Over 500 dairy farmers attended the Shinagh Dairy Farm Open Day yesterday in Bandon Co. Cork where they were warned of an impending cashflow crisis on dairy farms in 2026 and into 2027.

Visitors to the event were told by Dr. Padraig French of Teagasc that despite delivering an annual average net farm profit of €86,502 per year over the last 15 years, and an average annual return on capital of 12%, the farm of 250 dairy cows is facing a significant cash shortfall over the next eight months due to increased feed costs.

Padraig explained that the farm has full lease charges of €300/acre and no Single Farm Payment. In addition to full labour costs of €90,000 per year, poor grass growth during the last two months has increased feed costs by €100/cow and necessitated the purchase of 30 acres of additional silage for winter.

Padraig explained that because of increased feed costs, the farm will spend more money than its total income over the next eight months up to receiving the April milk cheque during May 2027. This will put the current account on the farm under pressure, reaching a deficit of €160,000 (equivalent to €700/cow) in December 2026 when feed costs and land rental are paid.

Padraig highlighted that despite the farm being a highly profitable farm with a break-even milk price of 25 cent per litre during the initial 11 years of the project, cost inflation has resulted in the breakeven milk price increasing to 35 cents per litre since 2021.

Although higher milk prices in recent years coupled with high milk composition and additional livestock sales revenues have allowed the farm to remain highly profitable, total costs of production have increased to 47 cent per litre.

While the farm made a significant profit in 2025 of approximately 20 cent per litre, a 12 c/litre reduction in milk price coupled with increased feed costs is likely to significantly reduce profit margins to 6 cent per litre in 2026.

Padraig also pointed out that there is limited scope to reduce either variable or fixed costs on the farm. Despite the deficit, Padraig said there are no plans to change the farm system for 2027 and the main ambition is to get back to growing 13.5 t DM/ha next year.

The farm is owned by the four west cork co-ops and managed by Kevin Ahern. The farm serves as a centre of excellence for profitable science-based dairy farming in the region in collaboration with Teagasc, University College Dublin and University College Cork.

See video below for more coverage.