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Irish Farmer Debt and where it's going

  • 05-03-2014 9:48am
    #1
    Weshtlad
    Registered Users, Registered Users 2 Posts: 25 ✭


    Well lads,

    I want to ask you about you're opinions are about farmers leveraging up with debt to expand their farms. The Teagasc numbers would say Irish farmers have very low debt figures, roughly half of all farmers classified as having little or no debt. However with all the talk of expansion (primarily dairy) I've heared from neighbours and frineds etc. I can't help but think the numbers are missing something? When you look at NZ the farmers debt levels there are much higher, probably a result of years of farm consolidation I know but is this the future of Irish farmers? Taking on debt to get big? Are the banks lending?

    What's your opinions/observations?


Comments

  • #2
    kevthegaff
    Registered Users, Registered Users 2 Posts: 7,084 ✭✭✭kevthegaff


    Id say that established farmers wont be borrowing as much from now on as it seems guys have already invested in parlours, cubicles. But i could see new entrants with big debts in the future


  • #3
    Greengrass1
    Closed Accounts Posts: 9,493 ✭✭✭Greengrass1


    We found out yesterday what we still owe the bank on the farms mortgage and we were amazed at how much we had paid back and what was left.
    If we were doing it again we probably have borrowed more tbh.
    15ac cane up beside us 7 yrs ago and it went for 240k. We put 220 on it and were happy now we didn't get it tbh it would have broke us in 09.
    Getting money now is a bigger problem


  • #4
    Weshtlad
    Registered Users, Registered Users 2 Posts: 25 ✭Weshtlad


    Greengrass, I'd say that was a nice surprise! - Fair play to you. It does seem like a roll of a dice for those that do take the initial leap and opt for a big loan, if we were to witness a year like 09 again it would pull the rug out fro anyone getting into dairy. I wouldn't expect gate price collapse but I certainly wouldn't count on prices being stable. I think an interesting point @Kevinthegaff to note is that the age profile of farmers is obviously quite old, younger farmers are more likely to expand and take on debt so if farming becomes an increasingly younger mans game (pending decreased SFP etc.) I would expect debt levels to increase.


  • #5
    GRASSorMUCK
    Closed Accounts Posts: 294 ✭✭GRASSorMUCK


    Weshtlad wrote: »
    if we were to witness a year like 09 again it would pull the rug out fro anyone getting into dairy.

    NOt if but when, and if guys can build cash reserves fast enough


  • #6
    Farmer Pudsey
    Registered Users, Registered Users 2 Posts: 6,326 ✭✭✭Farmer Pudsey


    2008-10 was a perfect storm, high interest rates low farm prices accross all produce, grain, milk and beef. Along with that those with off-farm jobs were seeing there pay cut to a large extent. It was tough going if you were in debt and had payments to make. When borrowing getting in at the right stage of the cycle is important.

    The issue in future will be the ability to build cash reserves to tide you over troughs. It is hard at present as costs are coming down off ahigh(fertlizer and ration).


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