Financial Benefits of Drought Planning
Drought comes with both direct and indirect costs. Whatever actions are taken to mitigate drought, there is always an associated cost, whether it be physical or psychological.
From the economic perspective drought mitigation is managed from two main objectives – demand management and supply management.
Demand management options include decreasing the demand for inputs such as selling livestock, weaning calves early and moving them to a drylot or sale, and decreasing the grazing time in various pasture.
Supply management includes options that increase the supply of forage and/or water by digging a well, trucking water to livestock, renting additional pasture, grazing alternative forages such as crop residue, and trucking livestock further distances to obtain additional pasture.
With rare exception, all of these options incur cost either by increasing expenses or decreasing future revenues. While it may not be possible to incur no cost as the result of drought, it is possible to prepare. The more prepared you are, the more options you will have to mitigate drought, and hopefully, that will lead to a smaller impacts to you, your family and your livelihood and way of life.