Drought costs farmers €1,750 extra per week

WITH the heatwave set to last for another week, farmers are feeling the pinch as it is estimated that the average weekly cost to dairy farmers is €1,750.

According to the accountancy and financial advisory firm (IFAC) the anticipated extra costs for feed because of poor grass growth and additional in parlour feed costs to maintain milk production, are continuing to take a toll on the dairy sector.

IFAC teams around the country are working hard with farm families nationwide to ensure that they have fodder budgets in place and to help them anticipate the pressure that the current hot weather could put on their cash flow.

Tom Doyle partner and head of the IFAC Wicklow office said that winter farm planning needs to happen now.

‘ This current spell of hot weather will have a knock-on effect on the levels of fodder that a farmer can store for the winter so on farm planning needs to happen now to ensure that farmers can have access to and can afford to buy in additional feed stock. In what has already been an expensive year this heatwave is adding significant additional on farm costs. We estimate that the heatwave is costing about €1,750 a week for the average dairy farmer in additional costs,’ he said.

He advised farmers not to ignore the problem. ‘Farmers shouldn’t ignore the problem and should plan for financial pressures coming down the tracks. We’re working with farmers to put cashflow budgets in place so that farmers are in a better position to meet all their financial commitments for the year. It’s the sensible thing to do,’ he said.

Mr Doyle also stressed the importance of being up front with the banks and to have a financial plan prepared ahead of meetings.

He issued the following advice to farmers: Get a fodder budget in place to cover additional costs for the winter (don’t be left short); Manage your cashflow and make sure you have the cash resources to meet your financial commitments this year; Talk to your bank. If you’re worried about how you’ll service your debt over the winter, talk to them early. The last minute never works; Talk to your agri-advisor or account to make sure that your financial planning is accurate.