Banks borrowing money Foreclosure, and all that lark

Bass Reeves

I know we have been through this a bit lately but do we need to take a cold detached look at the reality of borrowing money. Loads of people blame the bank when the sh!t hits the fan. In reality banks often work off your business plan, now if you go into the bank for a loan you are going to give the most optimistic forecast of your business. However you still have to do the sums yourself. Banks are not experts in milking cows whether they are HO or JEX's neither are they experts in finishing cattle growing grain or breeding lambs.

For the last 30 years we have been fed bigger is better in farming. Look around are many that are left better off. Most are finding out that hiring labour is not viable especially now that labour costs are rising. If we do not analysis why foreclosures and repossessions happen then we do a disservice to those that remain in the industry because we fail to see and understand why it happens. If this happens these pitfalls remain for other and the same mistakes will be repeated.

Unfortunately that means that some of the comment here can seem personnel when often in reality it is a kind of cold hard analysis. From 2008-2014 we had a lot of machinery repossessions as contractors suffered from exposure to the Celtic Tiger boom. At present we may be starting to see the fallout from dairy expansion. Cattle finishers may find the same issue as finishing prices wobble all over the place it may leave some finishers exposed to serious losses as some now finish 500+ cattle at the time and as SFP is spread across all farmers

However can we always blame the banks for what may be our own mistakes. If we refuse to analysis why this or that farmer went broke or think that protesting at auction's or at repossessions are the answer we expose ourselves to higher interest rates from banks and lending institutions as well as encourging these entities to sell bad debts to vulture funds.

Farmers have to get more analyitical about there business and to stop think ''shur that the price of them'' when buying cattle that they know they are paying 100+ too much for and continuing to produce product at a loss. How many tillage farmers will take out the plough in a few weeks time to plant a crop that at best may break even. How many will buy cattle to eat grass as well as draw DA.

There also tends to be a grab all attitude in that some farmers ( and you can add those that do farm contracting) that are losing money or breaking even continue to expand and this this as the way to try to shore up there business. Maybe failure is a healthy thing to be seen and maybe we should not be so fast to support those that fail by anti-competitive practices, it is ok to support them in a social sense but maybe we need to be more ruthless in our analysis of what went wrong.

djmc

On the tread that was closed that man gave his side of the story today on radio Kerry
You might be able to hear about it on their podcast section tomorrow under Kerry today section.
Also a report on agriland now and that's all I will say on the matter other than wishing him and his family well during this difficult time.
A lot of dairy farmers will find it very tough this year and next spring.

Kovu

You're ahead of me Bass.....was going to start something similar with the caveat of not mentioning (where at all possible) specific family cases in the farming industry.
We'll be a bit more stringent in this thread with moderation, won't say it twice.
Just be mindful of your posts everyone, sin é.

-Kovu-

RightTurnClyde

djmc wrote: »

A lot of dairy farmers will find it very tough this year and next spring.

It's next spring that I'm sh1tting. Trying to plan as best I can to have as much cash on hand as possible come spring 2017. A year of 25c or less will leave reserves tight and if the year is as tight as I think it will be you could see a lot of reps getting gittery come spring 2017. I'd say cash will be very much king in 2017.

djmc

Link to podcast
http://www.radiokerry.ie/podcast_series/kerry-today/

Cattlepen

Bass Reeves wrote: »

I know we have been through this a bit lately but do we need to take a cold detached look at the reality of borrowing money. Loads of people blame the bank when the sh!t hits the fan. In reality banks often work off your business plan, now if you go into the bank for a loan you are going to give the most optimistic forecast of your business. However you still have to do the sums yourself. Banks are not experts in milking cows whether they are HO or JEX's neither are they experts in finishing cattle growing grain or breeding lambs.

For the last 30 years we have been fed bigger is better in farming. Look around are many that are left better off. Most are finding out that hiring labour is not viable especially now that labour costs are rising. If we do not analysis why foreclosures and repossessions happen then we do a disservice to those that remain in the industry because we fail to see and understand why it happens. If this happens these pitfalls remain for other and the same mistakes will be repeated.

Unfortunately that means that some of the comment here can seem personnel when often in reality it is a kind of cold hard analysis. From 2008-2014 we had a lot of machinery repossessions as contractors suffered from exposure to the Celtic Tiger boom. At present we may be starting to see the fallout from dairy expansion. Cattle finishers may find the same issue as finishing prices wobble all over the place it may leave some finishers exposed to serious losses as some now finish 500+ cattle at the time and as SFP is spread across all farmers

However can we always blame the banks for what may be our own mistakes. If we refuse to analysis why this or that farmer went broke or think that protesting at auction's or at repossessions are the answer we expose ourselves to higher interest rates from banks and lending institutions as well as encourging these entities to sell bad debts to vulture funds.

Farmers have to get more analyitical about there business and to stop think ''shur that the price of them'' when buying cattle that they know they are paying 100+ too much for and continuing to produce product at a loss. How many tillage farmers will take out the plough in a few weeks time to plant a crop that at best may break even. How many will buy cattle to eat grass as well as draw DA.

There also tends to be a grab all attitude in that some farmers ( and you can add those that do farm contracting) that are losing money or breaking even continue to expand and this this as the way to try to shore up there business. Maybe failure is a healthy thing to be seen and maybe we should not be so fast to support those that fail by anti-competitive practices, it is ok to support them in a social sense but maybe we need to be more ruthless in our analysis of what went wrong.

This is the most straight talking post I've seen in a while. It is time we took stock of what we're at. And its not a case of finding who to blame. Its easy to blame Larry, co-ops the banks etc. Its a matter of trying to see just where farming is going. Technology has changed things to a degree. Protein can now be produced in quantities in factories that would have taken hundreds maybe thousands of acres previously. The business has changed. We have a refugee crisis in Europe that nobody saw coming. This will be bound to affect the next review of Cap and SFP.
Are we relics of a business that is no longer viable??

lab man

Hi lads, lasses. I'm not a dairy guy am in sucklers. I was in the local b.o.i. the other day an was talking to the manager he said all the managers had to go to dublin for a big meeting about the dairy sector saying ppl wouldn't be able to make repayments etc. He said that they expected milk to stay at the price it is till at least august 2017

blue5000

I reckon there is a lot of new entrants to dairying, and ppl that expanded rapidly, who based their whole business plans on 30c/L with at most a 10% sensitivity test.
If anybody here is in difficulty, keep talking to the bank. I don't know is interest only an option or not, maybe selling a field and taking some of the pressure off might be a realistic option.
A spouse working off farm is something banks like to see. Some of us here are old enough to remember interest rates of 18% in the 1980's. Deals were done, and settlements made. Today our interest rates are a lot higher than mainland EU, we need to ask why?

Milked out

blue5000 wrote: »

I reckon there is a lot of new entrants to dairying, and ppl that expanded rapidly, who based their whole business plans on 30c/L with at most a 10% sensitivity test.
If anybody here is in difficulty, keep talking to the bank. I don't know is interest only an option or not, maybe selling a field and taking some of the pressure off might be a realistic option.
A spouse working off farm is something banks like to see. Some of us here are old enough to remember interest rates of 18% in the 1980's. Deals were done, and settlements made. Today our interest rates are a lot higher than mainland EU, we need to ask why?

Communication is key allright. AFAIK interest only periods are available with boi anyway. Budgeting every month or quarter is important too. Been hard with weather to get the time to sit down and do it but im going to take a day next week to do that and see what optiond i have. A lot of dairy loan payments made in the next 6 months as well so do out what will be coming in and going out and try balance bills with meeting repayments.
On the interest rates it's lack of competition. When we got ours I could give out all I want but both banks had similar rates what could I do, couldn't say I'll go somewhere else. Now in my case I had existing debt and not many years behind me so not much bargaining power, more experienced lads may have been able to pull em backnow on interest. Did someone say here when milk flex was anounced their own bank came in and matched the interest rate having previously been offering at a % higher??

coolshannagh28

No competition is one issue on interest rates ,the fact that badly burned foreign banks are fleeing adds to the problem but a more insidious problem is the fact that the government is allowing our native banks charge higher rates to make them more profitable and by extension allow the state to offload them .
This is a two edged sword good for the taxpayer in general but bad for the borrower paying 5% plus over euribor at 0.

tomwaterford

RightTurnClyde wrote: »

It's next spring that I'm sh1tting. Trying to plan as best I can to have as much cash on hand as possible come spring 2017. A year of 25c or less will leave reserves tight and if the year is as tight as I think it will be you could see a lot of reps getting gittery come spring 2017. I'd say cash will be very much king in 2017.

I know from friends who work in independant merchants behind counter and collecting money...they are finding it difficult to collect money (no names asked/given)

I know myself....that doing nixers....a lot of lads are servicing themselves/doing bare minimum jobs with the service and that I do get a bit more machinery work like repairing Mowers and tankers this spring (not as lucrative)

Though I do wonder long term about my job....as I lost a job as an apprentice training on plant machines years ago and kinda fell into a similar line of work....hard to plan for the future
(Know this not helpful to lads borrowed on here...pure venting)

hometruths

blue5000 wrote: »

Today our interest rates are a lot higher than mainland EU, we need to ask why?

In mainlAnd Europe banks can rely on the security and repossess in a matter of months. That's the big difference.

Here it can take years, is costly through the courts, and if banks do get permission to repossess they face protests, pickets and poor public opinion, as well as boycotts on trying to realise the value of the assets.

We can pat ourselves on the back for being more compassionate to our neighbours and bandy about emotional statement s about thinking of the family which is great, but the price we pay for it is increased interest rates for all.

We can't have it both ways!

kowtow

Just a little caution on interest rates- Irish rates are only high in comparison to globally abnormal negative real rates. Competition is a factor but so is long term political / sovereign risk.

Planning for margins which would be too little to support 5-10% rates over the long term is a dangerous proposition in any country... in that sense the present relatively high irish rates might be setting us up better than an abnormally low rate would be.

We need to figure out how to farm for a real return on investment... including own land and own labour... and stop making a special case of ourselves.

The cheap food promise of the CAP era has unfortunately led to cheap farmers, and that's something we have to stop if we want anything resembling family farming to have a healthy future.

coolshannagh28

schmittel wrote: »

In mainlAnd Europe banks can rely on the security and repossess in a matter of months. That's the big difference.

Here it can take years, is costly through the courts, and if banks do get permission to repossess they face protests, pickets and poor public opinion, as well as boycotts on trying to realise the value of the assets.

We can pat ourselves on the back for being more compassionate to our neighbours and bandy about emotional statement s about thinking of the family which is great, but the price we pay for it is increased interest rates for all.

We can't have it both ways!

This is a factor but it is important to remember our banks were recapitalised to allow them deal with bad debt and another issue which affected the farmer mentioned previously is that the debt does not die with the security but that under our laws of recourse other assets become liable for repossession if there is a shortfall hence the acrimony and drawn out costly wrangling in Irish cases.
A more decisive approach is used abroad particularly the US where non recourse lending only demands the security pledged to the loan hence the term jingle mail where distressed borrowers would drop the keys through the banks letterbox and walk away.

_Brian

Like everything else there so many hidden agendas at play..

I know someone working in a bank in Meath, over lending to farmers. Now, when the dairy expansion lark was muted the banks instructed them to get as much money out against land as assets as they could. Loans were made on very ropey business plans. When I questioned what milk price the plans were based on I was told no less than 35c for the next 5 years. This person was donning wellies and doing farm "inspections" and them not knowing one thing about farming never mind proper dairy business - having never stood in a parlor ever.

So yes, farmers take on loans at their own risk, but there are other agendas in the background with banks needing to "sell" products. If your being instructed to lend out X amount of money what better asset to lent against than land.

Dawggone

kowtow wrote: »

Just a little caution on interest rates- Irish rates are only high in comparison to globally abnormal negative real rates. Competition is a factor but so is long term political / sovereign risk.

Planning for margins which would be too little to support 5-10% rates over the long term is a dangerous proposition in any country... in that sense the present relatively high irish rates might be setting us up better than an abnormally low rate would be.

Anyone that has a second brain cell would fix now for the duration on the loan.
Anyone borrowing in countries with competitive rates would be fixing...
Therefore no competitive edge.

Milked out

Dawggone wrote: »

Anyone that has a second brain cell would fix now for the duration on the loan.
Anyone borrowing in countries with competitive rates would be fixing...
Therefore no competitive edge.

I'll try and find what percentage they had when I was checking about fixing a number of months ago tomorrow. Periods offered were only for between 3 and 10 years nothing longer iirc. They werent very enticing when interest rates at the moment don't look like going anywhere in the next 6 months

Bass Reeves

One figure I came across lately was that a dairy cow was capable of sustaining 5K in loans. I taught that this figure was pretty high even for a high cost system. The lending was purely agri no farmland loan was included. Doing a quick calculation allowing for an average interest rate of 5.5% (this is as loan would not be fully secured) over 20 years repayments would be about 400/cow/year.

So this got me think about other levels of dairy lending at 1k, 2k and 3K/cow.

At 1K/cow interest alone would be could be as low 50 euro/cow/year and repayments would be 125/cow over 10 years. I allowed for an interest rate of 5% as loan would be low risk and maybe secured but a low value loan to the bank.

At 2K/cow interest would be 80/cow and repayments about 175/cow/year over 15 years. I allowed for a 4% interest rate as this kind of lending while risky would have to be secured.

At 3K/cow an interest could be 150/cow and repayments 225/cow. I am allowing for a higher interest rate due to risk and maybe a larger mix of loans.

While some of these may seem sustainable the real issue is avoiding other lending that is expensive. Have you the ability to avoid expensive car and tractor loans and leasing. Will this leave you with the ability maybe through a company structure to tractors and machinery that you need over the 15-20 year period that the loan revolves around.

Traditionally we could let inflation do some of the heavy lifting on loans. A 2-3%/year inflation rate would make these loans seem 25% cheaper after 10 years. As well on the longer loans interest rate exposure would decrease as capital payments increased and interest payments decreased.

So what is sustainable from a dairyfarmer view point.

blue5000

Bass Reeves wrote: »

One figure I came across lately was that a dairy cow was capable of sustaining 5K in loans. I taught that this figure was pretty high even for a high cost system. The lending was purely agri no farmland loan was included. Doing a quick calculation allowing for an average interest rate of 5.5% (this is as loan would not be fully secured) over 20 years repayments would be about 400/cow/year.

So this got me think about other levels of dairy lending at 1k, 2k and 3K/cow.

At 1K/cow interest alone would be could be as low 50 euro/cow/year and repayments would be 125/cow over 10 years. I allowed for an interest rate of 5% as loan would be low risk and maybe secured but a low value loan to the bank.

At 2K/cow interest would be 80/cow and repayments about 175/cow/year over 15 years. I allowed for a 4% interest rate as this kind of lending while risky would have to be secured.

At 3K/cow an interest could be 150/cow and repayments 225/cow. I am allowing for a higher interest rate due to risk and maybe a larger mix of loans.

While some of these may seem sustainable the real issue is avoiding other lending that is expensive. Have you the ability to avoid expensive car and tractor loans and leasing. Will this leave you with the ability maybe through a company structure to tractors and machinery that you need over the 15-20 year period that the loan revolves around.

Traditionally we could let inflation do some of the heavy lifting on loans. A 2-3%/year inflation rate would make these loans seem 25% cheaper after 10 years. As well on the longer loans interest rate exposure would decrease as capital payments increased and interest payments decreased.

So what is sustainable from a dairyfarmer view point.

I'm not a dairy farmer, but at present milk prices all that is sustainable for the cow carrying 3k of loans is interest only, and that would be with an off farm job putting the food on the table.

Milked out

blue5000 wrote: »

I'm not a dairy farmer, but at present milk prices all that is sustainable for the cow carrying 3k of loans is interest only, and that would be with an off farm job putting the food on the table.

I hope you're wrong, but in years like this the bare minimum in terms of expenditure is all that can be done, essentially talking of feeding the cow and feeding the soil, after that it's a case of can it be put off. Obviously the big thing this year so far is feeding the cow is proving a damn sight more expensive given the weather and associated knock on effects on output and breeding. As you said earlier talking to the banks and indeed any other people who money is owed is important. No second income here just the farm, at the 5k figure but my own drawings reduced to bare minimum and had hoped to take some one on part time as well and that is shelved for the moment. Where it will hit me hard is delaying projects which will get the farm to peak production ie reseeding and farm roadways. If breaks or interest only periods can be built in to loans given the cyclical nature of milk price

whelan2

Milked out wrote: »

I hope you're wrong, but in years like this the bare minimum in terms of expenditure is all that can be done, essentially talking of feeding the cow and feeding the soil, after that it's a case of can it be put off. Obviously the big thing this year so far is feeding the cow is proving a damn sight more expensive given the weather and associated knock on effects on output and breeding. As you said earlier talking to the banks and indeed any other people who money is owed is important. No second income here just the farm, at the 5k figure but my own drawings reduced to bare minimum and had hoped to take some one on part time as well and that is shelved for the moment. Where it will hit me hard is delaying projects which will get the farm to peak production ie reseeding and farm roadways. If breaks or interest only periods can be built in to loans given the cyclical nature of milk price

IFA man said last night nitrogen price is falling throught the floor, 2 boat loads came in and nowhere to store it, talking as low as 200/tonne for bulk n.

pedigree 6

whelan2 wrote: »

IFA man said last night nitrogen price is falling throught the floor, 2 boat loads came in and nowhere to store it, talking as low as 200/tonne for bulk n.

There's a guy near me been drawing loose fert for the last few days. I was thinking he couldn't be using it all himself. He does have big sheds.

djmc

http://www.farmersjournal.ie/weekly-podcast-motor-tax-woes-forced-sale-and-farming-from-co-down-to-norway-205957

another podcast from land league about the sale.

davidk1394

All I have to say to every dairy farmer here is welcome to the club. Drystock and tillage farmers have been treated like sh#t for years with low prices. Every time the tillage farmers wanted a price increase for grain all the dairy fellas were up I'm arms. The milk price is on the floor for only 6 months it will be interesting the see what lads will still be milking in 2 years time. And yes we did borrow ourselves and got caught out. We decided to sell land and paided off the loan and now going better than ever.

rangler1

davidk1394 wrote: »

All I have to say to every dairy farmer here is welcome to the club. Drystock and tillage farmers have been treated like sh#t for years with low prices. Every time the tillage farmers wanted a price increase for grain all the dairy fellas were up I'm arms. The milk price is on the floor for only 6 months it will be interesting the see what lads will still be milking in 2 years time. And yes we did borrow ourselves and got caught out. We decided to sell land and paided off the loan and now going better than ever.

Like drystock farming, there wlll come a time that borrowing won't be sustainable in dairying too because while there's a margin farmers will be expanding or entering dairying and overproduction will get worse.
Drystock farming has been a race to the bottom for years and dairy farming has all the symptoms now.....wouldn't like to be a new entrant with loans now. People on here talking about prices being cyclical from now on are being extremely optimistic

Panch18

rangler1 wrote: »

Like drystock farming, there wlll come a time that borrowing won't be sustainable in dairying too because while there's a margin farmers will be expanding or entering dairying and overproduction will get worse.
Drystock farming has been a race to the bottom for years and dairy farming has all the symptoms now.....wouldn't like to be a new entrant with loans now. People on here talking about prices being cyclical from now on are being extremely optimistic

People will go bust much much quicker in dairying than any other enterprise, but I don't think most realise that yet because on paper it's much more "profitable".

Never mind the amount of work, stress and physical, mental and emotional draining that it has and people, and for a lot it's probably not worth it, whether they realise it or not

whelan2

I dont think its rocket science, sheep numbers reduced ,now theres money in sheep. I cant see were we are going continuing to expand in dairy at **** milk prices. When will people call a halt

Milked out

whelan2 wrote: »

I dont think its rocket science, sheep numbers reduced ,now theres money in sheep. I cant see were we are going continuing to expand in dairy at **** milk prices. When will people call a halt

With dairy that halt will have to come worldwide to improve our price. If factories here go below a certain kill price will rise for beef and sheep so local supply has more of an effect. Obviously trade deals and the like could change that for the worse for dry stock as well as South America look for more access

rangler1

whelan2 wrote: »

I dont think its rocket science, sheep numbers reduced ,now theres money in sheep. I cant see were we are going continuing to expand in dairy at **** milk prices. When will people call a halt

No money in sheep either, if this new sheep subsidy comes, it'll go straight to the processors unless they base it on a ''quota'' system, to stop an increase in sheep nos

whelan2

Ifa man was saying last night the funding isn't there for these schemes. Young farmers, glas etc

Willfarman

The halt will never come lads. Unless it's enforced with quota!!!!!!!

Ironically though I think the medium dairy enterprise 40 to 60 cows along with mixed farming and maybe the wife being a hen laying an odd egg are the snuggest and will see a lot of the big thinking go getters go bust. Simply because they were reared on f all money, are used to living on f all money, and often are fearful to high hell of borrowing money and go by the mantra that if I can't buy it il do without.

With regard to what debt a cow can carry I was considering entering milk a few years back,
and my gut instinct was € 1500 per cow was definately enough debt for a cow to sustain a twist for the poor bugger in the pit. @ 70 cows on 100acres. Needless to say I persisted with dry stock wit no debt to carry!

And not through business acumen did I abstain from the boarding the great Coveney milk train to China..
It was laziness.
I look at the lifestyle even still and prolaim loudly to myself. ****K THAT!!!

rangler1

whelan2 wrote: »

Ifa man was saying last night the funding isn't there for these schemes. Young farmers, glas etc

Just as well, the less political interference in markets the better for everyone, any increase in sheep nos now will only be to the detriment of lamb price

pedigree 6

Willfarman wrote: »

Ironically though I think the medium dairy enterprise 40 to 60 cows along with mixed farming and maybe the wife being a hen laying an odd egg are the snuggest and will see a lot of the big thinking go getters go bust. Simply because they were reared on f all money, are used to living on f all money, and often are fearful to high hell of borrowing money and go by the mantra that if I can't buy it il do without.

I think you have me there in that without the laying hen.
I would be fearful of taking out loans because I wouldn't be that big in the first place to pay them back. The only loan I took out was for the tractor and that was an ordinary bank loan not from a finance company. I was going to join a discussion group but I was afraid they'd be a bit snobby plus I didn't want my finances being discussed and I was afraid it would be a competition type of thing to see who could out do the other. Probably way wrong but i'm happy the way I am.
I always pay my bills at the end of the month and my father has it drummed into me to do so otherwise they could get out of hand.
Saying that the milk price is having an effect on me as well and i'd have a f all sfp (not getting into that again).
If any work needs doing on the farm I always try to do it myself first building, fencing etc. but I have my limits and know when to get a professional in.
Sin è.

Timmaay

pedigree 6 wrote: »

I think you have me there in that without the laying hen.
I would be fearful of taking out loans because I wouldn't be that big in the first place to pay them back. The only loan I took out was for the tractor and that was an ordinary bank loan not from a finance company. I was going to join a discussion group but I was afraid they'd be a bit snobby plus I didn't want my finances being discussed and I was afraid it would be a competition type of thing to see who could out do the other. Probably way wrong but i'm happy the way I am.
I always pay my bills at the end of the month and my father has it drummed into me to do so otherwise they could get out of hand.
Saying that the milk price is having an effect on me as well and i'd have a f all sfp (not getting into that again).
If any work needs doing on the farm I always try to do it myself first building, fencing etc. but I have my limits and know when to get a professional in.
Sin è.

Hmmmmm I can draw parallels here with most of your post, except the DG bit ha, I'm sorry that's just ridiculous, I've got loads and loads out of my local DG, very quickly you find out no farm at all is perfect, it's almost comforting after a crap spring like this to go into another farm and see that he's also had damage to his fields, had to feed extra meal and taking the hit on solids etc, and if we can all share problems and possibly solutions and ya walk away after it with any new idea or solution then it's well worth it.

20silkcut

The worrying aspect in my opinion is the Downward pressure on the SFP/BPS.

what is more worrying is the acceptance among the farming community of this.
And now this new Mercosur deal threatens all kinds of calamity.

The new reality is non existent skewed markets and shrinking supports.
They are having it both ways.
Farmers are being screwed backwards and forwards.

MIKEKC

whelan2 wrote: »

I dont think its rocket science, sheep numbers reduced ,now theres money in sheep. I cant see were we are going continuing to expand in dairy at **** milk prices. When will people call a halt

If the expected e20 a head for sheep materialises numbers will rocket

Farmer Ed

The scary thing is that in yesterday's journal
Dutch bank staff are reported as saying they are expecting to be employed in at least 3 more cork farms.

MIKEKC

Farmer Ed wrote: »

The scary thing is that in yesterday's journal
Dutch bank staff are reported as saying they are expecting to be employed in at least 3 more cork farms.

Why do think it's scary? It might stop others from borrowing crazy money, if it isn't already to late.

jaymla627

MIKEKC wrote: »

Why do think it's scary? It might stop others from borrowing crazy money, if it isn't already to late.

Don't really think it will, tams 2 scheme is to much of incentive for lads that they simply can't resist investing in shiny new parlours/sheds/more cubicles....
Over 1700 applications already for the dairy equipment scheme and it shows no sign of letting up

Milked out

jaymla627 wrote: »

Don't really think it will, tams 2 scheme is to much of incentive for lads that they simply can't resist investing in shiny new parlours/sheds/more cubicles....
Over 1700 applications already for the dairy equipment scheme and it shows no sign of letting up

Once they do their figures away with them. Everyone has there own situation, all we can do from others is learn not copy. Perhaps better to plan at investing when times are tight only what's needed will be done, if borrowing it will have to paid over a number of years anyway good and bad.

Muckit

jaymla627 wrote: »

Don't really think it will, tams 2 scheme is to much of incentive for lads that they simply can't resist investing in shiny new parlours/sheds/more cubicles....
Over 1700 applications already for the dairy equipment scheme and it shows no sign of letting up

God TAMS or no TAMS l had a quick look at journal there and a 'handy' 4 bay single slatted shed was coming in at nearly €70000!! You know, l don't have half enough meas on what the oul lad left me!! I'd be only able to dream of doing the same again with the way beef farming has gone. Will have it all on to replace slats on one l have when the time comes!!

tractorporn

Muckit wrote:

God TAMS or no TAMS l had a quick look at journal there and a 'handy' 4 bay single slatted shed was coming in at nearly €70000!! You know, l don't have half enough meas on what the oul lad left me!! I'd be only able to dream of doing the same again with the way beef farming has gone. Will have it all on to replace slats on one l have when the time comes!!

I saw that drawing and costings on the journal I nearly fell over. I reckon you'd build it for closer to 25k if you didn't have to build to grant specs.

On the theme of borrowing dad has left the farm with zero borrowings and although we need extra slurry storage space to comply with nitrates I'm very reluctant to borrow having read a little on what the impact of the Mercosur deal and Brexit will have on beef. I'm actually leaning towards dropping numbers to become compliant rather than exposing the farm to any risk. Maybe I just don't have the balls like the dairy boys?

Muckit

Look lad you know your own state of affairs best. I wouldn't be said or lead by anyone. Borrowing money is not to be taken lightly. Everyone has different commitments, mortgage, kids, elderly parents, car loans etc...

My generation are already different from our parents from the get go. We have big mortgages. And sure isn't it better to have money stuck in a family home than acres of land or a shed with little return? Some lads' cows live in better and more expensive houses than themselves!!

BoatMad

I was extremely surprised , as a non farmer ( worked on farms, supplied farmers, am from a rural background, but ran a conventional business ) when I heard the glee at the removal of milk quotas and the idea that a boom time in milk was due, anyone familiar with normal supply and demand, will tell you that when a commodity such as milk is over produced, the price will fall. There is no floor or ceiling, its a function of supply and demand .

Then you add issues with market access and things just get worse.

How you hear the same figures screaming for the re-introduction of quotas or price controls or intervention.

A farm is either a business or a lifestyle, in reality it can't be both.

melissak

_Brian wrote: »

Like everything else there so many hidden agendas at play..

I know someone working in a bank in Meath, over lending to farmers. Now, when the dairy expansion lark was muted the banks instructed them to get as much money out against land as assets as they could. Loans were made on very ropey business plans. When I questioned what milk price the plans were based on I was told no less than 35c for the next 5 years. This person was donning wellies and doing farm "inspections" and them not knowing one thing about farming never mind proper dairy business - having never stood in a parlor ever.

So yes, farmers take on loans at their own risk, but there are other agendas in the background with banks needing to "sell" products. If your being instructed to lend out X amount of money what better asset to lent against than land.

The bank's and their cronys are land banking again. Be warned. Of course they love to see bad plans well secured.