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Finance: Most development work on dairy farms takes place in the autumn. Now is the time to be planning, both for the work itself and also how to finance it. Cash flow will be an option for some, but it shouldn’t be the only option.
Having a reserve of cash on hand is critical to get through downturns and tough times.
Borrowing money is not a crime, once the investment makes sense and improves the overall business.
There are currently three main options for borrowing money; traditional bank finance for a term loan.
These loans are usually secured against an asset, so can be for long term and interest rates vary from 3 to 5%.
The next option is the MilkFlex loan which can be taken out for a maximum of eight years (or 10 years if milk price is bad) and used to finance anything from stock purchases to farm buildings, but not land.
The repayments are taken directly out of the milk cheque in the peak months and reductions in the repayments are triggered automatically when milk price falls. Interest rates are currently 3.75% above the Euribor, which is currently at 0%. No land is taken as security for this loan.
The third option, which is unsecured up to €500,000 is the new Future Growth Loan Scheme from SBCI. This is for on-farm development but excluding land or stock purchase.
The loans are approved by SBCI and drawn down through a bank. Currently, Bank of Ireland is the only bank offering these loans. Interest rates for loans of less than €250,000 are in the order of 4.5%, or 3.5% for loans above €250,000.
Water quality: Dairy farming’s environmental footprint was to the fore at Moorepark last week. The crude protein content of dairy rations and its effect on water quality was mentioned at a number of boards.
High protein diets cause cows to have high nitrogen content in their urine.
This causes problems for water quality and ammonia emissions. The indications from regulators are that feeding high crude protein rations will be looked at more closely in the future.
Milking cows require a crude protein content in their total feed of around 17%.
Spring grass is very high in protein at around 24%, while grass now is still high at around 20%. This means that the crude protein in meal does not need to be high for the diet to be balanced.
Feeding a 12% crude protein meal when cows are at grass is more than sufficient and if this can be provided from locally grown cereals then all the better.
The other issue relating to water quality is fertiliser use. How can we grow grass when nitrogen use is limited? Growing clover and having optimum soil fertility were the messages from Moorepark.
When soil fertility, particularly pH is correct, all other nutrients are more available to the plant for uptake. Now is an ideal time to spread lime.
Breeding: Most farmers are in the last few weeks of the breeding season. Keep a close eye on stock bulls for signs of burnout and lameness.
If you suspect a bull isn’t performing, replace him or go back to AI. Bulls often get cross at this time of year so safety is paramount, especially with children on summer holidays. Never trust a bull.
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