Haydock Finance: Milking

Milking the opportunity

Cattle finance that is both seen and herd

Jon Hercman Head of Agriculture Haydock Finance

The UK dairy industry plays a vital role in feeding the nation and accounted for 16.4% of last year’s total agricultural output. It is also a sector that is no stranger to challenges, some of which have arisen from shifts in demand and price fluctuations.

We launched our agriculture division in September 2020 with the aim of providing financial solutions tailored to the requirements of farmers and identifying new opportunities to better support them. Over the last 12 months this sales channel has grown and significantly strengthened its position in the broker introduced agriculture finance market.

With approximately 8,000 dairy farmers in the UK, we wanted to develop a solution that would support them through the market challenges. Acknowledging that a dairy farmer’s most valuable asset is often their herd, our new product enables farmers to increase their herd size through new purchases as well as leverage against their existing herd to invest in the business and to drive higher returns.

It is the ability to refinance a farmer’s existing herd that makes our product truly unique. It has been developed to recognise the characteristics of cattle and their financial value which allows us to release cash to farmers for any business purpose, not just the purchase of more cattle. Furthermore, our product is available to owner occupiers and tenant farmers alike. We rolled out our new product offering to over 50 broker partners via an online webinar in October 2021 where I was joined by our CEO John Jenkins, sales director Andy Taylor, and our senior agriculture underwriter, Vanessa Burger.

Under refinance we will release up to 75% of the value of a herd. Our minimum facility size is £15,000 with a maximum facility size of £500,000. This means that we can support both small and large farmers. To date we have seen a wide range of proposals for the refinance of dairy cattle and have paid out a good number of deals. The feedback we have received from brokers has been great.

Since launching this new product, we were thrilled to work with our broker partner Allan James Financial Services and assist their client with the refinance of 90 dairy cows. The deal raised £95,000 which enabled the family run business to proceed with their expansion plans and purchase additional cows.

“Our new product enables farmers to increase their herd size through new purchases as well as leverage against their existing herd to invest in the business and to drive higher returns

In addition to funding dairy cattle, Haydock funds a wide range of other business assets commonly found on farms. Recent assets funded include the refinance of a 2015 combine harvester to a tenanted farm business who wished to invest in other areas of the business. We also supported the refinance (sale and HP back) of a flower scanning, cutting, and bunching production line to one of the largest cut flower producers in the UK which supplies many major retailers. The capital raised was used to support the expansion of the business which has seen an increase in demand from retailers for domestic flower supply resulting from COVID and Brexit.

Going forward we will continue to develop new products and grow our proposition in the sector. Dairy cattle finance is the first significant step in this journey.