Farmers counting the cost of weather and prices double whammy
Farmers will be counting the costs of spring 2016 for months to come, as banks and farm advisors predict a severe tightening of cashflow.
Farmers suffered a double whammy when bad weather forced the purchase of extra feed stocks at a time when prices in some sectors were stagnant or falling.
Some sectors have been particularly hard hit with milk and grain prices plummeting this year.
Advisors are now reporting that farmers are looking at delaying major capital projects and building work until prices improve.
Cork agri advisor Mike Brady said there were signs of a reduction in capital projects, with a number of his clients delaying spending on infrastructure where possible.
"The chequebooks are firmly in the drawer - they're not even in the pocket or in the jeep," he said. "Fellows are only buying tractors when they have to. People are putting off capital expenditure but are not ruling it out longterm.
"The average age of a farmer is 58 or 59 and they have been through cycles, good and bad, before. The price of milk can't stay where it is, as if it does there won't be milk produced in the world."
He warned cashflow on dairy farms was tight after three months of around 25c/l. "This time next year we will see real tightness if it stays at that for 12 months," he said.