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

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  • • 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.