Dairy farmers well positioned to face current challenges

Dairy farmers are well-positioned to face the anticipated income challenges of 2026, the country’s banks insisted.

Overdraft utilisation is at extremely low levels, while farm deposits increased significantly during 2025, the lending institutions claimed.

“Despite falling milk prices since the second half of last year, 2025 continued the recent trend where dairy farm incomes were higher than the five-year past averages,” said Eoin Lowry, head of agriculture with Bank of Ireland.

“Overdraft utilisation levels ended 2025 at the lowest level in over three years. Currently, farmers are only utilising 10% of their overdraft facilities,” he pointed out.

Meanwhile, farm deposits reached record levels in 2025, and stand 11% higher than at year-end 2024 and 40% higher than five years ago, Lowry said.

Similarly, AIB is confident that dairy farmers are generally well positioned to face the challenges of 2026.

“We saw the second lowest overdraft utilisation throughout 2025, coupled with a 30% increase in cash resources to Q3 of 2025,” said Donal Whelton, AIB’s head of agriculture.

“That being said, we are very mindful of the current prolonged wet weather, the increased workload on farms and the downturn in dairy commodity markets,” he added.

Whelton urged any farmer customers who needed financial support to talk to the bank as early as possible.

“We will consider facilities up to €100,000 on an unsecured basis, but each application will be assessed on a case-by-case basis,” he said.

“For dairy farmers who are concerned about cashflow, we stand ready to support our customers. Our Enviroflex loan is ideally suited with a variable rate of 4.49%, a loan term up to seven years and is unsecured up to €120,000,” said Eoin Lowry of Bank of Ireland.

Average dairy farmer incomes are forecast to fall to €80,000 in 2026 on the back of lower milk prices. This represents a drop of €57,000, or 42%, on last year’s average income of €137,000.