Question: My farm needs a number of upgrades over the next few years. There are things that need doing, like yard improvements, slurry storage and some machinery upgrades, but I can’t afford to do everything at once.
Every job feels important in its own way, and I’m finding it hard to decide what should come first and what can wait. I don’t want to spend in the wrong area or put pressure on cash flow by taking on too much. How do I decide where to spend money, and what is the best way to prioritise different jobs on the farm?
Answer: This is a very common situation. Most farms have a list of jobs that need doing, and that list is usually longer than the budget allows. The challenge is not deciding whether to invest, but deciding where to start.
The first step is to accept that you don’t have to do everything at once. Trying to tackle too many jobs in a short period is one of the quickest ways to put pressure on cash flow. A better approach is to step back and sort your list into clear priorities.
Start by splitting jobs into three groups
1. Must do: essential for compliance, safety or keeping the farm running.
2. Should do: improves efficiency or reduces costs.
3. Could do: nice improvements, but not urgent
This simple exercise often brings clarity straight away. Some jobs move to the top of the list very quickly when you look at them this way.
‘Must do’ items usually come first. These might include slurry storage to meet regulations, safety work in the yard or repairs that affect day-to-day operations. These are not always the easiest or most attractive jobs, but they are often the most important.
Next are the ‘should do’ investments. These are the ones that can improve how the farm runs. For example, better layout in the yard, improved handling facilities or upgrades that save time or reduce labour. These types of investments may not be urgent, but over time they can make a big difference to efficiency and workload.
‘Could do’ jobs are the ones that are easy to get drawn into. New equipment, tidy-ups or upgrades that look well but do not have a clear impact on the business. These are usually the first to delay if money is tight.
Clear priorities
Once you have your priorities clear, the next step is to look at cost and timing. Even essential work needs to be planned properly. The key question is not just ‘can I afford this?’ but “when can I afford this?” Timing makes a big difference. Taking on a large cost just before a tight period, like early spring, can create unnecessary pressure. If the same job can be planned for a stronger cash flow period, it becomes much easier to manage.
It is also important to understand the full cost of each job. The headline figure is rarely the final number. There can be extra costs for site work, materials or changes along the way. Allowing a margin helps avoid surprises.
Where possible, it can make sense to break larger jobs into stages. Instead of doing everything in one go, you might consider the following as it reduces pressure and keeps progress moving.
What you should consider
1. Complete essential groundwork.
2. Delay non-critical parts.
3. Spread the cost over a longer period.
Another useful question to ask is: what does this job give back?
Some investments reduce costs. Others save time. Some improve safety or make the farm easier to manage. Being clear on the benefit helps you choose between options. If two jobs cost a similar amount, but one saves time every day, that may be the better place to start.
Be realistic
It is also worth being realistic about borrowing. Loans can be a useful tool, but repayments need to be manageable in an average year, not just a good one. Before committing, ask yourself: if milk price dropped, would I still be comfortable carrying this cost? If the answer is no, it may be worth scaling back or delaying.
Talking through your plans with your advisor or accountant can also help. A second view can often bring clarity and help you avoid taking on too much at once.
Finally, remember that progress on a farm does not have to happen all at once. Many of the strongest farms have been built step by step over time. Making steady, well-timed decisions is usually better than trying to do everything quickly.
Philip O’Connor is Ifac’s head of farm support.
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