Farmer Focus: Late payments mean cashflow issues

With the new year starting we find ourselves facing uncertainly about the future. I mentioned this earlier this year.

As we mentioned last time, the sheep are in a position where at £54 a lamb cost of production we can simply baton down the hatches and try to survive until things shake themselves out.

Of slightly bigger concern is the arable operation. As anyone who has read our columns knows we have significant borrowings on machinery but having seen this coming we have managed to keep machinery costs incredibly sensible and affordable – unfortunately no Fendt’s or new paint smell in the yard just yet.

As 99% tenants our options to diversify into different income streams are extremely limited but we have managed to put in significant amounts of environmental schemes on various blocks of land.

See also: 9 tips for minimising lamb production costs

However, because of late or non-existent payments on these schemes we will certainly be hesitant on deciding whether to enter into any more. 

Speaking of late payments, at time of writing Basic Payment Scheme (BPS) has still not showed up which has stuffed up cashflow.

Once again, massive thanks to Paul Eagleton at HSBC for riding to the rescue with a very large overdraft extension. It has certainly meant we can spend our Christmas worrying about the children and farming rather than the bank.

I am sure people are in a similar position to us. Please don’t stress – talk to your bank.

Most understand late BPS payments and will accommodate as best they can.

We’ve had some busy weeks with the sheep. In the end we managed to drag 500 ewe lambs to above 38Kg and have thrown in the tups to breed them. 

We have split the ewes into two mobs of 1,100 and should be lambing at the start of April.

We are going to have 600 join the ewe lambs and lamb in late April.  The idea is, with the labour shortage, to split into two mobs of about 1,000 Jo and myself should be able to cope with lambing without any additional lambing labour.


See Rob and Jo Hodgkins’ biography