Northern Ireland Dairy Farmers Urged to Prioritize Regular Cash Flow Forecasts
Source: The DairyNews
Dairy farmers in Northern Ireland have received a strong recommendation to regularly complete six-month cash flow forecasts, emphasizing their importance in navigating challenging economic conditions. The call came during a dairy farm finance meeting hosted by the College of Agriculture, Food and Enterprise (CAFRE) in Co. Armagh.
The completion of cash flow projections allows farmers to assess their financial status in the present, enabling informed management decisions. Farmers can choose to maintain the status quo, reduce input costs, or enhance herd performance based on the accurate assessment provided by cash flow projections.
CAFRE benchmarking specialist, Martin Reel, highlighted the significance of cash flow forecasts, emphasizing their role in identifying future periods of financial adequacy or pressure. Despite their value, evidence fr om the meeting suggested that relatively few dairy farmers regularly prepare cash flow projections.
In contrast, pig farmers in Northern Ireland were cited as completing cash flow forecasts on a near-monthly basis, even during challenging periods of consistent losses. The meeting emphasized that these projections are crucial for assessing and addressing financial challenges in a timely manner.
The second key message from the meeting stressed the importance of addressing small issues that can make a significant difference when farmgate returns become challenging. Milk quality and attention to small cost factors were highlighted as areas wh ere proactive management can mitigate the impact of falling milk prices.
The meeting also featured insights from HSBC bank manager, Pamela Beattie, who emphasized the importance of banks seeing hard evidence of individual farm performance. Banks may consider options such as extending overdraft facilities or switching to interest-only repayments on loans to support farmers through periods of challenging cash flow.
Beattie acknowledged that many dairy farmers had strong profits in the previous year and suggested that securing a retrospective loan on completed capital projects could be an option to address current cash flow difficulties.
Overall, the meeting underscored the importance of proactive financial management and strategic planning to ensure the resilience of dairy farming businesses in Northern Ireland.
CAFRE benchmarking specialist, Martin Reel, highlighted the significance of cash flow forecasts, emphasizing their role in identifying future periods of financial adequacy or pressure. Despite their value, evidence fr om the meeting suggested that relatively few dairy farmers regularly prepare cash flow projections.
In contrast, pig farmers in Northern Ireland were cited as completing cash flow forecasts on a near-monthly basis, even during challenging periods of consistent losses. The meeting emphasized that these projections are crucial for assessing and addressing financial challenges in a timely manner.
The second key message from the meeting stressed the importance of addressing small issues that can make a significant difference when farmgate returns become challenging. Milk quality and attention to small cost factors were highlighted as areas wh ere proactive management can mitigate the impact of falling milk prices.
The meeting also featured insights from HSBC bank manager, Pamela Beattie, who emphasized the importance of banks seeing hard evidence of individual farm performance. Banks may consider options such as extending overdraft facilities or switching to interest-only repayments on loans to support farmers through periods of challenging cash flow.
Beattie acknowledged that many dairy farmers had strong profits in the previous year and suggested that securing a retrospective loan on completed capital projects could be an option to address current cash flow difficulties.
Overall, the meeting underscored the importance of proactive financial management and strategic planning to ensure the resilience of dairy farming businesses in Northern Ireland.
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