Analysis of ifac client accounts reveals milk production costs averaging 42c/L for 2025, based on nine months of actual figures and three months of budget projections.

With co-ops dropping milk prices in response to downward market pressure, dairy farmers should be preparing forthe possibility of base prices starting below production costs in 2026.

Head of Farm Supports at ifac, Philip O’Connor said: "The time for financial planning is now, not when cash flow problems have already emerged.

"Farmers need to develop detailed cash flow forecasts immediately, projecting monthly milk income at various price scenarios against fixed commitments like loan repayments and operational expenses."

Milk production costs and finance

Noreen Lacey, head of banking at ifac, has emphasised the importance of proactive 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," Lacey advised.

"Farmers anticipating cash flow pressure or difficulty meeting repayments should contact their bank managers now to discuss options before problems escalate."

Ifac recommended that farmers who do not have a cash buffer to secure working capital facilities now, while operating from financial strength, rather than waiting until cashflow squeeze sets in.

“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," Lacey added.

Support

Ifac’s stated that its Farm Support Team are available to help farmers navigate these challenges through cash flow forecasting, tax planning, and banking relationship management.

With its growing 30-office footprint, today ifac employs a team of 580 professionals supporting almost 30,000 clients across the country.

This includes supporting 18,000 producers, 3,000 clients in the agri-food sector, and 7,000 SMEs.