especially after leaving behind the structure of team sports. For many of us between the ages of 35 and 55, bowls or golf might not cut it. That’s why initiatives like Active Farmers (shoutout to Sardi Edgar and her team!) are doing wonders for community wellbeing. Group boxing, shared hardship, a few laughs—it all helps build resilience.

Social connection is more important than ever. Rural communities today are smaller and more spread out than they once were. Fewer schools, fewer sports clubs, and fewer local events can leave farmers isolated, especially in tough times. While social media isn’t perfect, it has helped in terms of idea-sharing and problem-solving.

3. Business Health and Capability

Business resilience comes from knowledge—about your environment, your numbers, and your industry. As we prepare for the return of better seasons, it’s critical to stay focused on your stocking rate and reproduction efficiency, which are the major levers for profitability.

A self-replacing, performance-based maternal flock typically reproduces faster and more economically than any other livestock enterprise. Having a younger flock structure (with most breeding animals under three years old) sets you up for a quicker and stronger recovery once conditions improve.

Avoiding the Trap of Old Stock

Holding onto old sheep or cows may feel safe, but it often backfires during tough times. Younger breeding stock performs better under pressure, so discipline is required. Keeping a healthy age structure allows you to seize the opportunity when the bounce comes.

4. Understanding Market Forces

Seasonal pressures skew supply and demand. Feed costs increase, while commodity prices often fall—double the pain. In 2023 and 2024, these challenges were compounded by low water availability, poor spring growth, and policy changes like the live export ban in WA.

We’ve seen record processing numbers across lamb, mutton, and beef, including breeding stock. This will have profound implications when seasons turn and demand for restocker animals rebounds.

Despite the tough conditions, prices for lamb and mutton have surged in recent months. For some, this has created a sell-off incentive that’s hard to resist. Unfortunately, in many cases, this has led to the processing of key replacement breeding stock—an outcome that could come back to bite us when we need to rebuild.

Final Thoughts: The Rain Will Come

It will rain. It will get wet again. And those who have maintained discipline—by keeping a strong age structure, good soil, sound infrastructure, and a focus on key business metrics—will be rewarded.

History tells us so. In 2016, after a severe dry spell, we achieved our best financial result to date—lifting lamb turnoff by 2,500, raising prices by 40%, reducing supplementary feed costs, and recording a 14% ROA and 23% ROE. All this, thanks to strategic stocking, a timely seasonal break, and a disciplined approach to management.

Our industry bodies (MLA and AWI) may be underestimating the true extent of flock reduction in southern Australia. That has significant implications for restocker prices, the supply chain, and ultimately, consumer access to lamb and beef.

Let’s make sure we’re positioned not just to survive the next bounce—but to thrive in it.

Stay disciplined. Stay informed. And get ready to bounce.