Cash flow headaches ahead for farmers warn banks
FARMERS are being urged to plan carefully for a potentially "very difficult" cash flow period in the run-up to next summer.
Senior agricultural executives for three of the main loan providers to farmers - AIB, Bank of Ireland and Ulster Bank - have said they are "very conscious" that farm families may require additional borrowings to tide them over until May 2016.
Strong incomes in the dairy sector during 2014 provided some farmers with easier cash flow so far this year.
However, the combined effect of higher income tax bills for 2014, and hefty super levy liabilities coupled with the lower milk prices, is expected to hit many farmers before the end of the year.
Sean Farrell, head of agri business with Bank of Ireland, confirmed that the bank is "already receiving some demand from farmers who are planning their cash flow between now and the end of the year".
He said they were advising individual farmers to contact the bank to indicate their likely requirements "sooner rather than later".
North Tipperary based, Pat O'Meara, regional agri advisor with AIB, said the bank was aware that pressure "may arise as tax bills fall due this autumn which may require bank finance". He said they were prepared to offer facilities for a phased repayment over the following months.
Mr O'Meara said that managing finances until "getting to milk cheques in May 2016 will be the most difficult period" for many farmers, with some needing assistance as the full effect of the lower milk price this year impacts on their cash flow.