Teagasc – the Agriculture and Food Development Authority

While milk price remains behind the levels experienced in recent years, farmers are also facing significant increases in costs due to both the geopolitical issues in the Middle East and also the prolonged dry spell over the summer months.

So how should farmers be looking at their cash flow? What are the warning signs that a cash deficit could be developing? And what practical steps can be taken before it becomes a bigger problem? To discuss this, I'm joined by Patrick Gowing, Teagasc dairy specialist.

Patrick has a particular focus on farm financial management, and today we're going to look at cash flow on dairy farms in 2026, how farmers can identify potential pressure points, and what options are available to manage them.

When we look beyond maybe the headline figures of milk price and input costs, what does the cash flow position of the typical dairy farm actually look like currently?

Yes, James, I suppose we all know the, the milk price down and the cost, as you've mentioned already.

Um, I think the problem from a Teagasc point of view or anyone's point of view from a cash flow, um, is it's so independent to each person.

Like, so your cash flow, my cash flow should be different because we'll have different calls on the money from whether it's the household, debt levels, taxation.

There's so many variabilities from farm to farm, um, that's important that I, I suppose the first thing is someone else's cash flow is not relevant to your own cash flow, and you have to do your own cash flow budget to see where you are.

Now, waiting very patiently here is Aoife Mahoney.

She's a County Galway girl, a Tagish PhD student.

She's also a sheep and beef farmer.

Now, thanks for waiting so patiently there.

Yeah, it definitely could have an impact.

Like, if you look at Teagasc figures and you look at a ewe going to the ram with a body condition score of 2.5, which would be below where you want to be, the experience of their better farm programs would show that l- that ewe's scanning at best about 1.6 lambs, whereas a ewe going to the ram in, say, the optimal, 3.5 condition score, you're getting up to 1.8, 1.9 lambs per ewe.

So they're scanning.

So you could have, on those farms that are affected, that sort of 10, 15% hit in litter size, uh, which, which is significant, Adam, for next year and then the knock-on effects of ewes in poor condition.

So- I know I've, I haven't directly addressed your question, but I'm doing my, my roundabout way of coming back to it, and that is saying that I don't believe food should be treated as a commodity, but we've allowed the economic thinking.

For example, you know, the, the, the, the guys who run Teagasc, apart from the, the dairy farmers who control it, the guys who run Teagasc, they're all economists, or agronomists-

Mm

... being the proper title, right? They see things through the model and the lens of economics.

Could I suggest that the reason the Dutch did that, though, is 'cause they had a famine after the Second World War, and they sa- and they said, "We will never allow ourselves to go hungry again," and, and they turned themselves into a horticultural sort of powerhouse.

We, we, uh, are the opposite.

Like, I've heard a senior person from Teagasc on the radio saying we don't have the land in this country to grow veg.

And funnily enough, I quoted again in the book, um, a Teagasc study that they don't talk about very much-

Comes with some, you know, strings attached, but it's a good deal.

D- there's also Teagasc have a group of forestry advisors, and th- and these, when I say forestry, I mean people can plant native forests.

Like, you know, th- these aren't spruce woodlands.

Yeah.

I think, look, it's timely for farmers to say maybe consider those health issues.

Looking at worms as well, they're saying is there a lot of farms and I suppose we haven't seen it yet even on Tullamore Farm, but I've been talking to some of the other, say, Chargers advisors and that they have seen a bit of a spike in, say, worm counts where there would have been low during the summer and that they have spiked up since that.

So that's something to be cognizant of as well.

But there's a nice bit of detail, Adam, there.