And if the bank won’t buy into that rhetoric, financiers with industry knowledge and skin in the game will.
Committed to helping producers quickly increase livestock numbers without depleting working capital reserves to do so, Legacy Livestock exists to fill the gap when producers find it difficult to obtain the funding required to run their operations at full capacity.
Offering healthy profit margins through competitive interest rates, no ongoing interest or principal repayments, and flexible repayment options, Legacy Livestock CEO Richard Brimblecombe said they are a niche specialist livestock financier with broad industry knowledge.
“We are focused on providing livestock finance to progressive livestock producers all over Australia and what makes us a little bit unique is that we offer a loan,” Mr Brimblecombe said.
“If funding is provided by Legacy, the livestock are always owned by our clients and are on the client’s balance sheet, which is an important differentiating factor between us and other livestock finance providers.
“The other thing about us is that we’re very focused on establishing long-term relationships with our clients, which means we love being on farm - we like to put our people on the ground, sit around the kitchen table, bounce around the paddock - and make sure we develop a really comprehensive understanding of what it is our client’s trying to achieve and how we can help them to do that.”
These long-term relationships include helping producers through the bad times and positioning them to take advantage of the good ones as soon as they materialise.
“Producers who have borrowed money to purchase livestock and are selling them in the current market, some of them will be selling at a loss and so a really important role for us is to make sure that we are finding appropriate support for those clients to work through these difficult times,” Mr Brimblecombe said.
“That comes back to us developing a really good understanding of the client’s business, their balance sheet structure, and what it is they’re trying to achieve in the long run.
“For those clients who are seeing livestock sold at less than what they bought them for in the current market, which is just about everybody, our view is that if they’ve performed well operationally, their management has been good, they’ve put the weight on or if the season has turned and they’ve made a smart decision to exit the stock before their condition falls away, then we think they’re the sort of clients we want to be supporting.”
In the event of shortfalls being realised as a consequence of external factors, and it is clear the client has worked hard to minimise the impact, Mr Brimblecombe said Legacy Livestock is focused on remaining very supportive of those clients.
“That might be in the form of carrying the loss through for a period of time, or extending the maturity date of loans associated with the purchase of livestock to give clients more time to trade through them as well.
“We think that’s a really important responsibility for any livestock funder to have, we’re very focused on doing that, and as a result of our client selection, we’re really confident we’re able to do that.”
Mr Brimblecombe said Legacy Livestock also plays an important role when it comes time a client decides supplementary feeding is necessary within their operation.
“It’s times like these when people will often turn to supplementary feeding to get stock finished to market or to achieve a certain outcome with their stock, and their working capital position with the bank can be a little bit depleted because of the poor prices they’re receiving, just like at the moment,” he said.
“Something that we can do is assist those clients with purchasing livestock feed by providing a loan for the feed with the view to being repaid for the loan through the sale of those stock when things turn around.”
At the same time, Legacy Livestock aims to position clients to get their cash flowing quickly again and to be back engaging in profitable trades when the seasons do turn.
“Things are pretty negative at the moment; people are pretty worried about the market, and they’re worried about when the next material rainfall event is going to come.
“The Bureau of Meteorology have declared that we’ve got an El Nino event and we’ve got the Indian Ocean Dipole also suggesting below average rainfall conditions, but what experience tells us is, generally speaking, it’s less than average rainfall, not no rainfall.
“That means somebody somewhere will be getting rain and there will be trading opportunities, and it’s important for them to be able to access the money to fulfil those opportunities.
“More generally, when that widespread break comes across the east coast of Australia, there will be a very important role for us as a livestock financier to play to help people quickly restock, make the most of their pastures and generate cash quickly again.”
While the team at Legacy Livestock doesn’t see themselves as having an advisory function, Mr Brimblecombe does see them playing an important role in helping maintain producer positivity.
“We often say our clients take our capital to where the best risk adjusted returns are in any market because our clients are generally much smarter than us and much more in tune with what’s happening in the context of their business, and so we trust them to deploy our capital in the most effective way in the context of their individual circumstance or business.
“The important role we play is staying positive, letting our clients know we’re there, we’re available, we’re keen to chat with them, we’re keen to support them, and times will turn around.
“It’s not always going to be like this, and I think we’ve got an important role here in terms of helping people keep their chin up, let them know they’re supported and that there will be good times around the corner.”
With that positive outlook in mind, Mr Brimblecombe said now was the best time for producers to be proactive and think about the future of their operations.
“Things are tough now, but we’d encourage people to be thinking about how they will get their business going and firing on all cylinders again when the season does turn,” he said.
“Come and talk to us now about your long-term plans, get a limit in place and have something ready to go, so when the season does turn - and particularly if you’re fortunate enough to get under some storms that perhaps others haven’t - you’re well placed to take advantage of opportunities as they arise because these things happen quickly.”
This is sponsored content in partnership with Legacy Livestock.