Credit union lending to farmers hit record levels in the first half of 2024, as it increased by a third compared with the same period last year.
Cultivate, an initiative of a group of credit unions across 175 locations in the Republic that provides short to medium-term loans built specifically for the needs of its farming members, publishes its latest lending review on Tuesday.
It shows that in the first half of 2024, there was a record €32.5 million in farming loan demand compared with €24.4 million for the same period in 2023 and €14.2 million for the same period in 2022.
The average loan application for January-June was €38,059 to a farmer over 6.2 years who owned a farm of about 35 hectares and had €152,388 debt on it. That represented an increase of about 20 per cent.
Dairy farmers played a crucial role in this growth, with loan values up 63 per cent on 2023 and 202 per cent on 2022. The average loan applied for by dairy farmers reached €45,568, compared to €35,840 for beef farmers.
Applications from beef farmers, the largest group of loan applicants, rose by 15 per cent in 2024 compared to the previous year, and by 102 per cent compared to 2022.
The period was marked by both dairy farmers and beef farmers applying for stocking and working capital loans, although these loans accounted for 36 per cent of dairy applications while they were 27 per cent of beef applications.
How will the Apple tax ruling affect Ireland’s relationship with other multinationals?
Dairy farmers were also bigger landowners, owning on average 47 hectares of land in comparison to 31 hectares owned on average by beef farmers. About half of dairy farmers had off-farm income as compared with 88 per cent of beef farmers.
Farmers are not only borrowing more, but they are also opting for longer repayment terms, with the average loan term extending to 74 months in 2024, up nearly 13 per cent from the previous year.
Cultivate said the trend highlights the changing needs of farmers, who are “increasingly focusing on long-term planning and cash flow management amid various farming challenges such as weather and input costs”.
Cultivate chairman Joe Healy said: “This record growth in loan applications shows that farmers are investing in their future, whether it’s for working capital, infrastructure, or new equipment.”
Irish League of Credit Unions chief executive David Malone said: “Behind these impressive numbers are individual stories of dairy, beef, tillage and other farmers with different and diverse needs who rely on the support of their local credit union.”
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
