Dairy Farm Cashflow: Hints, Tips or inspiration

mahoney_j · 04-09-2015 10:35am

Milked out wrote: »

That's fine this time of year gg but in spring we'll all be a lot closer to the base price. Also if that base now was at 20c it wouldn't bring him up 6 it would be closer to 4 id imagine

Agree the guy that published that article ,the guy it is based upon need a serious toe in the hole if u ask me ,as was pointed out earlier absolutely no point putting a figure like that to print as it dosnt include labour required to keep the cows milked or debt repayment and interest and also selling surplus heifers he'll be loosing money unless he can get 1500 plus for them .why try and fool the public with a willy waving figure of 21 cent when it dosnt include the full list of costs including above

pedigree 6 · 04-09-2015 10:36am

Milked out wrote: »

What ever about lads claiming what their cop is the point I was making in the context of the thread was would it be wise to sell the future of the herd if they weren't planned to be sold as part of the business anyway? One of the lads mentioned above about culling poor performers which would be a better route to go. If u have the heifer incalf most of the cost is borne already so I feel it would be better to hold them and look elsewhere to cut. Obviously in some situations there may be no choice but if there are other options.

Plus if everyone is thinking this way, you're not going to get what you expect for your heifers next year.

mahoney_j · 04-09-2015 10:37am

Greengrass1 wrote: »

You read it wrong. He said if base price hits 21 with his solids which is worth am extra 5cpl he can still stay in business

Bull**** figure gg as it dosnt include labour or cost of servicing debt .cows won't come in and milk themselves so why quote a figure like that without full cost.its misleading and sending a false message

Timmaay · 04-09-2015 10:47am

Jezz calm down will yas ha, yourman didn't say he can produce milk for 21cent/litre, only that he can tide over the next few months with the milk price base at 21 cent (which it could well hit, nobody knows), yes he won't be paying himself a penny, and yes it's totally unsustainable moving forward, but it's the harsh reality for lads who started out the last yr or so, and who are very heavily borrowed, and will have the wolves at their doors unless drastic action is taken. Its certainly a useful exercise to plan forward and see how much of a hole you'll have and how you can plan around it, what's the alternative, either put your head in the sand, or just go out protesting with the IFA etc telling the country I'm broke etc.

mahoney_j · 04-09-2015 10:57am

Timmaay wrote: »

Jezz calm down will yas ha, yourman didn't say he can produce milk for 21cent/litre, only that he can tide over the next few months with the milk price base at 21 cent (which it could well hit, nobody knows), yes he won't be paying himself a penny, and yes it's totally unsustainable moving forward, but it's the harsh reality for lads who started out the last yr or so, and who are very heavily borrowed, and will have the wolves at their doors unless drastic action is taken. Its certainly a useful exercise to plan forward and see how much of a hole you'll have and how you can plan around it, what's the alternative, either put your head in the sand, or just go out protesting with the IFA etc telling the country I'm broke etc.

But why print a figure like that in a national paper ??,if you were a tesco,dunnes etc All that is is ammunition to negotiate a lower contract price .irs creating a false impression of what we can produce a litre of milk for .every time I read an article like that I feel cheated as a dairy farmer .until such time as labour and debt repayment are worked into cop fairy tale figures like 21 cent have no place been published anywhere .anyways this is derailing a potentially very good thread ,probably should move to dairy thread

alps · 04-09-2015 11:04am

Timmaay wrote: »

Jezz calm down will yas ha, yourman didn't say he can produce milk for 21cent/litre, only that he can tide over the next few months with the milk price base at 21 cent (which it could well hit, nobody knows), yes he won't be paying himself a penny, and yes it's totally unsustainable moving forward, but it's the harsh reality for lads who started out the last yr or so, and who are very heavily borrowed, and will have the wolves at their doors unless drastic action is taken. Its certainly a useful exercise to plan forward and see how much of a hole you'll have and how you can plan around it, what's the alternative, either put your head in the sand, or just go out protesting with the IFA etc telling the country I'm broke etc.

He won't be paying himself a penny and it is totally unsustainable...that is broke.
The problem with the article by Aidan Brennan was there was no background or detail to the story....no clarity that he was not paying himself a wage, no clarity that he was selling all the seed potatoes....just a headline comment that he could survive at the 21c.
That's the maddening bit....that's the lazy journalism....the headline grabbing, and the symptom of research where the outcome never effects the pockets of the researcher.
90% of farmers will have an issue surviving at 21c because they must pay themselves, and in this for the next 6 to 12 months that will mean borrowing to live....from banks, from savings, from stock, from contractors, and credit cards....so if you can get by on a jar of sudocrem for the winter...off with you

awaywithyou · 04-09-2015 11:06am

mahoney_j wrote: »

Agree the guy that published that article ,the guy it is based upon need a serious toe in the hole if u ask me ,as was pointed out earlier absolutely no point putting a figure like that to print as it dosnt include labour required to keep the cows milked or debt repayment and interest and also selling surplus heifers he'll be loosing money unless he can get 1500 plus for them .why try and fool the public with a willy waving figure of 21 cent when it dosnt include the full list of costs including above

he's young and full of himself... in a few yrs when he has a few more grey hairs on his head.... he'll be reading an article bout some young farmer producing milk for next to nothing and he'll be like you saying he should get a good baating....

interesting his comments bout farmers with low solids not going to survive... our solids here are feck all to write home about... but my guess is one of our cows who did 35 litres yesterday is prob producing 3 times more milk than one of his jersey crosses.... (btw have nothing against crossbreds) so i think one balances out the other

leg wax · 04-09-2015 11:33am

i have to say i am now sorry to be known as a dairy farmer, what a load of whinging **** they seem to be, ..............:mad:

mahoney_j · 04-09-2015 11:48am

leg wax wrote: »

i have to say i am now sorry to be known as a dairy farmer, what a load of whinging **** they seem to be, ..............:mad:

Whinging **** nice ,wouldn't class myself as one personally more a realist than a fantasist .im happy with my lot ,.id love a better milk price but it'll come again in the mean time I'll set myself up best I can to see this tricky period through

RightTurnClyde · 04-09-2015 11:51am

leg wax wrote: »

i have to say i am now sorry to be known as a dairy farmer, what a load of whinging **** they seem to be, ..............:mad:

ohhhh, give it time
https://m.youtube.com/watch?v=S-IkWpm7TS0

:):):)

browned · 04-09-2015 11:55am

I would have thought 27c/l was a realistic break even point. The quote is that he can stay in business at 27c/l. It's just written in a round about way.

frazzledhome · 04-09-2015 12:01pm

Please, please stop fighting and giving out.

We can have this conversation on Milk Price thread. This thread started well so let's put our heads together.

Lots of people here willing to listen and lots of experience here also. Can we keep positive and post solutions

mahoney_j · 04-09-2015 12:25pm

Back on topic so
1 get up to date figures to late October to accountant and projections to year end before 01 nov
2 have 25 extra fr ,wh and Bb calves that I haven't had other years .half these will be cashed in in early October with remainder mid late January.normal cattle and bulls will be sold through feb March April .this will be used to forward purchase fertiliser and all stock vaccines and negotiate good cash deal

3 heifers all gone to be genotyped ,the very best of these will be aid and remainder put to wh bull next May .saving on Ai

4 get all bills paid for year end and start new year with clean slate

keep going · 04-09-2015 12:53pm

I was pondering this lately when a crowd we have an investment with wrote to us to say they were sending some money back end of year.no good to anyone else but it has become my contingency fund.trying to decide will I use it for a capital project and use the interest only facility thats availab, e in the structure of the loan or use it to make repayments.the plus side is repayment money is the cheapest money I can get but the downside is your effectively stretching payment over the remaining life of the loan, I suppose it depends on what the investment is for.say tractor bad idea , farm roadways and fencing a good bit more plausible

kowtow · 04-09-2015 12:56pm

If drastic measures were required, perhaps not this year and hopefully never, what would the financial implications be of culling out a chunk of the herd and producing or carrying a farm load of replacement heifers?

Haven't tried to work out the numbers yet and it wouldn't apply to us anyway, but something in the back of my mind tells me that the present value of 2 heifers in 18-24 months + the cull price of a cow, less the cost of feeding the heifers, might add up to a better profit than could be made from the cow in the meantime. It might also reduce labour costs.

As I said, drastic and I didn't think it through but my tuppence worth.

Milked out · 04-09-2015 4:30pm

kowtow wrote: »

If drastic measures were required, perhaps not this year and hopefully never, what would the financial implications be of culling out a chunk of the herd and producing or carrying a farm load of replacement heifers?

Haven't tried to work out the numbers yet and it wouldn't apply to us anyway, but something in the back of my mind tells me that the present value of 2 heifers in 18-24 months + the cull price of a cow, less the cost of feeding the heifers, might add up to a better profit than could be made from the cow in the meantime. It might also reduce labour costs.

As I said, drastic and I didn't think it through but my tuppence worth.

Tax from cow sales and loss of output the following year?

Timmaay · 04-09-2015 5:04pm

Anyone income averaging this year? With it increased to 5years surely that could help the 2014 tax bill, as you can include 2009 in the averaging. It would probably have helped me, but because me and my dad started "afresh" from a tax point of view in 2012 we cant income average any further back than then.

frazzledhome · 04-09-2015 6:06pm

Timmaay wrote: »

Anyone income averaging this year? With it increased to 5years surely that could help the 2014 tax bill, as you can include 2009 in the averaging. It would probably have helped me, but because me and my dad started "afresh" from a tax point of view in 2012 we cant income average any further back than then.

What do you mean "start afresh" are you not 2 individuals sharing the profits? Would your personal situation have changed?

Milked out · 04-09-2015 6:44pm

frazzledhome wrote: »

What do you mean "start afresh" are you not 2 individuals sharing the profits? Would your personal situation have changed?

Parents here were in income averaging and when I joined I had to stay out of it till the 3 years are up. Must ask accountant again what the story is with it. Will bring up average for poor year also

Deepsouthwest · 05-09-2015 11:58am

RightTurnClyde wrote: »

In fairness AIB do do some very good packages. Their Farm Credit Line is very good aswell.
I went in last week a borrowed a chunk of change over 5 yrs at 4% against small CapEx work that was done early this year and late last year. No hastle from them getting it. The work is done and paid for, and the loan money is sitting in the loan account and will stay there until it's needed. Cheap money, cheap insurance and there if opportunities arise.
With AIB the business manager can loan out up to 30k (if you're already dealing with them) without any HQ approval.

Did u need to have planning permission for ur building work to access that 4% loan?

RightTurnClyde · 05-09-2015 3:23pm

Deepsouthwest wrote: »

Did u need to have planning permission for ur building work to access that 4% loan?

From AIBs point of view no questions asked at all about the work or type of work, just that I had small CapEx done and more to do. No details.
From my own point of view they were small jobs (ext to silage slab, improving calving facilities in existing shed, extra BT compressor, etc that didn't need PP.

whelan2 · 05-09-2015 6:17pm

Heading to a different company to review my pension/life assurance cover on Monday, hopefully will save a few quid

J DEERE · 05-09-2015 6:56pm

leg wax wrote: »

i have to say i am now sorry to be known as a dairy farmer, what a load of whinging **** they seem to be, ..............:mad:

How are you finding your cash flow this year in comparison to the sucklers?

johnny122 · 05-09-2015 8:24pm

From my point of view cash flow hasn't been too bad as we have a small beef enterprise also. However the milk cheque has taken a big hit the last two months so I have started to think what I may need to do if downward trend continues into next year,
So here's a rough guide. Feel free to pick holes

A) cull anything high cell lameness prone or otherwise not up to the mark

don't fatten cattle this year. Sell before winter.

C) feed weanlings well over winter giving me options in spring

D) halt all unnecessary spending

C) look at buying 10 extra heifers in spring

mahoney_j · 05-09-2015 8:28pm

johnny122 wrote: »

From my point of view cash flow hasn't been too bad as we have a small beef enterprise also. However the milk cheque has taken a big hit the last two months so I have started to think what I may need to do if downward trend continues into next year,
So here's a rough guide. Feel free to pick holes

A) cull anything high cell lameness prone or otherwise not up to the mark

don't fatten cattle this year. Sell before winter.

C) feed weanlings well over winter giving me options in spring

D) halt all unnecessary spending

C) look at buying 10 extra heifers in spring

Run a beef enterprise here as well ,don't finish though sell up to 1.5 years .some will say there only booze money etc but in poor milk price year like now beef is usually good .lots of us will be glad of a few cattle and a few culls over next 10 months .nice little extra cash flow outside of milk cheque

Milked out · 22-09-2015 11:45am

Something we are all doing anyway most likely but keeping an eye on milk quality would be important too. Keeping Tbc, scc, thd, lactose, etc. right will add up to 0.4c/l in dairygold. Not much I know but counts all the same.
On cull cows those of us with space and a good bit of surplus silage it may pay to finish whereas if lads are tight on space or feed better to get rid early, either way do sums on cost to finish versus selling now

Milked out · 24-04-2016 1:21pm

Now that milk price is really hitting the lows now figured it would be no harm to resurrect another one of frazz's good ideas for threads. Twud be great if the man himself would come back to fire out any ideas. What have ye lads and ladies done or plan to do to get thru the next 12 months. Meeting advisor in next week going thru budget and plans and will meet business manager then in following weeks

Sam Kade · 24-04-2016 1:39pm

RightTurnClyde wrote: »

From AIBs point of view no questions asked at all about the work or type of work, just that I had small CapEx done and more to do. No details.
From my own point of view they were small jobs (ext to silage slab, improving calving facilities in existing shed, extra BT compressor, etc that didn't need PP.

How do some farmers get loans for 4% from AIB and they charge others 6%?

jaymla627 · 24-04-2016 3:39pm

Milked out wrote: »

Now that milk price is really hitting the lows now figured it would be no harm to resurrect another one of frazz's good ideas for threads. Twud be great if the man himself would come back to fire out any ideas. What have ye lads and ladies done or plan to do to get thru the next 12 months. Meeting advisor in next week going thru budget and plans and will meet business manager then in following weeks

60% of herd going in calf to beef bulls, will be culling any low preforming cows with poor feet/yields, planting trees in 10 acres of the worst ground in the place and also making a nice few euros selling hardwood timber that we have in forestry....

mahoney_j · 24-04-2016 4:17pm

jaymla627 wrote: »

60% of herd going in calf to beef bulls, will be culling any low preforming cows with poor feet/yields, planting trees in 10 acres of the worst ground in the place and also making a nice few euros selling hardwood timber that we have in forestry....

In the beef bull side Id wonder will the demand still be there next spring ??,cmns telling us there is a huge volume of cattle in the system and all my beef buddies are very worried re beef prices from mid summer on and for 2017 .and forestry if there ever was a way to devalue land I think that's it .
Here I ain't making massive changes ,I've a more mature herd this year as well as more cows so I'll produce quite a bit more milk and hopefully increase solids from 531 to at least 580 delievered per cow .
I also have 3 bull calves which are awaiting April proofs to come out ,1 of these in praticular has a very strong chance of making it to Ai.fingers crossed !!
Grass and grass quality going to be a big focus ,no silage ground closed and all I'm going to do is bale surpluses ,result quality aftergrass for cows and quality silage for next autumn /spring to buffer back as well as more solids produced
Reseed final 6 acres to grow more cheap grass

One thing I ain't going to do is panic or make rash decisions based on poor milk price .milk will come good again and I want myself fully prepared to milk it once milk hits the mid 30s again

Dairy Farm Cashflow: Hints, Tips or inspiration

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