Farm cash flows on the up
“We are seeing this most noticeably within the dairy sector,” he added.
“Those farmers with cows in milk are benefiting from the very strong farmgate returns that are currently available. And the good news is that international dairy markets look set to remain buoyant for the foreseeable future.
“Improving cash flows mean that farmers are in a position to pay back debt. And I can confirm that many of the overdrafts, that were increased in the wake of last year’s atrocious weather and the very cold spring, are coming back down to previously agreed levels.
“Adding to the improving cash flow scenario has been the recent release of single farm payment monies by the Department of Agriculture.”
Commenting specifically on the on the financial health of farmers within the breeding livestock sector the Bank of Ireland representative pointed out that, here to, the signs are a lot more positive than would have been the case back in the spring.
“The reality is that farmers in the north west are more used to coping with extreme weather conditions. So, in general terms, suckler beef and sheep farmers in that area came through last Winter in better shape than their counterparts in other parts of the country who would normally be planning for a relatively short indoor feeding season.”
Turning to the recently published Teagasc farm income predictions for next year, which point to a possible 15 per cent year-on-year improving scenario, Farrell said: “It all seems pretty feasible to me. But let’s not forget that farming in Ireland has just endured two of the most challenging years in living memory.”
The Bank of Ireland representative went on to confirm that his organisation is actively lending to farmers at the present time.
“We fully buy in to the growth targets set down within the Harvest 2020 strategy. And these will not be met unless farmers have access to the additional finance that they require to grow their businesses. Bank of Ireland currently accounts for 50 per cent of all lending to the agri sectors. And we want to grow this for the future.”
Farrell concluded: “But we are not a charity. Our lending policy is focused of identifying the current efficiency levels of each applicant farm business, the associated track in paying back debt and the feasibility of the business plan submitted.”