Cash-Flow Challenges in Agriculture: Proactive Steps for Farmers and Land Managers

As combines roll across the UK, the agricultural sector is beginning to see the impact of the dry spring and early summer on grain yields. At the same time, UK wheat futures are falling due to global pressures and high stocks carried forward from the 2024 harvest. These factors, combined with high input costs, increasing interest payments, and uncertainty around support payments, are creating significant cash-flow pressures for many farmers and land managers across the UK.

Our rural team is urging farmers not to shy away from these looming cash-flow pressures and pinch-points. Instead, they recommend taking proactive steps to manage these challenges effectively.

Rural specialist and Head of Outsourcing, Fiona Hawkins, emphasises the importance of seeking assistance with cashflow forecasting and scenario planning and commented: "While it may be tempting to avoid the cost of such services, sitting down with someone who understands the finances of the business can be an invaluable investment. This approach allows for early action to prevent problems from escalating." 

Key benefits of proactive cashflow management include:

• Identifying periods of potential negative cashflow so action can be taken in advance, such as arranging overdrafts or deferring non-essential spending.
• Supporting smart timing for crop sales, input purchases, and capital investments to optimise financial outcomes.
• Demonstrating strong management to lenders, potentially unlocking funds that might otherwise not be available.
• Highlighting risks so contingency plans can be prepared in advance.

Our outsourcing team uses advanced software solutions to combine business planning with cash flow forecasting. By leveraging trends from the latest financials, existing budgets, and expected results, they can create micro-forecasts to plan for the financial impact of new initiatives or cost-cutting measures.

Taking these proactive steps can help farmers and land managers navigate the financial challenges and ensure the long-term sustainability of their operations.

Our rural team remains in continued support of our farming and rural clients in navigating these ongoing challenges. If you’d like to discuss how the above effects your organisation, please get in touch with a member of our specialist Outsourcing team here.