It has never been more important to plan cashflow and monitor margins over purchased concentrate in low-yielding cows, farmers attending a CAFRE meeting in Omagh on Tuesday were told.

During the meeting, CAFRE dairy advisers outlined various actions to tackle negative cashflow.

Outlining the process, Trevor Alcorn advised farmers to forecast income and expenses for the next six months and update the analysis as spring progresses.

“What are the big bills expected and when do they need to be paid? Use 2023 milk statements to predict milk sales in the first half of 2024. Look through the VAT book for the typical inputs purchased each spring and use the data to see if the overdraft can cope or needs extending,” Alcorn advised.

Bank support

That advice was backed up by Nigel Young from HSBC, who stated banks have agri-teams that understand the price cycles in farming.

“Banks take a longer-term view on farming. Market downturns are not new and will not rule you out from support. Every business is treated individually, based on its financial history,” said Young.

Where a business needs support, a six-month cashflow plan will be required and it is important not to underestimate the level of borrowings needed.

“It is better to overestimate at the outset and not use all the funds, rather than underestimating and looking for a further extension to the overdraft,” he suggested.

Feed efficiency

Discussing feed efficiency, CAFRE’s Jane Sayers advised farmers to be more ruthless with low-yielding cows.

“If there are cows in-milk over 200 days and not back in-calf, give serious thought to cashing these animals in. It costs £3/day to maintain empty cows, or £90/month.

“Split cows into high- and low-yielding groups, then feed meal to match the lowest yielding animal through a TMR. Cows can then be topped up with feed to yield in the parlour,” she said.

Also addressing the event, Omagh-based accountant Seamus McCaffrey said where tax bills are imminent and finances problematic, HMRC allows spreading payments over 12 months, provided previous accounting years are up to date.

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