Supplying milk after 2015

Enderol

Hi guys, does anybody know what kind of system is gonna come into their coop after quotas go. Im assuming i cant just call up one coop if they're offering a slightly better price and go "i'll supply you this year!".

I heard off someone that after 2015 in order to supply milk you have to buy shares relative to how much you will supply. Now maybe this is a load of sh*t, I'm not sure. It half makes sense as then it's the more active guys who get a say where the coop is going.

Markcheese

Dunno what's coming in here, but when I worked in NZ the farmer had to buy processing capacity from the processor(he had x thousand kg) ...kind of like buying quota but u could buy as much as u liked... not sure was it based on annual production or peak production (ie winter milk would have had cheaper or free processing quota)

Enderol

Now that would make sense.

I keep hearing people say we'll produce as much as we want but the coop and processors still have to plan ahead, they have to forcast how much milk they'll have rather than taking it in any amount at all. By doing this they plan how much people will be paid.

It makes sense that quota won't just go, it'll get replaced with agreements that you'll supply X amount for this year, and that if you went over it you might get a slightly lower price depending on supply at that time.

I just want to see if anyone actually knows whats going to happen.

I'm kinda surprised this hasn't got more replies by now, usually answers fly in for stuff on this forum.

Do people really not know what their coop is planning after 2015?

Timmaay

Enderol wrote: »

Do people really not know what their coop is planning after 2015?

You hit the nail on the head here, we really don't know!! Lots of talk about processing rights, new processing plant, June peak penalties, and then active farmers only owning shares in the coops etc etc, but there is no clear picture yet as to what will happen, which is certainly not good for any farmer trying to plan ahead! Any dairy calves born from next year on will start producing milk in a quote free europe, so us farmers need to be planning now for AI etc now, but simple as is we just don't know what post quote holds for us yet!

Tipp Man

Well it seems the largest processor in the country hasn't a clue what its doing so farmers can't possibly know what will happen

I think Dairygold and Kerry have both said they will handle 20-30% extra milk - but I have yet to hear how producers will supply it

Possible Dairygold/Glanbia Coop merger??

5live

Tipp Man wrote: »

Well it seems the largest processor in the country hasn't a clue what its doing so farmers can't possibly know what will happen

I think Dairygold and Kerry have both said they will handle 20-30% extra milk - but I have yet to hear how producers will supply it

Possible Dairygold/Glanbia Coop merger??

I think Dairygold and Glanbia are talking about going in 50:50 on a new plant located centrally probably with some other processors getting smaller access depending on their input. That would make sense to me anyway.

Kerry have processing capacity for an increase of 25% since the Newmarket purchase which will put added pressure on Dairygold as it was a big supplier to Newmarket.

It takes 3 years to go from decision to processing starting iirc so they would want to be knocking heads together and getting a plan going before midsummer or we may be spreading milk in 3 years time with our vaccum tankers again:mad:

Enderol

If the coops don't reveal soon what the plan is, they are going to make it a bit more harder to let farmers plan ahead with what they want to do. They've been sending out those questionnaires to everyone to ask what they are planning after 2015. It might be time to send a questionnaire back to the coops and ask them to complete and return before July 1st!

A lot of guys could be doing their figures based on the price they are getting now for milk but coops got to be a bit more up front with what they will be paying or even here we should be figuring out what the c/l will be after 2015. This price will drop definitely but by how much? I think the coops worst affected will be those who only process the milk into one or two outlets, maybe liquid milk and butter. The coops who could cushion this drop the best may be those who deal with more high value products like whey protein or sports nutrition products, after this then coops with more commodity products (whole or skim milk powder) might be caught somewhere in the middle.

The food harvest 2020 document said we would increase our output by 50% (I might be remembering that incorrect) but if that goes up our price comes down.

Anybody any scenarios on what we could expect?

Markcheese wrote: »

when I worked in NZ the farmer had to buy processing capacity from the processor(he had x thousand kg) ...kind of like buying quota but u could buy as much as u liked... not sure was it based on annual production or peak production (ie winter milk would have had cheaper or free processing quota)

Markcheese I think this is a good example of what coops would do. Takes advantage on the A+B-C payment system. Convert everyone's quota to processing rights without charging them, then if they want more or new entrants are coming in then they charge for processing rights. All the coops will have their own caps on how much they will accept.

They would probably apply the contract for milk supply to the whole year rather than peak production time. Then again thinking about it peak production time could work. Pay farmer X, so much c/l then if he supplies more than he should, pay him less c/l (that would be you peak production penalty kicking in there).

Markcheese

Again it's years since I worked there but the farmer was charged per litre for collection and paid by the kg (for milk solids) . Also he got his weekly or monthly milk cheque but most of his profit didn't arrive till the end of the year ... A dividend based on co-op profit ... Paid by kg supplied... Co-op didn't pay out till product was sold and paid for.... Farmers very keen on having lean efficent processor