This time last year, base milk price was averaging close to 48c/l. A year on, the landscape is very different, with the average base price for April milk closer to 36c/l, as outlined in this week’s milk league.

Without ever considering costs, this drop in output value is having a seismic effect on farm businesses.

For a cow that was producing two kilogrammes of milk solids per day for the 30-day month of April, the difference in base price milk sales is around €90/month for this year when compared with last year. Across 100 cows, that’s a drop of €9,000 in sales in a one-month period.

Factor in that the cost of fertiliser has increased, energy costs have gone up and contractor charges are on the rise, cashflow is inevitably going to be tight on farms in 2026.

Cashflow

That is where cashflow budgeting comes in and this year more than ever is a time for doing regular cash budgets.

There is a cohort of farmers out there who are regularly monitoring the cashflow situation on the farm. Some will do it on an spreadsheet, others will keep paper records and have a ledger book of income and expenditure.

No matter how it’s done, it will be of benefit. It’s no secret that the best and most profitable farms in the country have a real tight handle on their costs. This is because they are budgeting monthly and taking prompt action based on their findings.

It may seem a big job the first day, but once the records are up to date, it becomes very easy to do a quick analysis for the month.

Using the online bank statement for the farm or business account, the income and expenditure can be quickly totted up and a farm will be able to see their cash position.

Decisions

Having this information is invaluable, as it allows the farm to compare costs month on month, compare with last year or benchmark off other farms in the local discussion group.

This knowledge allows the farmer to make better decisions and it’s never too late to do a cashflow budget. Even if it feels too big a task to go back to the start of the year, analysing the month of May, for example, will provide useful information.

Your local farm adviser should be able to help with any issues and they will also have a good idea of the things being done well or the costs that are sticking out as a problem.

Teagasc, as well as the majority of farm accounting services, will have a number of simple tools to help complete a quick cashflow budget.

An Excel or Google sheet with an income and expenditure column is another very simple system to set up and even for a complete novice will become relatively straightforward in a few minutes.