Warning to Kilkenny dairy farmers - milk price predicted to fall below production cost in 2026

Analysis of ifac client accounts reveals milk production costs averaging 42 cpl for 2025, based on nine months of actual figures and three months of budget projections.

With co-ops dropping milk prices in response to downward market pressure, dairy farmers should be preparing for the possibility of base prices starting below production costs in 2026.

Ifac is the top 10 professional services firm, providing specialist advice to the farming, food and agribusiness community.

“The time for financial planning is now, not when cash flow problems have already emerged,” warns Philip O’Connor, Head of Farm Supports at ifac.

“Farmers need to develop detailed cash flow forecasts immediately, projecting monthly milk income at various price scenarios against fixed commitments like loan repayments and operational expenses.”

Conversations Critical
Noreen Lacey, Head of Banking at ifac, emphasises the importance of proactive engagement with financial institutions.
“Banks are far more willing to support customers who approach them early with a plan, rather than those who wait until they’ve missed payments,” she advises.

“Farmers anticipating cash flow pressure or difficulty meeting repayments should contact their bank managers now to discuss options before problems escalate.”

Ifac recommends farmers who do not have a cash buffer to secure working capital facilities now, while operating from financial strength, rather than waiting until cashflow squeeze sets in.

“Having these facilities approved now costs relatively little but gives you options if cash flow tightens - options you may not have if you wait until you’re already under pressure,” Noreen Lacey added.

Support Available
Ifac’s Farm Support team are available to help farmers navigate these challenges through cash flow forecasting, tax planning, and banking relationship management.

For expert financial advice, farmers should contact their local IFAC office or visit www.ifac.ie.
With its growing 30-office footprint, today ifac boasts a dedicated team of 580 professionals supporting almost 30,000 clients across the country.

This includes supporting 18,000 producers, 3,000 clients in the agri-food sector, and 7,000 SMEs with a full suite of professional services, including accounting, tax, audit, corporate finance, consultancy, corporate recovery, payroll, financial planning, company secretarial, and business valuations.