I’m a dairy farmer, and to be honest, the last year has knocked the stuffing out of me. Milk prices have stayed stubbornly low, costs aren’t letting up, and I feel like I’m constantly juggling bills.
I know I should plan ahead, especially for 2026 and 2027, but it’s hard to sit down and face the numbers when things feel tight already. I don’t want to get caught short again next spring, or find myself borrowing at the wrong time of year. How should I approach cash flow planning, and what’s the best way to budget so I stay in control?
ANSWER: Many dairy farmers are feeling the pressure right now. Low milk prices make it harder to stay on top of bills, and rising input costs mean every euro counts. But the good news is that a clear cash flow plan can restore a sense of control, even when margins feel tight.
Think of cash flow as the rhythm of the farm: money in, money out, and the timing of both. When milk prices dip, the rhythm gets thrown off. Planning ahead helps you avoid panic moments, especially during the costly parts of the year like early spring or when feed demand spikes.
The first step is writing down all expected income for the next 12 months. It doesn’t need to be perfect, you’re just giving yourself a realistic view. Include milk income at a sensible forecast price, scheme payments, stock sales and any other income you can depend on.
For dairy farmers, it can help to plan in three versions:
A best case (when prices lift).A likely case.A stress case (covering what happens if milk price stays low).Next, list your monthly costs. Not just the big ones like feed, fertiliser and loan repayments, but the sneaky ones: contractors, repairs, diesel, ESB, vet bills, and household drawings. Many farmers underestimate personal spending, so it’s worth being honest with yourself here. Low milk price seasons are not the years to leave things to guesswork.
When you put income and costs side by side, you’ll quickly see the months where cash goes tight. That’s a win because now you can plan for those months instead of being surprised by them. For example, you might spot that March and April will need more cash than usual because of fertiliser or contractor payments. Knowing this allows you to talk to your bank early, not when the overdraft is already stretched.
Small changes
For dairy farms, a good cash flow plan doesn’t stop at one season. With volatility here to stay, it helps to look into 2026 and 2027 as well. Ask yourself:
What costs are rising?What loans will still be running?Can you build a small buffer fund in higher milk months?Are there investments that should be delayed rather than forced?Even small changes can make a big difference – things like delaying non-essential spending, reviewing subscriptions or renegotiating merchant credit terms.
While no one wants more paperwork, using a simple digital tool can make planning far easier. Many farmers now use budgeting software to track spending month by month. Tools like this let you see problems early and compare your actual cash flow to your plan in real time.
You are looking for any tool that will pull information together automatically, such as ifac’s FarmPro or Cashminder, helping you avoid guesswork and giving you quick visibility when something drifts off track. You don’t need to be a tech expert – the main benefit is having up-to-date numbers so you can act before issues snowball.
A big advantage of planning ahead is that it helps you make better decisions under pressure.
For example, if you can see next autumn will be tight, you might need to use your overdraft, hold off on a capital job, or carry some additional creditor debt. If you know you’ll have a surplus later in the year, that may be the time to clear debt or rebuild savings. Cash flow planning turns decisions from reactions into choices.
One final point: review your plan at a minimum quarterly. Cash flow isn’t something you do once and file away. It’s a living document. Updating it regularly gives you the confidence that you always know where you stand, even when milk price isn’t playing ball.
Low-price years are tough, but they’re also the years when planning pays off the most. A well-built cash flow doesn’t change the weather or the milk market, but it does help you stay in control, reduce stress and protect the farm for the future.
Philip O'Connor is Ifac's head of farm support.
Philip O’Connor is head of farm support with ifac, the professional services firm for farming, food and agribusiness.
I’m a dairy farmer, and to be honest, the last year has knocked the stuffing out of me. Milk prices have stayed stubbornly low, costs aren’t letting up, and I feel like I’m constantly juggling bills.
I know I should plan ahead, especially for 2026 and 2027, but it’s hard to sit down and face the numbers when things feel tight already. I don’t want to get caught short again next spring, or find myself borrowing at the wrong time of year. How should I approach cash flow planning, and what’s the best way to budget so I stay in control?
ANSWER: Many dairy farmers are feeling the pressure right now. Low milk prices make it harder to stay on top of bills, and rising input costs mean every euro counts. But the good news is that a clear cash flow plan can restore a sense of control, even when margins feel tight.
Think of cash flow as the rhythm of the farm: money in, money out, and the timing of both. When milk prices dip, the rhythm gets thrown off. Planning ahead helps you avoid panic moments, especially during the costly parts of the year like early spring or when feed demand spikes.
The first step is writing down all expected income for the next 12 months. It doesn’t need to be perfect, you’re just giving yourself a realistic view. Include milk income at a sensible forecast price, scheme payments, stock sales and any other income you can depend on.
For dairy farmers, it can help to plan in three versions:
A best case (when prices lift).A likely case.A stress case (covering what happens if milk price stays low).Next, list your monthly costs. Not just the big ones like feed, fertiliser and loan repayments, but the sneaky ones: contractors, repairs, diesel, ESB, vet bills, and household drawings. Many farmers underestimate personal spending, so it’s worth being honest with yourself here. Low milk price seasons are not the years to leave things to guesswork.
When you put income and costs side by side, you’ll quickly see the months where cash goes tight. That’s a win because now you can plan for those months instead of being surprised by them. For example, you might spot that March and April will need more cash than usual because of fertiliser or contractor payments. Knowing this allows you to talk to your bank early, not when the overdraft is already stretched.
Small changes
For dairy farms, a good cash flow plan doesn’t stop at one season. With volatility here to stay, it helps to look into 2026 and 2027 as well. Ask yourself:
What costs are rising?What loans will still be running?Can you build a small buffer fund in higher milk months?Are there investments that should be delayed rather than forced?Even small changes can make a big difference – things like delaying non-essential spending, reviewing subscriptions or renegotiating merchant credit terms.
While no one wants more paperwork, using a simple digital tool can make planning far easier. Many farmers now use budgeting software to track spending month by month. Tools like this let you see problems early and compare your actual cash flow to your plan in real time.
You are looking for any tool that will pull information together automatically, such as ifac’s FarmPro or Cashminder, helping you avoid guesswork and giving you quick visibility when something drifts off track. You don’t need to be a tech expert – the main benefit is having up-to-date numbers so you can act before issues snowball.
A big advantage of planning ahead is that it helps you make better decisions under pressure.
For example, if you can see next autumn will be tight, you might need to use your overdraft, hold off on a capital job, or carry some additional creditor debt. If you know you’ll have a surplus later in the year, that may be the time to clear debt or rebuild savings. Cash flow planning turns decisions from reactions into choices.
One final point: review your plan at a minimum quarterly. Cash flow isn’t something you do once and file away. It’s a living document. Updating it regularly gives you the confidence that you always know where you stand, even when milk price isn’t playing ball.
Low-price years are tough, but they’re also the years when planning pays off the most. A well-built cash flow doesn’t change the weather or the milk market, but it does help you stay in control, reduce stress and protect the farm for the future.
Philip O'Connor is Ifac's head of farm support.
Philip O’Connor is head of farm support with ifac, the professional services firm for farming, food and agribusiness.
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