Why cash flow can still feel tight in a good farming year – and what to do about it by Trevor Day, Partner at Burgis & Bullock

It is a common frustration in farming: the year looks strong on paper, yields are good, prices have held, but the bank balance still feels under pressure. A good year does not always mean strong cashflow, and that gap can be difficult to manage.

The key thing we see time and again with farming businesses is that profit does not equal cash. A strong set of accounts can still mask very real pressure on day-to-day liquidity if the underlying cash flow is not actively managed. The reality is that profitability and cash flow are not the same thing, and agriculture has a particular way of exposing that gap.

Costs go out steadily and often well in advance, while income tends to arrive in larger, less frequent amounts. Even in a profitable year, that mismatch can leave businesses stretched for long periods. At the same time, higher output usually entails higher input spending, meaning more cash is tied up before any return is seen.

Reinvestment is another pressure point. Strong years often lead to machinery upgrades or farm improvements. These are sensible long-term decisions, but they absorb cash quickly. Add in loan repayments, rising interest costs and the value tied up in unsold stock, and it is easy to see how cash can feel tight despite a good performance.

Tax can then compound the issue. A stronger year brings a larger liability, and without planning, that can create a further squeeze when payments fall due.

The answer is not to scale back successful years, but to manage them more closely. Having clear visibility over cashflow is key. Understanding when money will come in and go out allows better decisions around spending, investment and sales. Small changes in timing, whether that is when inputs are purchased or crops are sold, can make a noticeable difference.

This is where Burgis & Bullock can add real value. We work closely with farming businesses to build practical cashflow forecasts, helping you see pinch points before they happen. We support discussions with lenders, review funding structures, and ensure tax is planned for in advance rather than becoming a surprise. We also help you challenge investment decisions and stock strategies, so they support both long-term growth and short-term stability.

The key point is simple: a good year does not remove cash pressure; it just changes it. With the right insight and planning, you can stay in control of cash, not just profit, and make more confident decisions for the future.

For further advice, please speak to Trevor Day or a member of our specialist farming experts www.burgisbullock.com/services/farming-agriculture/

Trevor Day, Partner at Burgis & Bullock