Are your farm finances structured correctly?

Many farming businesses have a significant overdraft facility in place to enable continual trading through periods of natural troughs in the cash flow. Very often we see capital expenditure put on the overdraft, which can result in the negotiation of an increase in overdraft facility at the next renewal, or sometimes sooner.

The overdraft facility does have a number of advantages, most importantly it provides flexibility. However, borrowing on an overdraft facility is often an expensive way to borrow money, with high annual arrangement fees, and higher interest rates than other options. An overdraft facility also does not offer a structured repayment plan.

Restructuring of the farm finances could therefore save the farm money, but also offer a structure to repaying the debt over future years to reduce the total borrowings of the business. Establishing the amount to move from an overdraft facility to a more formal facility can be very difficult. To establish a sensible amount to transfer, it is often necessary to prepare 3 – 5 year cash flow projections to enable projection of forward bank balances.

Our Business Projector software has been designed to demonstrate the effect of different options for structuring your farm finances in a clear, easy to understand format.

If you would like to look at the options for restructuring your farm finances, or would like to investigate the best way of funding an upcoming capital purchase, please give Sam a call on 01454 614624 or 07777 696080, or email sam@kellyfarmconsulting.com.

New grants available for Robotics and Slurry Management Equipment

DEFRA have today announced a new round of grant funding to cover Farm Productivity, Water Resource Management and Forestry Productivity.

The Farm Productivity category covers the installation of Robotic equipment (including robots for milking), and Slurry Management equipment. There is also provision for food processing if you are interested in diversifying.

The Water Resource management grants provide funding for above ground water reservoirs.

Grants are for a minimum of £35,000 and will cover 40% of the cost, so the minimum project value will be £87,500.

These are competitive grants, so you wont automatically get the funding. To maximise your chances, the application must clearly demonstrate how your project fits with the priorities.

Full details can be found at https://www.gov.uk/guidance/countryside-productivity-scheme

Deadline for applications is 3 December 2018, so we do have a while, but I would suggest starting work as soon as possible as it will be more work than you think!

If you are interested in putting in an application, and would like some assistance with the application, please contact us as soon as possible. We expect to be very busy with applications so the sooner you contact us the better!

Maize crops - don't get caught out!

The season has been fantastic for maize growing and a lot of the crops we have seen will be ready to cut in the next 10 days, much earlier than we would normally see.

10 Day Forecast

The 10 day forecast shows a much higher chance of rain over the next 7 days with rain easing off from 14th September, so be ready to go then as the crop could well be ready.

Maximise Quality

Many crops are very tall this year, and whilst cob development has been good, they are out of proportion to the stem compared to a ‘normal crop’. Consider cutting higher to increase the total starch content in the clamp. This is a fine balance between quality and quantity!

Additive?

As it stands now, there should be little need for any additive – the best additive in our view is diesel in the tank and extra rolling.

If you would like your maize crops checked, please give us a call.