Managing Climate Risk for Sheep

What’s the risk?
There are risks involved in running any business. Not all risks have the same impact on a business, its managers or owners. Some things – earthquakes, fires, floods have the potential to seriously damage or destroy your business. Managing costs and cash flow can reduce financial risk. Having enough labour for lambing reduces the risk of human stress, fatigue, family discord.

Flock managers have to decide what the risks might threaten their lamb business. How likely is it that risk will become reality? How much impact will that potential risk have on the lamb business? Is there something you can do to reduce the impact?

Dealing with risk
Dry conditions, even droughts, are frequent occurrences across the western prairies. The past few years of low precipitation and declining soil moisture reserves have increased awareness of the need for having a ‘plan b’ for managing a flock. Developing a marketing plan for your lambs before they are even born is part of a ‘plan a’ for a lamb business. It deals with things like feed resources, market opportunities, market price fluctuations, increased or lowered costs, extra or shortages of labour. Adding a ‘plan b’ gives you options when any of those change. If it doesn’t rain, or if spring is late, a supply of stored feed, seeding annual pastures, or a lamb feeder willing to buy your lambs might all be options.

There are all kinds of risks that could affect your lamb business. Decide which ones are more likely to occur and which will have a greater impact on your operation.

Increases in feed or labour costs, the two big costs in producing a lamb.
Fluctuating market lamb prices or being able to access a market. Both of those can be affected by changes in exchange rates or trade policies.
Outbreaks of disease, parasites, predation that increase lamb mortality rates or reduce flock productivity.
Severe weather in Alberta can range from intense cold to drought. It can trigger disastrous floods or wildfires.

Have simple long and short term goals for your lamb business. Decide on a few ‘action plans’ for each goal – ‘plan a’ for when all works out well; ‘plan b’ for when things go sideways. Write down your plans, review them and revise them to fit the current situation. Good planning before disaster strikes helps mitigate the impact of, say a drought, on your business. It may even reduce some of the stress and help you sleep better at night.

Thinking about how you will resume your business after a drought, or a disastrous flood or wildfire, helps build a sustainable operation.

Other information sources:

Risk Management - Farm Manager Home Page
Extreme Weather Management - Beef & Lamb New Zealand

This document is maintained by Mary Ann Nelson.
This information published to the web on June 15, 2016.