Budgets

Is budgeting on your list of new year’s resolutions? Now is the time to do a budget for the year ahead. A monthly cashflow budget detailing the money in and the money out will very quickly identify weak points in the business.

The first item of expenditure to go into the budget is drawings. This is what you need to take out every month to live on. Then put in the other essentials like what you need for loan repayments, labour, land rent, electricity, etc. Then identify the things that you need to buy or pay for that month to run the farm, eg feed, fertiliser, diesel, contractor and so on.

The difference between the outgoings and income is the surplus or deficit. The hard part is to accurately determine the income as we don’t know the milk price in advance. I think it is better to be conservative on both output and price. At the moment, I’d be budgeting for around 30c/l base price in 2018. You should be able to make accurate assumptions of volumes by looking at last year’s output and increasing or decreasing based on age of the herd and stock numbers. Question each cost. Ask yourself if (a) it is necessary, (b) you need as much of it, and (c) can it be gotten cheaper? By doing a budget, you have a clear vision of the business in the year ahead and can plan payments and investments accordingly. Reconcile actual with budget at the end of every month. It might seem like an awful chore, but it’s no coincidence that those who routinely budget are rarely short of money for what they want.

Soil fertility

Now is the time to take soil samples, if not already done. For the Nitrates Directive, one soil sample is required for every 5ha. But on most Irish farms, 5ha encompasses a couple of paddocks. I think a sample for every 5ac is more appropriate for management purposes as soil type and field use can change a lot over bigger areas. Sample in a W pattern. Your adviser can generate a fertiliser plan based on the results. Regardless of the soil test results, nitrogen needs to be spread in early spring.

On most dairy farms, early nitrogen should mean January or February application. Therefore, order your nitrogen now and get it in the yard and ready to go as soon as the weather and ground allows after the opening date. There has been some downward movement in fertiliser prices over the last week or so. At the end of the day, a €10/t or €20/t difference in price won’t make a huge difference to profitability. However, failure to spread it in time and lose out on growing the grass will.

New Year

As we come to the end of 2017, can I take this opportunity to wish all our readers the very best for 2018. I’d like to thank everyone who has helped me out during the past year, particularly those who have featured in articles and participated at events. It is only through farmers, researchers and advisers sharing their knowledge that we all learn as an industry. I look forward to meeting old and new faces in 2018.