Monthly Archives: July 2017

Past Farm Investment Experiences

One of the last periods of significant on-farm investment occurred from 2006 to 2008, supported by the grant aid provided under the Farm Waste Management Scheme. It is estimated that gross on-farm investment was over €4.5 billion in that period, peaking at €2 billion in 2008. In addition to the investment undertaken from cash flow and farmers’ own resources, lending to the sector reached record levels at this time.

The difficulty for many farmers who invested at that time was that this period of significant investment was quickly followed by a relatively short period of depressed commodity prices, poor weather and a somewhat lengthier period of high costs. This led to a dramatic reduction in farm profitability in 2009 (farm incomes fell by 41% between 2007 and 2009) and many farmers experienced a very difficult period with cash flow stress common on many farms.

There are some lessons which we can learn from this period, which may be useful for farmers considering future farm investment.

Don’t Base Decisions on One Good or Bad Year

Many farmers undertook investment supported by strong average farm incomes in 2007 and the availability of grant assistance. Decisions to invest in the farm should never be made based only on a good year or on high performance expectations but rather on the longer term likely performance and actual capability of the farm. Our advice to customers is to take a multi-annual view and examine the performance of the farm over the previous three to five years taking account of variations in the actual outcome and profitability.

Fully Cost Any Investment

Farm investments often take longer to complete and cost more than originally planned. This was the case in 2007 and 2008 when the cost of steel and concrete increased considerably and added to on-farm development costs. Before undertaking any farm development, it is important to cost the investment fully and it is prudent to include a contingency cost of around 10-20% in all plans. To get a realistic idea of the potential cost involved, and to learn from the experiences of others, it is good advice to take the time to visit similar projects and get quotations from a number of reputable suppliers.

Understand Impact on Cash Flow

During periods of capital investment, good cash flow management is key. While many farm investments will contribute to increased profitability in the longer term, they can place immediate pressure on the farm current account. This is particularly the case where some of the investment is funded from cash flow. Where farm investment is carried out from cash flow, it can compromise the ability of the farm to withstand a cyclical or unexpected downturn in the sector and a period of low margin income. Many of the difficulties in 2009 were compounded by the fact that savings on many farms had been depleted to support farm development in the previous years. Before undertaking any farm investment, it is desirable to complete a cash flow forecast to understand the effect of the investment on the cash flow of the farm.

Structure Loans Correctly

Ideally, a loan should be structured to match the useful life of the asset being financed. It is important not to put undue pressure on farm cash flow by seeking to repay a loan in an unrealistic timeframe which comes from trying to finance capital expenditure items over too short a period. The shorter the loan period, the higher will be the immediate repayment requirements.

Build a Buffer Fund

Volatility has become a feature of the sector in recent years and it is important that farms can rebound quickly from periods of low returns. During periods of higher returns, farmers should seek to build a buffer which can be utilised during periods of cash flow pressure and low income returns. This buffer can take different forms, e.g. building a cash reserve, reducing creditors, improving soil fertility and / or forward purchasing of inputs. Those farmers who undertake significant investment tend to be more exposed to the effects of volatility as savings may be depleted and bank repayments tend to be higher. In 2009, a period of low market returns and higher costs coincided with higher bank repayments on many farms.

Strategies for Your New Business

Got a new business, or simple looking to increase your brand? Making your mark from the start can be tough, but in terms of marketing your business, your product or your services, there are some simple steps to follow.


Start with the logo

A logo helps distinguish your business from all the others out there that sell similar products and services. The pictorial nature of a logo – even if it’s just words printed in a stylized way – helps customers remember you and helps them think of your company as a reputable small business. Include an image that is in some way associated with your industry. Unless you are an artist or are very proficient in graphic arts, it’s best to have your logo professionally designed for you. Once you have a logo, be sure to include it on everything associated with your business. It should be on your website, social media pages, business card, letterhead, envelopes, fliers, giveaways and print advertising.


Create a slogan

Slogans (also called taglines) are very short phrases that express what your business is about and – more importantly – a beneficial result your customers derive from the business or product. When you create a slogan it helps to distinguish your business from others and make it more memorable. M & M’s slogan, “Melts in your mouth, not your hand,” is one example.


Get ready to hustle

Brand awareness is simply marketing and although social media and other forms of digital marketing have added new options, nothing has changed. The people who hustle the most will find the most success. Don’t look to technology to be your hustler. It’s all up to you. Online marketing is only one channel among all of your networking and offline strategy. Door to door and cold calling are not dead.


Get others involved

You don’t have to be the only one that hustles. You need some super fans hustling for you. In modern advertising speak these are, “brand advocates.” Maybe they had such an awesome experience that they talk about it online to their large social following. Leverage those people. Offer free product or a referral fee for anybody they send to you.


Find influencers

Do you know how Uber rose to power? The company looked for the big name social media influencers and offered free rides. Local and regional bloggers with a huge following will work too.



You’ve seen infographics—those illustrations filled with facts and other valuable information. If your business is in the consulting sector or some other professional or semi-professional niche, leverage your status as an expert and create a shareable infographic full of facts and figures that your potential customer would want to know. Don’t skimp on this, though. Make it really good. Hire an expert to design it.

Moran on this Year’s Dairy Summer Tour

The Irish Grassland Association Dairy Summer Tour is a firm fixture on the farming calendar, attracting hundreds of farmers from around Ireland as they share their knowledge, network and socialise. Ahead of this year’s event, we caught up with Cathal Moran who is hosting one of the tours on his Kilkenny farm on the 25th July.

Lessons in Leasing

Each year, the event explores a topical theme and 2017 is no exception. Cathal explains: “The theme is Farming on Leased Land. I know the other host farmer, Jamie Kealy, farms on 100% leased land and ours is north of 60%.”

On the day, Cathal will be sharing the practical knowledge on leasing that he’s built up in his 28-year farming career. For example, when it comes to leasing, one of the most important factors is the relationship between the land owner and leaser. He explains: “It’s crucial. Every relationship is built on trust, and when leasing, the land owners become one of your key stakeholders. You have to look after them in a proper fashion. They have to know their land is being looked after and they have to trust that – and vice versa. So be totally open. It’s not a game of cards. There has to be full transparency in both directions.”

Another key stakeholder, Cathal explains, is the bank – particularly when it comes to cashflow. He notes: “They’d be a key stakeholder too and you have to get on well with them or you’re fooling yourself. What is banking or lending about? It’s about relationships and relationship building. There’s an old thing that used to be said, You lend to the person not to the business. AIB have been nothing but supportive over the years.”

Down to Earth

The authenticity of the Grasslands tour appeals to Cathal and he tries to attend any year he can. He explains: “I think because there’s no trade involved in it, there’s no vested interest in it. It’s basically farmers telling their story as they see it. The people behind it – the Grassland Association – they’re 70-75 years at it. They’re a voluntary organisation with nothing but the best interests of dairy farmers at heart. It’s a practical occasion where people tell it as they see it.”

Talking Sustainability

With 2017 designated as the Year of Sustainable Grassland, the host farmers will also be sharing their tips on sustainable grass production. Cathal notes: “You can be paying money for leased land and it’s not achieving its maximum benefit. It’s not just about growing grass, it’s about sustainability. I’ve seen in the news lately that the most carbon efficient farms tend to be the most profitable and sustainable in terms of how they produce grass.”

Soil fertility plays a key role in sustainable farming. Cathal explains: “Soil fertility isn’t just about pH or P or K or sulphur. It’s about all of them and getting them up to the optimum. At that point, all you have to do is put in what you take out and you’re growing the maximum amount of grass in conjunction with good grass varieties. But why have a weak link? Why put a pile of nitrogen on to something that the pH is the limiting factor to? It’s a question of getting it all right and knowing what’s going on, sometimes learning the hard way.”

A Positive Outlook

One of the things Cathal enjoys about the tour is being surrounded by positivity. “I think usually the type of people you see are positive people and that kind of reinforces what they’re doing and where they’re going. There’s usually a lesson or two, good and bad, to be learnt from it. And a bit of adrenaline floats around. The feel-good factor is afloat,” He says.

As for dairy farming in Ireland, Cathal is optimistic about the future and acknowledges that the removal of milk quotas has had a massive impact on Irish dairy farming. He notes: “It’s probably the most optimistic period we’ve ever had. Once quotas went, all the doors opened up. Even going back to when it was announced in ‘07/’08, there was a fundamental mind-change in people. It’s great because suddenly you have new entrants, and you need that. You need new blood to keep any industry thriving. It’s a vibrant and optimistic time.”