Farming has never been an industry where you can predict every outcome with certainty.

Between weather, grain prices, input costs, interest rates and now global trade disruptions, there are simply too many moving parts to expect that any season will play out exactly as planned. What has changed in recent years is not the presence of risk, but the number of variables at play and how quickly they can shift.

The current conflict involving Iran is a timely example. While it may feel geographically distant, the flow on effects are already being felt on farm. Diesel prices have lifted sharply, fertiliser markets have become uncertain, and supply timing is less predictable than it was even a few months ago.

Events like this are not anomalies in agriculture. Whether it is drought, flood, fire or global conflict, uncertainty is part of the operating environment. There has never been, and likely never will be, a “sure thing” season.

You are not going to get everything right, and that’s OK

Over the past month alone, we have seen a wide range of decisions play out across clients.

Some moved early on inputs when pricing looked favourable.
Some held off and are now facing higher costs or tighter supply.
Others, by chance more than strategy, ordered just before markets shifted.

The important point is this.

You are not going to get every decision right, especially when factors outside your control are moving quickly. Being too hard on yourself in hindsight does not improve outcomes. What does improve outcomes is having a structure around your decisions that allows you to adjust as conditions change.

Plan for three seasons, not just one

In times like these, our advice is simple.

Plan across a range of outcomes, not just the one you hope for.

The law of averages suggests that over time you will experience a mix of below average, average and above average seasons. Building this thinking into your planning gives you far more clarity when conditions start to change.

The average season

This is your baseline.

It reflects what your business typically produces over time, smoothing out the highs and lows. In many ways, it is the most useful scenario because it assumes that while something may go wrong in one area, something else may go right in another.

If you are only going to build one budget, this is where to start.

The below average season

This is the scenario most people are reluctant to look at, but it is often the most valuable.

A downside budget shows you whether your business can absorb a tougher year and where pressure is likely to appear first. It can highlight gaps in working capital, expose areas of overspending, and challenge assumptions around large purchases.

For example, it may show that:

• A planned machinery purchase puts too much pressure on cash flow
• Alternatively, upgrading equipment could improve efficiency and reduce risk in a tough year
• Debt commitments may need to be adjusted to maintain flexibility

It is also worth noting that this is what banks will look at when reviewing your position. Lenders will always consider how your business performs in a weaker season, and ensuring you can demonstrate resilience here strengthens your overall position.

The above average season

While it is not a scenario to rely on, it still plays an important role.

An above average budget allows you to think ahead and decide, in advance, how you would use stronger than expected results. Whether that is reducing debt, prepaying inputs, or investing back into the business, having a plan helps ensure good seasons are used strategically rather than reactively. More importantly, it gives you a sense of hope and optimism. Taking care of your mental health can be one of the most necessary things in farming, especially when you are also reviewing poorer season numbers.

This is about clarity, not complexity

Planning across multiple scenarios does not need to be complicated.

Even at a high level, mapping out these different outcomes gives you a clearer understanding of:

• Where pressure points sit
• How much working capital you may need
• Whether your current loan structure still fits
• What decisions may need to be brought forward

Some businesses will choose to formally build three budgets. Others will keep one core budget and remain aware of the upside and downside scenarios. There is no single right approach. The best system is the one that works for your business and actually gets used.

What matters is being aware of your numbers.

In the current climate, downside planning matters more than ever

Optimism has always been part of farming, and rightly so. It drives investment, growth and long term progress.

But in the current environment, that optimism needs to be balanced with a clear understanding of risk.

Rising fertiliser costs linked to global supply disruptions are a practical example. When input costs shift quickly, it affects:

• Input decisions
• Gross margins
• Cash flow timing
• Overall financial exposure for the season

When these external pressures sit alongside seasonal variability, the key question becomes:

Can the business comfortably manage a tougher year?

The businesses that navigate this well tend to:

Show discipline in stronger years

Build working capital buffers early

Maintain flexibility in their lending structure

Understand which costs can be adjusted if needed

Tracking performance does not need to be complicated

When it comes to managing variability, consistency is far more valuable than complexity.

The most effective operators focus on a small number of key measures:

• Gross margin
• Overhead levels relative to income
• Working capital position
• Total debt exposure

The difference is not just knowing these numbers, but reviewing them regularly.

We emphasise the importance of a simple monthly budget to actuals to our clients. It allows you to identify when spending is starting to blow out, when income expectations need adjusting, and when action is required. We have an easy-to-use spreadsheet for any of our clients looking to track this metric. Catching these movements early gives you options. Paired with our annual business analysis, this process highlights any significant changes in expenses, along with your overall position and profitability. It provides a clear annual health check of the business and helps identify what needs to change moving forward.

Early communication with your bank matters more than ever

As conditions become more volatile, the importance of proactive communication with your lender continues to increase.

Banks understand that farming involves variability. What they are looking for is evidence that you understand your position and are managing it accordingly.

Waiting until the end of the season or until cash flow is tight limits your ability to negotiate and reduces available options. By contrast, updating your bank early, explaining what has changed and presenting a clear plan demonstrates control and builds confidence.

Strong seasons are your best opportunity to prepare

It is easy to view strong seasons as a reward. However, they are also your best opportunity to strengthen your position for the future.

That might involve:

• Building or restoring working capital
• Reviewing your loan structure
• Reducing inefficient or higher cost debt
• Stress testing major capital purchases before committing

In many cases, pressure during difficult seasons is not just the result of the season itself, but decisions made during stronger years.

Taking a measured approach when things are going well can make a significant difference when they are not.

Final thoughts

Uncertainty in farming is not new.

What has changed is how interconnected everything has become. Seasonal conditions, global conflicts, input costs and financial markets now influence each other far more quickly and more directly than they once did.

The goal is no longer to predict the season perfectly.

The goal is to be prepared for a range of outcomes and to stay in control as those outcomes unfold.

If you can:

• Plan across multiple scenarios
• Understand your downside position
• Track performance consistently
• Communicate early with your bank

You put yourself in a far stronger position to make clear, confident decisions throughout the season.

Over to you

If input costs shifted further or the season tightened, how would your current budget hold up?

If you would like a second set of eyes on your numbers or help building out a few scenarios, we are always happy to have a practical, no obligation conversation about where things sit and what your options are.