First Published 06/05/2025 Farming Independent
Michael Brady.
Agricultural Consultant and managing director at Brady Group: Agricultural Consultants & Land Agents. The Lodge, Lee Road, Cork.
Tel: 021- 45 45 120 email: mike@bradygroup.ie
‘A Good Year’ is the title of a 2006 romantic comedy starring Russel Crowe as a failed London banker who inherits his uncle’s vineyard in Provence South of France.
The current ‘good year’ with weather and record prices in Irish farming are mirroring the idyllic setting in the iconic film. However, we all know that farming profitability is cyclical and as sure as current profits soar there will also be challenging years ahead. So how should farmers manage the surplus cash in their farm current accounts this year? Here are 10 do’s and don’ts.
- Enjoy it
Farmers have a reputation for complaining when prices and weather are poor, now is an opportunity to enjoy life when times are good. Take some time off and enjoy some experiences outside the farm. Yes, once can travel abroad but when this country has good weather it is second to none.
- Don’t make rash investment decisions
In the past when prices and weather are good farmers would start an unplanned project in the summer months. Dairy farmers in particular are guilty with the proceeds of a strong May/June milk cheque. This could be a new building, land reclamation or big grass reseeding project. Nowadays, this is not as easy with planning permission and TAMS grant application requiring up to 12 months for pre planning to be compliant. Take a step and consider is this an impulse project or is part of the ‘grand plan’ for the farm business.
- Plan for your tax liability
Farmers don’t like paying tax, nor do they like the paperwork required to keep accounts updated. Many larger dairy, beef and arable farmers are already farming in company trading structure to minimise tax. If you are behind with your accounts and tax liabilities, even though the sun is shining make sure you urgently make an appointment with your tax consultant. This could avert a nasty surprise in autumn 2026.
- Finance capital expenditure
The quad bike has just packed up, a new one is €15,000, there is enough cash in the current account to buy a new one. It is tempting to just pay for it and avoid organising bank finance. Every farm business situation is difference but in general new machinery should be bank financed and retain the comfort in your current account for leaner times.
- Catch up on maintenance and repairs
It is a great time to catch up on maintenance and repairs around the farm; paint the sheds, resurface the farm roadways, repair that shed and spruce up the farmyard. In fact, it’s a good idea to go a bit further and add something new like resurface the farm entrance, add a new electronic gate and a farm sign. This creates a better work environment and serves as an everyday reminder of good times.
- Pay down creditors
It is a good opportunity to pay down trade creditors as a gesture of thanks for their support in leaner times. Feed and fertiliser merchants, vets, contractors and other professional service providers often continue to provide uninterrupted service to farmer clients when times are tough and payment is slow. This can be abused by some farmers but in general loyalty is rewarded with better service. This is a chance to say thank you we appreciate your service.
- Save or pay down bank debt
Again, this depends on the individual farm business. If your farm business has existing bank debt and is in a development stage, I would not recommend paying down bank debt faster than the agreed repayment schedule, put the surplus cash in a deposit account, it may prove very useful at a future date.
- Off-Farm investment
When a successful farm business is fully developed and regularly throwing off surplus cash on an annual basis, off-farm investment should certainly be considered. The level and type of investment depends on one’s attitude and appetite for risk
- Capital Investment / Farm Business Plan
If your farm business has a clear plan and capital investment schedule for the future, significant surplus cash earned in a particular year can facilitate carrying out a development earlier than planned. However the message is that it has to be in the Plan. The farmer presently asking the question ‘should I change the tractor?’ is a sign of a farm business without a plan.
- Charity
People have different values, creeds and attitudes to charity, it’s a personal choice. When one has the good fortune, surplus time or cash, one can invest time and or money in those less fortunate or donate to charity which has meaning for you. it can be very satisfying.
Farming is a twenty-four seven, three hundred and sixty five days a year job, it has its highs and lows. 2025 so far seems to be the year that keeps on giving go and enjoy a ‘Good Year’.