Financial planning key to profits

BEING a technically efficient dairy farmer will be absolutely necessary in the future. But it will not be enough, said Tom O’Dwyer, Teagasc Head of Dairy Knowledge Transfer, at the recent dairy expansion events for Agricultural Science Association members.

Dairy farmers will also be required to think strategically and plan financially. This will include the ability to assess on-farm investment options, prepare annual and multi-annual cash flows, and identify and manage risks.

When a profit is made you still have decisions to make on how it is best distributed. Looking at discretionary or free cash flow will tell you how you can exert some control over this allocation.