Majority of farmers not up to speed on production costs
The majority of farmers do not have a true grasp on the cost of their production system, warned Gareth Davies from Ireland Genetics UK.
Mr Davies who travels extensively throughout the UK where he markets semen from EBI bulls from NCBC, said all farmers can instantly tell him how many litres their cows are delivering but few can provide the finances.
"The majority of farmers I come across do not have a true grasp of their cost of production. That absolutely amazes me. To me farmers are manufacturers," he said.
"If you were in any other form of manufacturing business you would go bust if you didn't know your cost of production."
He pointed out there was no such system that was a profitable system. "It is the management of the system that makes it profitable," said Mr Davies.
"Whenever I go on a profitable farm it has got nothing to do with the system, it has everything to do with the team that is running the system."
At the conference, Teagasc financial management specialist, Kevin Connolly, said farmers must maximise revenue but have a clear awareness of the cost of generating that revenue.
He said farmers often focused on the cash that was coming in over the winter months but they must also examine the outputs. Mr Connolly urged farmers to get to grips with their finances by carrying out a monthly cash flow budget on either paper or a computer to get a clear view of their finances.