To build or not to build? Milk price shouldn't affect your decision
We meet a young couple who took the plunge into expanding their dairy farm despite the risks
Dairy farmers love a new building project. It's a welcome diversion from the daily routine of milking cows, spreading fertiliser and record keeping.
The buzz of the heavy plant turning the first sod in the green field alongside the farmyard, the panic around the pouring and levelling of concrete and, of course, the new shed rising up into the clouds are new satisfying experiences and even milestones in the history of the farm business.
The neighbours find excuses to call for a look, agribusiness sales reps appear like bees on honey all the while fuelling the needs and wants of the farmer project manager.
The month of June used to be a very dangerous time for the commencement of spontaneous farm building projects - first cut silage in, cows back in calf, children on holiday from school for cheap labour and that big May milk cheque putting some welcome spending power into the current account.
Many badly planned farmyards and farm buildings have resulted from such urges. Today's farm building projects require a lot of forward thinking and planning, with local authority planning permissions, grant applications and raising finance all taking long periods of time for approval.
However, many dairy farmers out there who are 'all ready to go' in 2016 now have a big question mark over the decision to give the builder the call to go ahead due to the significant fall in the milk price.
Farm business financial plans done for those applying for bank finance were calculated on a base price of 30c/l, which seemed conservative at the time, but with base milk price around 25c/l, the surplus cash available for repayment of a new loan in many cases has disappeared. So should the new building project be put on hold?
Edward and Nora presently milk 145 spring calving cows, rear all replacements and run a small beef enterprise on a 220ac holding in Co Tipperary.