At this stage in the year, with nearly half of the milk cheques received and a fair idea of what milk production and price will be for the rest of 2017, it’s important to do a cashflow budget. Some farms carried over a deficit from last year, when prices were lower. This means that the surplus in the current account is a bit slower to emerge this year than in others.

Work out how much money was spent and what is owed from the first six months of trading in 2017. Do a budget for the rest of the year, based on historical performance adjusted for cow numbers. Most of the costs have now been incurred, but significant costs remain, including labour, feed, contractor and bank repayments.

A lot of farmers will find that income will be well up on last year. What to do with this surplus cash?

A lot of farmers will find that income will be well up on last year. What to do with this surplus cash? Probably the best use of cash is to build up a buffer to withstand the next price downturn. This could be in the form of hard cash or in stocks, eg silage or extra youngstock. While the extra youngstock is a cost to carry, they are an asset that can be sold to generate cash.

Some farmers like keeping equity in the form of livestock because they find it hard to hold on to actual cash. However, extra animals are extra work. Money in the bank or silage in the pit doesn’t require daily minding.

Building contractors are reportedly very busy with lots of farm buildings lined up. Capital expenditure should be targeted at areas that give a return, in time savings or in extra productivity. Don’t pour concrete for the sake of it, invest elsewhere: genetics, reseeding, soil fertility, grazing infrastructure, etc.

Grassland farmer of the year:

The closing date for applications to the 2017 Grassland Farmer of the Year competition is next Wednesday 5 July. Application forms will be available at the Moorepark Open Day next Tuesday. The competition is part of the Grass 10 campaign and is open to all beef, sheep and dairy farmers. There is a €30,000 prize fund and to participate, farmers should be measuring grass and doing a profit monitor.

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Dairy management: time for farmers to do cashflow budget

With nearly half of the milk cheques received and a fair idea of what milk production and price will be for the rest of the year, it's time to do a cashflow budget.