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Acceptable cow to loan ratio?

  • 12-06-2013 8:04am
    #1
    kevthegaff
    Registered Users, Registered Users 2 Posts: 7,084 ✭✭✭


    When i started milking my cows to loan ratio was 5k a cow incl land and parlour loans. now with doubling of cow numbers and repayments its only 750 euros. What ye think is the maximum a farmer should have?


Comments

  • #2
    zetorman
    Registered Users, Registered Users 2 Posts: 157 ✭✭zetorman


    A wise old neughbour of mine always said that a wise farmer never had loans in excess of the value of his stock !! That way if you hit hard times like ilness etc you could just sell the stock and clear the loans.
    Don't think our celtic cubs would take much heed of him BUT HE WAS RIGHT.


  • #3
    mf240
    Registered Users, Registered Users 2 Posts: 4,884 ✭✭✭mf240


    zetorman wrote: »
    A wise old neughbour of mine always said that a wise farmer never had loans in excess of the value of his stock !! That way if you hit hard times like ilness etc you could just sell the stock and clear the loans.
    Don't think our celtic cubs would take much heed of him BUT HE WAS RIGHT.

    Depends on what the loans are for. Am very cautios and don't like borrowing money at all. Easier on the ole brain.


  • #4
    bob charles
    Registered Users, Registered Users 2 Posts: 6,343 ✭✭✭bob charles


    someone on here said loans shouldnt be any greater than twice your turnover. I would be six feet under if my loans were twice my turnover. Loans not greater than your most liquid asset doesnt seem a bad starting point.


  • #5
    lakill Farm
    Registered Users, Registered Users 2 Posts: 4,735 ✭✭✭lakill Farm


    I dont think there is a definite answer or even a close ball park figure because no farms are the same.

    surely the following are more important to look at than loan per cow.

    Age of the farmer. A farmer of 40 years old with €100k loan -v- a 60 year old with €100k loan

    Land base. €100k loan owning 120 acres -v- leasing the place

    profitability of the farm

    other criteria should also be looked at


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