A heavy utilisation of overdraft facilities is expected as we approach the back end of 2026, Susan Maher, agri development manager with Bank of Ireland, has said.

Speaking at the National Ploughing Championships, Maher said that "at the moment, overdraft utilisation is running at 13% to 14%", meaning there is "a lot of headroom within approved limits that farmers haven’t utilised".

She added that Bank of Ireland has not yet seen the impact of cashflow issues on lending but the bank knows, anecdotally, that debt is sitting with merchants.

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Advice

She said with “tax bills looming coming into the back end of the year, we expect to see a heavy utilisation of overdraft facilities”.

In terms of advice as the winter months approach, Maher encouraged farmers to do a stock take both on fodder and on finances.

She urged them to look at their current account for the warning signs that they might be running into difficulty and encouraged farmers to engage early if they are.

Maher said that biggest financial mistakes farmers make is structuring debt incorrectly, rather than over-borrowing.

Refinancing

She said Bank of Ireland is doing considerable refinancing of capital investments that took in the past two years, where cash flow was used to fund expenditure.

These investments are being refinancing over more appropriate terms.

“Farmers would rather use their own money than borrow, but sometimes putting a more long-term structure [on loans] is better for farm cash flow,” Maher said.

She described the demand for land as “insatiable”, with lending this year dominated by land purchase.

Overall, she said there is a positive outlook for farmer lending, with lending across the sector is at its lowest level in 25 years.