Dairy farmers should have cash reserves of €400 to €500/cow in their current accounts to carry them into spring, according to head of farm support at Ifac Philip O'Connor.
Speaking at Dairy Day 2025 in UL on Saturday, O'Connor said that this reserve of money can be physical cash in farmers' current accounts or cash that's "walking on four legs".
"It'll be interesting to see what farmers do with their culls, where milk prices go and what the weather will do.
"People might carry through some cows over the Christmas and fatten them and bring them into the new year for that cash on four legs fund," O'Connor said.
Highlighting the benefits of borrowing over using up cash reserves, O'Connor said that no business should "starve itself of cash for capital".
People might carry through some cows over the Christmas and fatten them and bring them into the new year for that cash on four legs fund
"You end up borrowing that money through a different fund - through your creditors or through your overdraft. Most loans that you borrow from the bank are variable loans.
"You can borrow the money, put in some of your own cash and if the year turns out to be very strong and you have significant cash reserves, there's nothing wrong with throwing a few extra quid into the loan to pay it off.
"You don't want to finance it all out of cashflow - you run into spring and all of a sudden your co-op debt is going through the ceiling and you're going into your overdraft," he said.
Creditor accounts
O'Connor added that Christmas is as "good a time as any" to have your creditor accounts "in good nick".
Agri adviser with AIB Nicola Featherstone echoed the sentiment around borrowing and stressed the importance of "terming out" loans appropriately.
She advised farmers who have to put infrastructure in place to borrow the money over a termed loan and not to eat into cashflow.
"The average borrowing for a dairy farmer is around €50,000. You could look at that and say I'd be able to cover that within a three-year term - if you worked out what the repayments were on that say over a seven-year term, you'd be working out with repayments of €700/month versus a three year-term it'd be working out at €1,500/month.
"That straight away is €10,000 in savings in cashflow," she said.
Farmers should "term out" loans for as long as the bank is willing to give you, she advised.
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Dairy farmers should have cash reserves of €400 to €500/cow in their current accounts to carry them into spring, according to head of farm support at Ifac Philip O'Connor.
Speaking at Dairy Day 2025 in UL on Saturday, O'Connor said that this reserve of money can be physical cash in farmers' current accounts or cash that's "walking on four legs".
"It'll be interesting to see what farmers do with their culls, where milk prices go and what the weather will do.
"People might carry through some cows over the Christmas and fatten them and bring them into the new year for that cash on four legs fund," O'Connor said.
Highlighting the benefits of borrowing over using up cash reserves, O'Connor said that no business should "starve itself of cash for capital".
People might carry through some cows over the Christmas and fatten them and bring them into the new year for that cash on four legs fund
"You end up borrowing that money through a different fund - through your creditors or through your overdraft. Most loans that you borrow from the bank are variable loans.
"You can borrow the money, put in some of your own cash and if the year turns out to be very strong and you have significant cash reserves, there's nothing wrong with throwing a few extra quid into the loan to pay it off.
"You don't want to finance it all out of cashflow - you run into spring and all of a sudden your co-op debt is going through the ceiling and you're going into your overdraft," he said.
Creditor accounts
O'Connor added that Christmas is as "good a time as any" to have your creditor accounts "in good nick".
Agri adviser with AIB Nicola Featherstone echoed the sentiment around borrowing and stressed the importance of "terming out" loans appropriately.
She advised farmers who have to put infrastructure in place to borrow the money over a termed loan and not to eat into cashflow.
"The average borrowing for a dairy farmer is around €50,000. You could look at that and say I'd be able to cover that within a three-year term - if you worked out what the repayments were on that say over a seven-year term, you'd be working out with repayments of €700/month versus a three year-term it'd be working out at €1,500/month.
"That straight away is €10,000 in savings in cashflow," she said.
Farmers should "term out" loans for as long as the bank is willing to give you, she advised.
Read more
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Dairy Day: ‘no meat on the bones’ yet in Aurivo and Dale Farm talks
Dairy Day: water quality poses planning challenges in southeast
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