Analysis Highlights Rising Milk Production Costs and Financial Planning Needs

Philip O’Connor, Head of Farm Supports at ifac, emphasized the need for immediate financial planning. He stated, "The time for financial planning is now, not when cash flow problems have already emerged." Farmers are encouraged to develop detailed cash flow forecasts, taking into account various price scenarios against fixed commitments such as loan repayments and operational expenses.

Noreen Lacey, head of banking at ifac, highlighted the importance of early engagement with financial institutions. "Banks are far more willing to support customers who approach them early with a plan, rather than those who wait until they've missed payments," she advised. Farmers facing cash flow pressures or repayment difficulties should contact their bank managers to discuss options before issues escalate.

Ifac recommends that farmers without a cash buffer secure working capital facilities while still financially strong. Lacey added, "Having these facilities approved now costs relatively little but gives you options if cash flow tightens - options you may not have if you wait until you're already under pressure."

Ifac's Farm Support Team is available to assist farmers with cash flow forecasting, tax planning, and managing banking relationships. The organization has 30 offices and employs 580 professionals supporting almost 30,000 clients nationwide, including 18,000 producers, 3,000 clients in the agri-food sector, and 7,000 SMEs.