The strength of farmers’ performance in paying off debt is demonstrated by the levels of farm debt declining to half of what it had been in 2009, AIB agri lending adviser Michael Murphy said, quoting Central Bank figures at Dairy Day.

As a result of farmers paying off of debt over recent years, the farm sector’s total borrowings fell to €2.6bn across all banks.

Murphy said that cash balances are looking strong into the close of 2025 and that a recent uptick in borrowing interest looks to set to counteract a slowness to borrow earlier this year as farmers used the high milk price period to finance smaller investments from cash reserves.

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“From a trends perspective, we are noticing that demand from lending, while slow at the beginning of the year has picked up in the back end,” he said.

“We expect 2025 to be in line with 2024. Some of the key factors driving that in 2024 and 2025 was the performance of the sector in general.

“Into 2026, outlook is looking a bit more challenging so there is the option to retrospectively finance the capital expenditure you would have done in 2024 or 2025 – in the last 18 months.”

PTSB’s business development lead Brian Shanley said that, despite the “immediate problem” of declining milk prices, the outlook of both his bank and its farmer customers is positive looking into the medium-term.

“Sentiment is strong.

“Sentiment is good. Guys are being positive and would have a positive outlook on what they wanted to; 2024 was an okay year, 2025 seemed to be a lot better,” Shanley told the Irish Farmers Journal.

“For us in the bank, when we got 2023’s year of accounts in, they weren’t great so we really need to get 2024’s in, they are better and we think 2025 will be better again.”

Prices

“They have done well out of the weather not being too bad, they have done well out of beef, out of calf prices. That kind of stuff that wouldn’t have been counted on as much in others years,” Shanley said.

He said there is a bit of a pause looking into the spring, with farmers looking at what working capital is avaialble to them.

However, although PTSB has seen some farmers “taking a step back for the moment” with the dampening of milk prices, farmer planning for larger investments does not appear to have been shaken.

“The way capital-heavy plans come, like when it comes to land, it comes up every few years so if you get the opportunity, you have to grab it.

“You need to be in the position to be there. Those guys that are ahead are ahead but they have been that way for a while and they waiting for that thing to come along.”