Bank finance of €3k to €6k/cow on offer
Dairy farmers seeking finance for farm expansion should be able to secure funding of up to €3,000/cow this year if their businesses are fundamentally sound, a spokesman for AIB told farmers at the Emerald Expo in Kilkenny on Friday.
Pat O'Meara, agri-finance specialist with AIB, told the conference that although it was "dangerous to be talking about rules of thumb", finance packages of up to €3,000/cow should be possible.
He added that finance of €3,000-6,000/cow could be available to "good farmers", while anything over €6,000/cow would require a "very good farmer".
Mr O'Meara said the bank would take into account the track record of the farm, including trading accounts, variable costs on the farm taken from the Teagasc profit monitor and the single farm payment.
He added that the single farm payment would have a major bearing on the bank's decision to lend.
When questioned, the AIB man said 20-year loan terms were available for expansion (at 4.4pc), but the asset being bought would be key to securing finance. He maintained that given the volatility of milk markets now and in the future, it would be advisable for farmers to consider a 20-year term.
The finance specialist was reacting to figures produced by Laois farmer Kevin Flynn who told the conference that he doubled milk output on his farm by buying a neighbouring farm.