Northern dairy farmers issued advice as milk prices slump by 30% in a year
The Northern Ireland NI average milk price for January was 22.33p/l, a decrease of 0.46p/l (2.0%) compared with December, according to latest figures from the UK Department of Environment, Farming and Rural Affairs.
The January milk price was 11.58p/l (34.1%) lower than the previous year.
Department of Agriculture and Rural Development (DARD) in Northern Ireland says that the fall in milk price has put the dairy industry under financial pressure.
However, it says dairy farming is still a profitable business and it is the lack of cash that is causing problems on farms.
A cash flow budget is an important tool you can use to predict how the year will ‘pan out’ for your dairy business, DARD says.
“All businesses need a sufficient supply of cash each month to meet essential costs. A cash flow shows the movement of money into and out of the business over a period of time and the knock-on effect on subsequent months.
“A simple spreadsheet is all that is needed to draw up an effective budget to provide you with the confidence to manage your finances. It is important it includes realistic estimates of performance, prices, costs and timescale.”
DARD says if a cash shortfall is likely it is vital you discuss your options and not ignore the problem.
“If additional borrowing is required it is always better to approach your bank sooner rather than later.
“Having a cash flow budget gives the bank confidence in you and your dairy business,” it says.