Making More from Sheep Australian Wool Innovation Limited Meat & Livestock Australia
MODULE 1: Plan for Success
Procedure 1.4
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The most obvious risks for sheep enterprises are seasonal and price risk. Less obvious, but just as important, are human resource, demographic, environmental and economic risks.

The degree to which any one of these is a threat to a business will vary according to location, production system, financial position, farm size, and so on. It is critical that each business does its own risk assessment and quantifies the relative importance of these risks.


At a Glance
pt Assess the likelihood of major risks and their potential impact on your business
pt Identify strategies to best manage risks or threats
pt Review risk management policy regularly

Key decisions, critical actions and benchmarks

The risk that external factors pose to the business is a combination of:

  • The probability of the event
  • The size of the loss, should it happen, and
  • The longer-term implications for the business.

These things change with time and therefore must be constantly under review. For instance, after a few good years there may be a higher probability of a drought, but if fodder or cash reserves have been built up the implications for the business will be much less than for a drought that follows a few poor years.

A farm business risk assessment template (tool 1.10) is provided to help identify the major risks. It covers the 12 most common areas of risk and asks the questions you should answer when considering these risks.

Planning to manage risk

Because drought is common to all sheep producers, it is used in tool 1.10 as an example of how the principles should be applied. Many of the other risks assessed in tool 1.10 require a more subjective approach, but the same principles (likelihood and potential impact) apply.

Signposts Signposts


Managing Fodder Price for Droughts – useful reference material for calculating the cost-benefits of storing fodder in preparation for a drought. For your free copy:


Managing the risks of climate variability in Australian Agriculture — published by Rural Industries Research and Development Corporation, 2009. Click the link to download a copy: Managing the risks of climate variability in Australian Agriculture.


The MLA EDGEnetwork® program is coordinated nationally and has a range of workshops to assist sheep producers. Contact can be made via:

Stockplan® – an online course to help sheep (and cattle) producers explore management options in the preliminary stages and during drought. Three computer software decision support tools are available to help answer questions such as: ‘How much will it cost to feed stock for a specified time?’ ‘Should I feed, sell or agist?’ To find out more, visit:


MetAccess® — a program for displaying and analysing daily weather records. Available through Horizon Ag. Order your copy by:

Rainman - a software package containing historical, long-term daily and monthly rainfall data for 3700 rainfall locations around Australia. It allows users to calculate chances of monthly and seasonal rain, display historical data as tables or graphs, and use the SOI to forecast seasonal rain, dry periods and effective rain at your location. To order a CD copy of Rainman version 4.3+, contact the Department of Primary Industries and Fisheries customer service centre on:

The MLA Rainfall to Pasture Growth Outlook Tool estimates pasture growth for different locations around Australia. Visit the website: click on Extension, training and Tools, Tools and Calculators, Pasture tools and Calculators and select from the list.

Managing Climate Variability R & D program. This website provides a range of tools and resources for understanding and managing climate risk. visit: site also links to the Climate Kelpie website. Climate Kelpie has an animated explanation of what drives climate in your region as well as a range of decision support tools.

Grazclock is a spreadsheet-based tool that matches animal feed requirements with pasture growth throughout the year. It allows sheep (and cattle) producers to select key management times to correspond with feed demand. Contact the NSW Department of Primary Industries: