Ifac Predicts 42cpl Milk Production Costs for 2025 as Milk Prices Fall

Early action on cash flow forecasting and banking relationships recommended, as base milk prices likely to fall below average cost of production

Our analysis indicates 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 amid ongoing market pressures, dairy farmers are being advised to prepare for the possibility that base prices could fall below production costs in 2026.

"The time for financial planning is now, not when cash flow problems have already emerged," urges Philip O’Connor, our Head of Farm Support. "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."

Early banking conversations critical

Noreen Lacey, our Head of Banking, 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," Lacey advises. "Farmers anticipating cash flow pressure or difficulty meeting repayments should contact their bank managers now to discuss options before problems escalate."

We recommend 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," adds Lacey.

Expert support available

Our 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.

Talk to Philip O'Connor

Head of Farm Support052 7441772 farmsupport@ifac.ie Linkedin