At the Teagasc Moorepark Open Day, farmers were told that a 70-cow herd could be down up to €35,000 this year due to the lower milk price. That’s a massive swing and one that is hard to manage. Teagasc was looking for farmers to do a five-minute cashflow to plan where they might be at the end of the year (see table right). It’s not just dairy farmers who can do it. It’s a worthwhile exercise for everyone. The next step will be to do a more detailed cashflow to see where the problems and solutions lie. Here is what you can do:
Tighten the belt
• Minimise all spending until cashflow improves.• Prioritise essential living expenses.• Eliminate all non-essential expenditure – both farm and personal.• Involve all family members to find solutions.Reduce debt repayments
• Consolidate/restructure loans over longer period, investigate interest-only, but watch rates.• Investigate payment holidays on machinery lease options.• Negotiate with merchants to avoid paying excessive interest on overdue accounts.• Review policy payments – can pension/life assurance/saving policies be reduced.• Talk to your accountant now to avoid shock to cashflow.Bring in cash
• Sale of trading stock.• Target beef cattle/stores for sale/especially early sale of cull stock.• Surplus fodder – plan for what you need first.• Cash in policies/saving.• Take advice from you broker/accountant on this.• Off-farm income options.• Sales of assets.• Look into availing of farm assist.