Business Resilience, Interest Rates & US Tariffs

Hello

How are you holding up?
There’s no sugar-coating it—this has been one of the toughest seasons on record. With South Australia experiencing its worst drought in history, I know many of you have been facing incredibly challenging conditions. More than anything, I just want to check in. How are you going? Whether it’s managing stock, navigating financial pressures, or just trying to stay positive, I know this drought has taken a toll. If you need to talk, plan ahead, or just share your thoughts, I’m here to listen and help however I can.

For those of you farming in other states, I know that the pressures of agriculture don’t always come in the form of drought. Whether you’re dealing with rising costs, shifting markets, succession planning, or just the everyday challenges of running a farm, the offer stands—I’m here for a chat anytime. Farming is never straightforward, and you don’t have to navigate it alone.

On Wednesday, March 12th I will be part of a panel at the Hart Field Site Getting the Crop In Seminar.  I will be joined by Bec Court (accountant from Hood Sweeney) and Ben Pitt (NAB), where we will be discussing strategies, tools and tips to thrive through tough times.  Should be a great morning with some great speakers lined up.

I also will be presenting two full day workshops, Understanding Your Numbers in Cummins (March 13th) and Tailem Bend (March 19th).  I’ll cover topics such as taxable income vs profit, the stories behind the numbers, benchmarking & KPIs and investment and CAPEX decision making.  

Last week, I travelled to the Barossa to catch up with clients.  At first glance, it’s one of the greenest places in South Australia—a stark contrast to the dry, dusty paddocks seen elsewhere. But don’t let that greenery fool you. Beneath the surface, the region is feeling the full impact of a difficult season. A lack of rain and extreme heat have taken a significant toll, decimating this year’s grape harvest.

While oversupply has been a dominant challenge for the industry—highlighted as a key concern in the 2024 SA Wine Industry Snapshot—a poor harvest only adds further financial strain. Many growers are now facing the difficult reality of reduced yields, lower incomes, and the ongoing challenge of balancing short-term survival with long-term sustainability.

Disaster-Proof Your Farm: Build a Resilience Plan

Farming is full of uncertainties, and extreme weather events—whether drought, floods, fire, or pests—are an unavoidable reality. While we can’t control the weather, we can prepare for it. A farm business resilience plan helps you recover quickly, minimise financial strain, and safeguard your long-term sustainability.

Start by assessing your current resources—feed, water, and finances—so you understand where you stand. Develop a recovery strategy, drawing on past experiences to determine what worked and what didn’t. Strengthen your business resilience by diversifying income, improving risk management, and collaborating with your local community.

After a disaster, have a step-by-step action plan to assess damage, set recovery objectives, explore financial options, and implement strategic solutions. Government grants, low-interest loans, and industry support can provide essential help.

Planning ahead means you’ll be better prepared when the next challenge arises.

Click Here: Disaster Proof Your Farm

Client Story

Don’t Assume a ‘No’ from One Lender Means a ‘No” from All

When it comes to securing finance, many people assume that if their current lender says no, the answer will be the same across the board. But that’s not always the case. Different banks have different risk appetites, policies, and lending criteria, and a rejection from one lender doesn’t mean you’re out of options.

A recent experience with my existing clients highlighted this perfectly. They had been with their bank for years and had a strong relationship with them. When they found a property they were keen to purchase, they decided to test the market to see what other options were available. I put the opportunity out to tender—not only to their current bank but also to two other lenders. The result? The two new banks responded positively, seeing the value in the opportunity and being open to the increased lending. Meanwhile, their existing bank deemed the transaction too risky and declined to proceed.

This is not an uncommon scenario. Lenders assess risk differently based on their internal policies, current market conditions, and even their appetite for lending in specific sectors like agribusiness. Just because one bank isn’t willing to move forward doesn’t mean there aren’t others who will.

US Tariffs – what do they mean for Australian Ag

My newsletter is a bit later than normal as I didn’t feel I could ignore the massive news from the US. I’m no economist so this information is not my opinion but rather a summary of what I have heard and read over the last few weeks.
Trump’s Proposed Tariffs: In 2025, Donald Trump floated significant new U.S. import tariffs on foreign beef, wine, wool, and other agricultural products, potentially around 25%. These were slated for implementation as early as April 2, 2025, with the goal of boosting U.S. farmers and rectifying trade imbalances.
Stated Rationale: The tariffs were justified as an “America First” measure to protect domestic agriculture, achieve “reciprocal” fairness in trade, and even address non-trade issues (like pressuring countries on immigration and drug control). Trump explicitly urged U.S. farmers to ramp up production, framing import tariffs as a boon for American producers.
Australian Export Impact: The U.S. is a key market for Australian agriculture (about $7bn AUD in exports annually). Sectors like beef and lamb (30% of whose exports go to the U.S.) and premium wine would be hard-hit by a 25% tariff, potentially costing Australian farmers and winemakers hundreds of millions in lost sales each year. Even wool, though mostly sold to Asia/Europe, could suffer from any new U.S. barriers.
Competitiveness and Prices: Tariffs would make Australian products pricier in the U.S., undermining their competitiveness. Australian exporters might have to slash prices or lose market share. U.S. consumers could see higher beef and wine prices, while Australian producers might face gluts in other markets, driving prices down. Overall, the tariffs risk distorting prices and harming both sides’ industries.
Broader Economic Consequences: For Australia, these tariffs could reduce export earnings, weaken its trade balance, and hit rural employment. The shock comes as Australian agriculture is rebounding in other markets (e.g. China lifting its wine ban). A U.S. trade pullback could also drag on global growth, indirectly affecting Australian commodities like iron ore if a wider trade war erupts. The RBA has flagged such tariff moves as a risk to economic stability.

Responses and Mitigation: The Australian government is actively engaging the U.S., arguing for exemptions given the free trade history and high-quality of Australian products.  Industry leaders (e.g. MLA for red meat) are monitoring closely and formulating contingency plans. Experts advise accelerating market diversification (through new FTAs and trade blocs) to reduce reliance on the U.S.In the best case, diplomatic negotiations or changes in U.S. policy could avert the tariffs or lessen their severity; in the worst case, Australian agriculture will need to adapt quickly to a more protectionist American market.
Read this article from Andrew Whitelaw about potential tariffs.

What’s Happening with Interest Rates?

Finally some good news to report on interest rates.  As I’m sure you are all aware the RBA cut the cash rate by 0.25% at their February meeting, the first cut since November 2020. This decision was influenced by a decline in underlying inflation to 3.2% in the December quarter, suggesting that inflationary pressures are easing more rapidly than anticipated. However, the RBA remains cautious about further easing due to unexpected strength in the labor market, which could pose upside risks to inflation.

As usual the banks take a little bit of time to pass that cut onto your business, but as far as I am aware, all banks have or will pass on the full rate cut to your variable loans.

” Resilience is accepting your new reality, even if it’s less good than the one you had before. You can fight it, you can do nothing but scream about what you’ve lost, or you can accept that and try to put together something that’s good.” — Elizabeth Edwards, American attorney, author and health care activist.

Have a great day!!
Deb

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