The recent prolonged wet weather has not only had an impact on farms’ cashflow, but also on farmers’ personal wellbeing, warned Susan Maher, agri development manager at Bank of Ireland.
Bank of Ireland’s key message is: if you feel under financial pressure, engage with your bank early – don’t wait.
The stresses of the recent prolonged wet weather that has seen animals housed indoors longer than usual in some parts of the country, as well as delaying the planting of spring crops, is taking its toll on Ireland’s farming community.
Some farmers are seeing bills and costs mount making cash reserves tight. This is on top of lower profitability in 2023 due to farm gate prices, high input costs and inflated tax bills.
Coupled with this, in some instances healthy cash balances from 2022 were invested in farm machinery and infrastructure in 2023, making early 2024 the perfect storm.
Bank for farmers
However, it has been the challenging weather of recent months that has probably done the most damage, said Maher.
The agri-development manager continued: “Farmers are now forced to provide supplementary feeds to livestock who remain indoors, slurry tanks are at capacity whilst the sowing of crops remains on hold as the country waits for a sustained dry spell.
“Many farmers’ silage and fodder stocks are fully depleted and they are in need of additional working capital or funds to enable them to purchase additional silage and other fodder until animals can be turned out to grass.
“Cashflow is tight on some farms. The mental pressure, stress and reduced confidence to invest will take their toll. I have never seen the weather as bad for so long in my career.”
Maher said that it is important for farmers to maintain perspective but not to endure in silence.
“We understand that this is a particularly challenging time for farmers as they deal with the unrelenting wet weather, and that a level of flexibility is required when engaging with your financial provider.
“We are encouraging any farmer seeking assistance to talk to us, so that we can ensure farm finances are properly structured and devise a plan that will help overcome the current challenges.
“The rain will stop falling eventually, and with the right financial plans in place we can ensure that agri-businesses nationwide can look forward to brighter days ahead,” she explained.
Make a plan
The impact of the current crisis, she explained, is occurring in two ways: in terms of cashflow tightness and farm profitability.
“Some farmers are experiencing increased costs driven by a very long winter and inclement spring, which is also impacting animal performance and crop growing conditions.
“They are experiencing cost overhangs from 2023 due to weak farm gate prices and ever-rising input prices, along with inflated 2023 tax bills.
“Some, not all, farmers used cash balances that were available and invested in infrastructure and farm machinery last year – and are now unfortunately dealing with decreased cashflow as a result.”
Because the sowing of crops has been delayed, this is impacting on farm profitability.
“We have adjusted down our outlook for profitability, as we don’t see an uplift in commodity prices to make up for the fall in output.
“While the price/t for inputs is down, the cost will be up due to increased usage. Farmers will now also need to build up stock of reserves for winter 2024/2025. This will cost money,” she said.
Maher said that while only some farmers have been impacted in terms of cashflow, farmers of all sizes have been negatively impacted in terms of profitability.
She said it is important that farmers have adequate cash flow and that Bank of Ireland is actively engaged with its customers and key stakeholders across the agri-sector including the Department of Agriculture, Teagasc, agri-merchants, co-ops as well as the respective farm organisations.
The bank has trained and upskilled its agri-lending teams in response to the current crisis on farms.
“We have taken on the feedback from these stakeholders and we are taking steps to alleviate the pressure on farmers. We have set up an Agri-Weather Crisis Squad and we are now prioritising agri-loan applications to speed up the time from application to money in farmers’ accounts,” Maher said.
Key to this is the range of flexible supports from the bank ranging from overdrafts and stocking loans to various SBCI schemes for working capital/investments, tax loans, retrospective finance and debt management.
Returning to the stresses endured by farmers during the weather crisis, Maher said that above all farmers must remain positive, they have weathered many climate related challenges before, and so must look after their mental and physical health.
“Look after yourself and try not to get too much under pressure. The rain will stop and the weather will get better.
“Talk to someone, be it your advisor, your bank, your accountant and connect with other people. That is the basis of getting through this at the moment,” she said.
Bank of Ireland is regulated by the Central Bank of Ireland.
