04 Mar, 2024

How to manage cash in good times to prepare for the bad: Lessons from an Irish pig farmer

In the unpredictable world of finance, managing cash efficiently during prosperous times is essential to weather the storms that may follow. Drawing inspiration from an unlikely source - pig farming - offers valuable lessons in preparation and foresight.

1. Just like pig farmers, we need to understand that things don’t always stay the same and that we need to be prepared for tough times. That’s why it’s a good idea to save some money when you have a lot of it coming in. This way, you’ll have some money to fall back on when times get tough.

  • It’s a good idea to get into a habit of saving when income is plentiful.

  • This way, you’ll have an emergency fund when times get tough.

2. Pig farmers keep an eye on market trends and adjust their strategies accordingly. Similarly, we should stay vigilant about what’s happening in the economy and make changes to our financial plans to reduce risks.

  • One way to do this is to spread your money around into different investments so that if one investment goes you won’t lose everything.

3. Pig farmers take steps to prevent their livestock from getting sick or injured. We can do the same thing by getting insurance and taking other steps to protect our finances. This way, if something unexpected happens, we’ll be better prepared to deal with it.

As you can see, by being smart with our money and taking steps to prepare for the unexpected, we can build a better financial future for ourselves.

Advice in Action

Pat Roche, Pig Farmer, Carlow

Being in a volatile sector, I need to know all my costs – and review them regularly. At the start of each month, I know what my income and expenditure will be for the next thirty days. If I didn’t have access to this information, it would be a major problem for me.

If there are any signs of difficulty arising, act fast. You should never let a creditor ring you. Instead, be proactive and look for credit in advance - make an arrangement that will keep both parties happy. Having the confidence of your suppliers is essential – especially if you hit a bump in the road – and being honest and forthright with them is the cornerstone of a trusting relationship.

With changes in interest or the cost of feed, things can change quickly, so I would always make sure to take variables into account – this is also where your emergency fund mentioned above can come into play!

My key advice is to expand very carefully – and never ever waste money. Even in bad times, I always invest in maintenance and repairs, as I believe it’s a false economy to let things run down.

Pretty much everybody in pig farming lost money last year, but I had already arranged for credit and financing. It is better to have it and not need it than to need it and not have it. And just because you have finance in place, that’s not a licence to spend money without thinking about it. Having a strong cashflow management strategy in place will help you survive anything, even an unheard of 28-cent drop in price over 10 weeks!

This article was first published in our 2024 Irish Farm Report.