The Kingston story: Bidders fail to pay up for auctioned cows

Water John

It is a reality that will be faced by more and at different levels.
It is mainly looking at the options and the morality of default.

JJ there's always the Unfollow button.

fepper

Sam Kade wrote: »

Did I say they weren't?

Well you did say the media don't know about these upcoming farms in trouble yet the independent paper (media) reported in its paper, they know everything that's going on now!

WheatenBriar

This was covered on 5-7 live again
5 more farms in the munster region are next

A Rep from the ICSA was on also,saying many debts on drystock farms were in trouble too
Average Loan sizes of 100 to 400k were involved he said
Higher on dairy farms

Milked out

WheatenBriar wrote: »

This was covered on 5-7 live again
5 more farms in the munster region are next

A Rep from the ICSA was on also,saying many debts on drystock farms were in trouble too
Average Loan sizes of 100 to 400k were involved he said
Higher on dairy farms

All acc/rabbo?

rangler1

WheatenBriar wrote: »

This was covered on 5-7 live again
5 more farms in the munster region are next

A Rep from the ICSA was on also,saying many debts on drystock farms were in trouble too
Average Loan sizes of 100 to 400k were involved he said
Higher on dairy farms

I imagine that they have to make an example of kingstons case and win it at any cost. It doesn't make economical sense if it's not to put the wind up the other defaulters

MIKEKC

WheatenBriar wrote: »

This was covered on 5-7 live again
5 more farms in the munster region are next

A Rep from the ICSA was on also,saying many debts on drystock farms were in trouble too
Average Loan sizes of 100 to 400k were involved he said
Higher on dairy farms

How could a dry stock farm carry that level of debt. Profitability on dry stock farms hasen' changed that much in recent years, so how could anyone get into that level of debt?

Sam Kade

fepper wrote: »

Well you did say the media don't know about these upcoming farms in trouble yet the independent paper (media) reported in its paper, they know everything that's going on now!

I said they didn't know who they were.

WheatenBriar

Milked out wrote: »

All acc/rabbo?

They did't say but thats what I assumed

MIKEKC wrote: »

How could a dry stock farm carry that level of debt. Profitability on dry stock farms hasen' changed that much in recent years, so how could anyone get into that level of debt?

Build à few sheds buy some land,carrying forward losses,its easy enough done

MIKEKC

WheatenBriar wrote: »

They did't say but thats what I assumed


Build à few sheds buy some land,carrying forward losses,its easy enough done

What about doing the sums first?

Nekarsulm

WheatenBriar wrote: »

They did't say but thats what I assumed


Build à few sheds buy some land,carrying forward losses,its easy enough done

Borrow for a few "buy to let's", perhaps a commercial warehouse, back 7 or 8 years ago, you wouldn't be long ending in a hole to the tune of 400,000.

bogman_bass

MIKEKC wrote: »

How could a dry stock farm carry that level of debt. Profitability on dry stock farms hasen' changed that much in recent years, so how could anyone get into that level of debt?

build a 6 bay slatted shed and you are getting close to that money

Bass Reeves

MIKEKC wrote: »

How could a dry stock farm carry that level of debt. Profitability on dry stock farms hasen' changed that much in recent years, so how could anyone get into that level of debt?

I pointed out in another thread that the large finishers have increased stock amounts. There are a good few that kill in excess of 500/year. A finisher killing a double of cattle/week (28-30 cattle) would be carrying over 330 cattle if average animal was 85 days in the feedlot. Most carry at least 50% of the cost of these cattle as debt and some carry it up to 80%. Say the average animal costs 1100 euro with mart fees then at 65% debt ratio on 330 animals is 235K, add to that maybe machinery borrowings at 30-50K, debts for feed whether it is miller credit or borrowing for straights or beet or maize silage another 30-50K. Borrowings for sheds 100K. It would be easy to hit 300K+.

Even if debt is lower the thing about drystock farm borrowing is that it may be unstructured. It may be in the form of overdraft, leasing and HP on machinery and a general loans faculity costing 6-9% in interest.

MIKEKC

bogman_bass wrote: »

build a 6 bay slatted shed and you are getting close to that money

Nobody taking up my point that the sums should be done before any investment

Nekarsulm

MIKEKC wrote: »

Nobody taking up my point that the sums should be done before any investment

Sums that worked in 08 don't work now.

Water John

Some took the encouragement widely handed out to 'leverage' on the land value tied up.
Some invested in a well known scheme with farm organisation links.

Heard one tech engineering guy with a far out idea, saying his core investors were Irish farmers. They have ponied up for a number of rounds of funding.

Not just farm investments or a few buy to let and the above most likely for drystock guys.

But the large dairy herds are first for the sheriff.

freedominacup

MIKEKC wrote: »

How could a dry stock farm carry that level of debt. Profitability on dry stock farms hasen' changed that much in recent years, so how could anyone get into that level of debt?

The smallest finisher in my area would be borrowing 100k min every year. 500 would not be regarded as big finisher around here at this stage.

Bullocks

MIKEKC wrote: »

Nobody taking up my point that the sums should be done before any investment

There's plenty people that wouldn't let sums stop them from doing whats in their head . Sometimes it works and sometimes it doesn't though

handlemaster

Nekarsulm wrote: »

Sums that worked in 08 don't work now.

If your investing you look at what your investing in if the current situation changes who this will affect your capacity to repay YOUR debt

flutered

MIKEKC wrote: »

Nobody taking up my point that the sums should be done before any investment

land coveting folk dont do math

Bass Reeves

flutered wrote: »

land coveting folk dont do math

If you did you would never buy land:o

Farmer Ed

freedominacup wrote: »

The smallest finisher in my area would be borrowing 100k min every year. 500 would not be regarded as big finisher around here at this stage.

Im sorry to have to say this as a dairy farmer. But there seems to be a bit of an assumption that dairy farmers are the only ones turning money obviously not true. But for some reason a widely held belief amount some dairy farmers. Can't really explain why?

mf240

A lot to be said for tipping along slowly and making do with poorer facilities and expanding slowly and off a solid foundation.

The profit just isn't in farming to carry huge debt.

Bass Reeves

The one advantage that finishers( these are the drystock farmers with high levels of debt) have over dairy farmers is that there stock have a high cashable value unless you have a crisis like BSE. It is only when a drystock farmers borrows more than his stock value that his farm is at risk. Worst comes to the worst he cashes in his chips and tale a PAYE job.

Even in my example earlier the farmer with 330 cattle if he finishes them and is not replacing them he may be able to rise 500K in a short space of time. It is unlikly that the drystock farmer will have large land borrowings as well. He may also have a substandical SFP as well.

Water John

Mf, its why a guy often without a lot ends working very long hours. Its using own labour instead of capital. Has to be done if capital isn't available or too dear.
Then you'll be told you lacked ambition.

WheatenBriar

Aye,,Its not unusual for large finishers to have overdrafts up to and over 100k

J.O. Farmer

patsy_mccabe wrote: »

From that Indo article;
'...there were no working cattle crush on the farm'
1,000 prize winning pedigree cows and no crush. Serious bullsh1tting going on. I have 3 crushes and only a few suckler cows.

Be nice. The sheriff probably isn't from a farming background and didn't realise that the crush doesn't actually squeeze the animal in a crushing fashion.

last time I checked the crush there wasn't much working parts anyway only the headgate.

Sam Kade

flutered wrote: »

land coveting folk dont do math

Maths

54and56

mf240 wrote: »

A lot to be said for tipping along slowly and making do with poorer facilities and expanding slowly and off a solid foundation.

The profit just isn't in farming to carry huge debt.

^^^ This 100%. Why should farmers who roll the dice and get all the upside profit if it works out have no downside if it doesn't whilst others like mf240 understand basic finance and work hard to grow their business in a financially sustainable manner?

Have those advocating that farmers shouldn't have to pay the piper when the inevitable result of their poor/greedy/careless decision making catches up with them ever heard of Moral Hazard? If financial institutions can't have recourse to the collateral pledged against borrowings when loans become non performing the effect on other farmers with well thought through plans looking for finance will be that banks won't even lend to them. Why should they?

It's all very emotional labelling what the banks and the sheriff are doing as "Colonial" and all that sort of emotional language but it's just hot air and irrelevant. If you pledge assets as collateral against a loan and you are unable to repay the loan according to the terms of the loan agreement you don't have a leg to stand on and shouldn't expect the rule of law to be changed to suit you. It's a personal tragedy for the family but the only people to blame for that are the signatories to the loan agreement and they need to take responsibility like adults instead of hiding behind rent a mob and land league whingers etc.

MIKEKC

Nekarsulm wrote: »

Sums that worked in 08 don't work now.

There wouldn't be much difference in drystock profitability between 08 and now

Bullocks

This has me thinking of the AIB ad "backing brave " . I wonder will they still run it with the dairy farmer on it !