dairygold contracts

sthil

hi im looking for opions on the contracts dairygold want farmers to sign , i think their need for 63.5 % more prosessing is a bit over the top . its based on one survey that was carried out last year. if the survey was carried out after this year i recon figure would be halved

grace2312

tis 2cpl is a bit much if contracts not signed by next year

pms7

Lot of people at meetings saying they wont sign contract. Not happy giving the money either!
I think Dairygold need contracts to plan, remember there is no cap on supply, unlike Kerrys 120% of current quota. I reckon increase on contracts will be more like 10-20% not 63%. I know people who put down crazy figures, "Put down enough anyway"! I'm in Cork, don't know of anyone who is expanding more that 10%. Land is the big issue.

Farmer Ed

Has anyone any views on the way large organizations can try and control the press. I am a farmer supplying milk to Dairygold. As a lot of you might know by now Dairygold wants all it's members to sign a contract that will force us to sell all our milk to Dairygold up untill 2020. Also they want farmers to buy more shares and pay money in to a revolving fund. Most farmers I know have problems signing this contract and a few weeks ago farmers held a meeting in Mallow with a solicitor in order for them to hear independent legal advise. However on the night Dairygold management and board members came to the meeting with their own legal team from Dublin and also with a team of PR consultant's also from Dublin. They did their best to hijack the meeting but the vast majority of the 1080 farmers didn't want to hear what they had to say. A show of hands reveled that 90% of farmers at that meeting have a problem with this contract and the independent legal advice was not to sign it!
Two days later The Irish examiner published a report on what exactly happend at the meeting and as a result Dairygold has stopped advertising in the Irish Examiner. Up until that point Dairygold were advertising at least two times a week in the Examiner. I think it is made worse by the fact that Dairygold is owned buy the farmers who's views the Irish Examiner was willing to publish. However the board of Dairygold is not elected by the ordinary farmer but rather by a system of committee's very similar to the way the president of China is elected. I don't know exatly if Irish law can deal with this kind of bullying. But surely this is an attack on the freedom of the press and our right to freedom of speech.

Injuryprone

Are you suggesting that a couple of ads would make or break the Irish Examiner?

Have you a link or any proof of this accusation?

Farmer Ed

If say a company spends €1000 week over 52 weeks in the year = €52000.
All I said was Dairygold have not had any advertising in the Irish Examiner since the Examiner reported on the Mallow meeting. This is a fact!
Now while I'm at it do you want me to prove that the light really goes of in the fridge when I close the door?
Obviously I do have my sources!

Sam Kade

What's the story with new entrants without quota starting milking in 2015, do they need to sign contracts?

Farmer Ed

Sam Kade wrote: »

What's the story with new entrants without quota starting milking in 2015, do they need to sign contracts?

7. What are my obligations and liabilities as a shareholder?

Under company law, your obligations and liabilities are minimal. If you own shares which are not yet paid for, or only partially paid, you may be required to pay the balance at some specified date or if the company goes into liquidation.
Of course, you may have significant obligations and liabilities if you have entered into a shareholders' agreement or some other contract. For example, if you have personally guaranteed the company's debts.


Does this anwser your question? If you sign that contract you are agreeing to supply that amount of milk to Dairygold, for what ever price they or their successors should decide. My advice if your a new supplier is to try and get another Co-OP to take your milk. Other than that I'd be very slow about signing anything! Trust me you don't want to be a busy slave for the rest of you life!

JohnBoy

I think there's 2 big problems here.

1) despite having a huge number of farmers on their various boards and committees dairygold seem to have made a complete arse of this whole process. Did they not listen to these boards/committees or are the boards/committees completely out of touch?


2) Some farmers seem to have forgotten that they not only supply the co-ops but they also own them, their fathers, grandfathers or great grandfathers pooled their hard earned cash together to setup these co-ops, and from time to time businesses need investment to grow. There's 2 options in that situation. The shareholders invest in the business, or you bring in outside shareholders.


The problem with bringing in outside shareholders is you become a PLC which operates under a very different set of criteria. I'd dearly hope that dairygold will stay a co-op but I dont know how they can sort this mess out without going back to the drawing board.

Farmer Ed

JohnBoy wrote: »

I think there's 2 big problems here.

1) despite having a huge number of farmers on their various boards and committees dairygold seem to have made a complete arse of this whole process. Did they not listen to these boards/committees or are the boards/committees completely out of touch?


2) Some farmers seem to have forgotten that they not only supply the co-ops but they also own them, their fathers, grandfathers or great grandfathers pooled their hard earned cash together to setup these co-ops, and from time to time businesses need investment to grow. There's 2 options in that situation. The shareholders invest in the business, or you bring in outside shareholders.


The problem with bringing in outside shareholders is you become a PLC which operates under a very different set of criteria. I'd dearly hope that dairygold will stay a co-op but I dont know how they can sort this mess out without going back to the drawing board.

Couldn't agree with you more John about Dairygold needing to go back to the drawing board to sort out this mess. All of the meetings I've been at could have left the board in no doubt, that what the vast majority of farmers want.

If anything is to be learnt from this. It is how out of touch the board and managment of Dairygold are with the grass roots. Lets face it the system that decides who is on the board of Dairygold is almost identical to the system that selects the president of China. (I'm not joking about that!) If the board was really accountable to farmers, they surely would have gone about their business in a different way.

Also their figures are not adding up! The plan for Mallow is for one, or if needed, two, 7.5 tonne per hour dryers. ie. A 15 tonne per hour plant. below is a bit I coppied and pasted from the web, showing the price of a 15 tonne per hour dryer. Also remember that GEA make the dryers in europe and there should be an extra shipping cost to New Zealand. Also the New Zealand project is on a greenfield site . Dairygolds project is on a brownfeild site. ie. Gas ,ESB, waste system and milk intake already in place in the Mallow yard. I think a few more questions need to be asked of Dairygold regarding how exactly they are planning to spend the €120m to €180m on a smaller project? Or do they need money for some other reason ?!?!?!

GEA Process Engineering wins € 40 million order in New Zealand

GEA Process Engineering has been awarded a €40 million project to build a 15 t/hr whole milk powder plant for Fonterra in New Zealand. The project, known as the Darfield project, is due to be commissioned in August 2012 and will be undertaken by GEA Process Engineering New Zealand.


The Darfield project is the largest project ever undertaken by GEA Process Engineering New Zealand. The project will be similar in capacity to three plants previously built by GEA for Fonterra.
The scope for the Darfield project, which utilizes only GEA technology, covers milk reception, standardisation, evaporation, drying, powder transport and packing. In addition, the order includes the construction of the building that will house the plant. The plant is the sixth greenfield plant that GEA Process Engineering has supplied in New Zealand over the past four years.

funny man

Board men think they control the co-op.
Management know they control the co-op.

30 years of observation!

Farmer Ed

Maybe it's time for an EGM and maybe farmers might even take back control of the Co-Op? After all in theory we own it! But you are right.
Did you know that the Dairygold management/ workers pension fund is worth over €200m. That's more than the value of the Co-Op! The avarage wage bill per worker is over €50000 and you can be sure the poor man in the store handing out the bags is not on that kind of cash. So we can only guess what the 200 odd managers are being paid? And for the last two mounths they seem to be doing nothing else but trying to sell us this contract. But I guess it's ok if poor fools out the middle of the night pulling calves, milking and feeding cows are willing to keep paying and not rock the boat. After all we were always easy to control if you got the right PR advise.
I would love to know how much they have spent on PR trying to sell this contract to us?
Dose anyone know how much Keating and associates cost? I'd say they'd be a bit more than the minimum wage Pat came all the way down to the Mallow meeting himself from Dublin, with his assistant. Way above the call of duty I would say.

Injuryprone

Sam Kade wrote: »

What's the story with new entrants without quota starting milking in 2015, do they need to sign contracts?

I'd imagine that seeing as they're wanting to know how much each supplier plans on supplying in 2015 at the moment, that new entrants who plan on beginning supply in 2015 would have to make themselves known now even, and signup the same way. Although there might be some allowance made. It doesn't make sense that there'd be a 2-year lead-in time for all new entrants going forward. It wasn't addressed in the booklet that I have as it was done out for current suppliers.
You'll also have to acquire a minimum shareholding (I don't think its been announced yet) before you start supplying and then your cheque will be deducted by 0.5cpl until you get your shareholding up to 4cpl.

funny man

An EGM would be a good start (the last thing that would need especially at this time of year) but would need to have clear concise goal as to what ye want to achieve. pension funds are one thing, amount of people on defined benifit pensions is another. i have been here many moons ago fighting a similar fight only to be stabbed in the back by fellow suppliers. who were scared by member relations over test results. never under estimate the power and abuse of it these guys will employ.

the only advice i can give you is identify who in the co-op is calling the shots on contracts, and come up with your (suppliers) own set of demands. not as easy as it seems.

Injuryprone

can someone explain what staff pension funds have got to do with milk supply contracts?

Farmer Ed

Injuryprone wrote: »

can someone explain what staff pension funds have got to do with milk supply contracts?

It's just one example of how the cows are not the only ones being milked, if the pension fund is worth more than the Co-Op. How many farmers owners have a pension fund worth €200000 per man?

Farmer Ed

funny man wrote: »

An EGM would be a good start (the last thing that would need especially at this time of year) but would need to have clear concise goal as to what ye want to achieve. pension funds are one thing, amount of people on defined benifit pensions is another. i have been here many moons ago fighting a similar fight only to be stabbed in the back by fellow suppliers. who were scared by member relations over test results. never under estimate the power and abuse of it these guys will employ.

the only advice i can give you is identify who in the co-op is calling the shots on contracts, and come up with your (suppliers) own set of demands. not as easy as it seems.

I agree it's a bad time of year and I've been told that some people are hoping that the calving of cows will stop farmers asking questions. But what choice is there if they won't listen?

I also agree I have spoken to farmers who are afraid to speek their mind because of test results! What a sad reflection is that?
How long ago since we were promised independent Milk testing? Remember when they hired someone to follow the person carrying out the independent milk audit?
Ah but fair play Injuryprone isn't a Co-Op all about trust after all! Sure their all lovely people I'm sure Did Santa come ? What did he bring?

Farmer Ed

Injuryprone wrote: »

I'd imagine that seeing as they're wanting to know how much each supplier plans on supplying in 2015 at the moment, that new entrants who plan on beginning supply in 2015 would have to make themselves known now even, and signup the same way. Although there might be some allowance made. It doesn't make sense that there'd be a 2-year lead-in time for all new entrants going forward. It wasn't addressed in the booklet that I have as it was done out for current suppliers.
You'll also have to acquire a minimum shareholding (I don't think its been announced yet) before you start supplying and then your cheque will be deducted by 0.5cpl until you get your shareholding up to 4cpl.

And don't worry cos Bertie O'Leary told the farm Exam a few weeks ago that "if you are a young lad and can't come up with the money for shares. Then they will be willing to take it out of your single farm payment" Not sure if that also applies to older people or women? But it was clearly a well though out statment

Farmer Ed

pms7 wrote: »

Lot of people at meetings saying they wont sign contract. Not happy giving the money either!
I think Dairygold need contracts to plan, remember there is no cap on supply, unlike Kerrys 120% of current quota. I reckon increase on contracts will be more like 10-20% not 63%. I know people who put down crazy figures, "Put down enough anyway"! I'm in Cork, don't know of anyone who is expanding more that 10%. Land is the big issue.

Not really a cap on Kerry supply either. You can buy as much quota as you want in Kerry between now and 2015 for less than you would pay for shares in Dairygold. And you can supply 120% of that Quota. Not like in Dairygold where people who invested in quota and the processing rights that went with it are now being asked to fork out for shares again!

funny man

Farmer Ed wrote: »

I agree it's a bad time of year and I've been told that some people are hoping that the calving of cows will stop farmers asking questions. But what choice is there if they won't listen?

I also agree I have spoken to farmers who are afraid to speek their mind because of test results! What a sad reflection is that?
How long ago since we were promised independent Milk testing? Remember when they hired someone to follow the person carrying out the independent milk audit?
Ah but fair play Injuryprone isn't a Co-Op all about trust after all! Sure there all lovely people I'm sure Did Santa come ? What did he bring?

They can pull the strings all right. i fought long and hard and they won. if it was again i wouldn't do it because they identified how to beat us and they did just that (alot of farmers fell out over it). i seen at a recent board election the other board members went to extreme lenghts (even blacking another candidate) to keep out a real progressive guy. then the CEO was there as a scrutineer on election night WTF:eek:.

Farmer Ed

funny man wrote: »

They can pull the strings all right. i fought long and hard and they won. if it was again i wouldn't do it because they identified how to beat us and they did just that (alot of farmers fell out over it). i seen at a recent board election the other board members went to extreme lenghts (even blacking another candidate) to keep out a real progressive guy. then the CEO was there as a scrutineer on election night WTF:eek:.

I agree with most of what you say ,just I think maybe people can get their message out a little bit better now. I am guessing the last time you were involved in a EGM you weren't able to use a fourm like this?
Sure they might win. But at least we have to try. Doing nothing wont make things any better. And losing an EGM can't make things any worse.
Were you in Mallow? Do you think the board would have won a vote there? Not a hope! I've never seen Dairygold farmers more angry and united than they are about this contract. People who I thought could never get angry are angry about this.

Injuryprone

Farmer Ed wrote: »

I agree with most of what you say ,just I think maybe people can get their message out a little bit better now. I am guessing the last time you were involved in a EGM you weren't able to use a fourm like this?
Sure they might win. But at least we have to try. Doing nothing wont make things any better. And losing an EGM can't make things any worse.
Were you in Mallow? Do you think the board would have won a vote there? Not a hope! I've never seen Dairygold farmers more angry and united than they are about this contract. People who I thought could never get angry are angry about this.

So what are your problems with the contract and how would you like to see them be addressed?

Farmer Ed

Injuryprone wrote: »

So what are your problems with the contract and how would you like to see them be addressed?

Did you not read my eariler posts?

I have a very real problem with commiting to supply milk to a company for what ever price they or their successors should decide to give me for 7 years. Already they are admiting the banks are looking for this. Can anyone guarantee me that we won't have a bank appointed administrator deciding the price of milk before the seven years are up? I have a real problem with being used as security for someone else's loan!

I have a problem with signing a contract with someone who is clearly not telling me the whole truth. ie. telling us that it will cost €120m to €170m to put two 7.5 tonne dryers in to the Mallow yard. When clearly as shown from the bit I cut and pasted from the GEA website. A 15 tonne per hour plant can be built on a greenfield site for €40m.

I have a problem with signing a contract with any company who's employees or board members use a firm of PR consultants to persuade it's owner/ shareholders to sign it. And who stoop as low as to hijack a farmers information meeting and then try and control the media. (If any of this is not true then i would like to invite them to sue me!)

I have a problem with signing a contract that forces hard pressed farmers who have borrowed money to buy quota and the processing rights that went with it. To now turn around and buy shares that are worthless and that they don't want. While at the same time help fund the processing of new milk that hasn't been properly planned and clearly very little market research has been carried out, as to what product can give the best return for this milk. ie. if they only turn this new milk in to milk powder and flog it on the world market. Then surely this will most likely reduce the overall value of the product mix and reduce the average price of all milk, if not properly planned. Also there it is a very real posssibilty that after 2012 we may not even need all this spare plant and we could be left paying for a white elephant.

I have a problem with signing a contract that is being investigated by the competition authority and I have recived legal advise that it is not wise to sign it!

I could go on but it could take all night.

The only way to address this contract is to tear it up, go back to the drawing board and next time do the home work and cut out the BS

hayfever

Dairygold should have placed a figure of 1.5 to 2 cent per litre on all expansion milk, give farmers a base production over the last three years as their right of production, they also should give some comittment on the price of milk for the term which you are signing for. The 1.5 or 2 cent should be converted into shares if required by the terms in the contract. No revloving fund as this will only affect the price of milk in the term when its to be paid back in a negative way as it will put pressure on the co-opto pay a proper price. The mess is going on far too long its time for management to carry all its members into the future not just the big boys! and the new boys the guys who have supplied the co- op for the past three generations deserve better surley.

funny man

hayfever wrote: »

Dairygold should have placed a figure of 1.5 to 2 cent per litre on all expansion milk, give farmers a base production over the last three years as their right of production, they also should give some comittment on the price of milk for the term which you are signing for. The 1.5 or 2 cent should be converted into shares if required by the terms in the contract. No revloving fund as this will only affect the price of milk in the term when its to be paid back in a negative way as it will put pressure on the co-opto pay a proper price. The mess is going on far too long its time for management to carry all its members into the future not just the big boys! and the new boys the guys who have supplied the co- op for the past three generations deserve better surley.

sorry hay but i strongly disagree, all milk benefits from the new driers and the stainless steel today that they are using would needs upgrading, so i say put it over all milk as it would be alot more than1-2cents otherwise. i don't know how they can give a commitment on milk long term. we all know we are exporting on to the world market so we get world market price or one linked to it.

funny man

Farmer Ed wrote: »

I agree with most of what you say ,just I think maybe people can get their message out a little bit better now. I am guessing the last time you were involved in a EGM you weren't able to use a fourm like this?
Sure they might win. But at least we have to try. Doing nothing wont make things any better. And losing an EGM can't make things any worse.
Were you in Mallow? Do you think the board would have won a vote there? Not a hope! I've never seen Dairygold farmers more angry and united than they are about this contract. People who I thought could never get angry are angry about this.

No i wasn't in Mallow. i have no doubt that they are angry, it's the old story of the co-op treating their suppliers as morons and expecting to get away with it. no stand up for what i say is a fairer deal but make sure ye present an alternative contract agreement with broad supplier acceptence or the co-op will divide and conqer.

I supply Lakeland dairies up in cavan and they have brought in a raft of new measures including bonus schemes which if you don't buy their meal you won't get the bonus (.2kg/litre of milk), a production penalty in may/june of 13% of supply which was stated that they were Teagasc best practice figures (which they are not). a 3 year contract with penalties for not signing while they're customers buy on 6 months contracts.

i could pull holes in it but from years of wondering i have figured it out, our co-ops have served us well over the years but all they had to do is sell product into intervention. now they have to find mrkets for products and as their customers got bigger their buying power increased they are able to squeeze these little co-ops (on a world scale) and get premium product at a price no better than plain whole/skim powder or butter.

Farmer Ed

funny man wrote: »

sorry hay but i strongly disagree, all milk benefits from the new driers and the stainless steel today that they are using would needs upgrading, so i say put it over all milk as it would be alot more than1-2cents otherwise. i don't know how they can give a commitment on milk long term. we all know we are exporting on to the world market so we get world market price or one linked to it.

Don't fully agree with that, if you do the sums. If for example Dairtgold's figures were correct (and I don't think for a minute they are). The extra €50m they need up frount from farmers is just 9cent per liter on new milk or 1.8 cent per liter over 5 years on 550m liters of new milk they are projecting.
Even at that the old milk will still have to pay back the loan. So if the new milk can't afford to pay 1.8 cent over 5 years. God help us!

freedominacup

funny man wrote: »

I supply Lakeland dairies up in cavan and they have brought in a raft of new measures including bonus schemes which if you don't buy their meal you won't get the bonus (.2kg/litre of milk), a production penalty in may/june of 13% of supply which was stated that they were Teagasc best practice figures (which they are not). a 3 year contract with penalties for not signing while they're customers buy on 6 months contracts.

AFAIK Glanbia's US suppliers work on 3 month contracts with price agreed on the day the contract is signed. This is standard in the US I believe and it allows US farmers to turn off the flow of milk as soon as milk price doesn't suit.

There was a small article in the farming indo a few weeks ago on it. At $2700/tonne for butter US farmers are happy out at $2200 they're just about making money at $1700 they start culling cows. They can do this because most US dairy farms have a replacement rate approaching 50%/year so they can take out half their cows this year after calving and have them all replaced in 12 months. My butter price figures are from memory and may not be accurate but the spread in price per tonne is reasonably accurate.

On the other hand our purchasers want us to sign contracts for period up to 20 times longer with no mention of price at all. I don't intend to sign any contract with any purchaser pre 2015 and then I would intend to only sign for 3-6 month periods after that.

These contracts are an attempt to kill before conception any attempts to put sellers groups together esp amongst younger suppliers who intend to establish larger herds. The motorway network has taken the guessing out of transport costs. If a truck can call to 2 farmers yards to fill and be back on the motorway in an hour then suppliers like this are in play for just about all processors. There are still plenty of places where trucks are travelling good distances on poor, narrow roads and stopping 10-15 times to fill for large parts of the year. This sort of scenario covers the costs incurred in travelling extra distances on motorways.

Glanbia were moving milk large distances pre motorway on a terrible network from Waterford and east Cork to Ballyragget because the economies of scale in Ballyragget covered the transport. In fact since the motorway network opend they have spent their entire time in the transport area cutting fees to the drivers beacause they figure the drivers costs have dropped dramatically.

hayfever

funny man wrote: »

sorry hay but i strongly disagree, all milk benefits from the new driers and the stainless steel today that they are using would needs upgrading, so i say put it over all milk as it would be alot more than1-2cents otherwise. i don't know how they can give a commitment on milk long term. we all know we are exporting on to the world market so we get world market price or one linked to it.

Hi funnyman, if all milk is percieved to benifit from this contract then i would have taught farmers would have snaped at the chance the sercure this contract,clearly a large amount of farmers see it as a way to cushion the costs of the expansion milk which dairygold seem to favour over the their suppliers who can not expand for numerous reasons or those who can increase volumes by very small percentages, if everyone pays for the extra capacity which they inncur on the co-op then everyone is equal as co-op ethics state. The truth is the farmers who planned to expand or start out production expected to pay alot more for the required capacity and most be delighted with this contract. Dairygold predicted 650m litres expansion by 2020 Charge 1.5cent litre x 650m x 7 years = €68.2 million.

JohnBoy

freedominacup wrote: »

AFAIK Glanbia's US suppliers work on 3 month contracts with price agreed on the day the contract is signed. This is standard in the US I believe and it allows US farmers to turn off the flow of milk as soon as milk price doesn't suit.

There was a small article in the farming indo a few weeks ago on it. At $2700/tonne for butter US farmers are happy out at $2200 they're just about making money at $1700 they start culling cows. They can do this because most US dairy farms have a replacement rate approaching 50%/year so they can take out half their cows this year after calving and have them all replaced in 12 months. My butter price figures are from memory and may not be accurate but the spread in price per tonne is reasonably accurate.

On the other hand our purchasers want us to sign contracts for period up to 20 times longer with no mention of price at all. I don't intend to sign any contract with any purchaser pre 2015 and then I would intend to only sign for 3-6 month periods after that.

These contracts are an attempt to kill before conception any attempts to put sellers groups together esp amongst younger suppliers who intend to establish larger herds. The motorway network has taken the guessing out of transport costs. If a truck can call to 2 farmers yards to fill and be back on the motorway in an hour then suppliers like this are in play for just about all processors. There are still plenty of places where trucks are travelling good distances on poor, narrow roads and stopping 10-15 times to fill for large parts of the year. This sort of scenario covers the costs incurred in travelling extra distances on motorways.

Glanbia were moving milk large distances pre motorway on a terrible network from Waterford and east Cork to Ballyragget because the economies of scale in Ballyragget covered the transport. In fact since the motorway network opend they have spent their entire time in the transport area cutting fees to the drivers beacause they figure the drivers costs have dropped dramatically.

Do you want to supply a PLC or do you want to supply a co-op?


Because co-ops are not PLCs, they are co-operatives, a group of suppliers co-operating together to supply a single entity in the interest of maximising the price paid for their product.

To be able to pay stable prices a co-op needs to be able get stable prices from it's customers. to do that it needs stable supply from it's suppliers.

What co-op is going to want to do business with these micro co-ops you're talking about on short term contracts? how will they work when no-one wants their milk?


The dairygold contract has been mishandled completely, but the situation you're talking about is madness.



I agree that the dairygold contract is too long term, but 3 months is the opposite extreme.

freedominacup

JohnBoy wrote: »

Do you want to supply a PLC or do you want to supply a co-op?

I agree that the dairygold contract is too long term, but 3 months is the opposite extreme.

I'm supplying a plc, it's dressed up differently but I'm still supplying a plc.

Glanbia are quite happy to work on 3 month contracts in the US what's sauce for the goose.........

Sam Kade

Injuryprone wrote: »

I'd imagine that seeing as they're wanting to know how much each supplier plans on supplying in 2015 at the moment, that new entrants who plan on beginning supply in 2015 would have to make themselves known now even, and signup the same way. Although there might be some allowance made. It doesn't make sense that there'd be a 2-year lead-in time for all new entrants going forward. It wasn't addressed in the booklet that I have as it was done out for current suppliers.
You'll also have to acquire a minimum shareholding (I don't think its been announced yet) before you start supplying and then your cheque will be deducted by 0.5cpl until you get your shareholding up to 4cpl.

I already have shares with Dairygold as I was milking up to 2005.

JohnBoy

freedominacup wrote: »

I'm supplying a plc, it's dressed up differently but I'm still supplying a plc.

Glanbia are quite happy to work on 3 month contracts in the US what's sauce for the goose.........

well in that case I'd say there's only one other option who might be interested in your supply on a 3 month basis, and there's F all motorways to kerry


I would assume that 3 month contracts would receive less favourable pricing on average than longer term ones as the supply is less guaranteed/stable.

freedominacup

JohnBoy wrote: »

well in that case I'd say there's only one other option who might be interested in your supply on a 3 month basis, and there's F all motorways to kerry


I would assume that 3 month contracts would receive less favourable pricing on average than longer term ones as the supply is less guaranteed/stable.

That's a big assumption. I on the other hand would assume that any dairy processor with suppliers locked in for 7 years would pay whatever they felt like knowing that the suppliers had put themselves into a legal stranglehold.

JohnBoy

It's not a big assumption at all. you'd be a fool to pay top price for a product like raw milk to a supplier who has no long term commitment. you need to factor in the impact on your business if that supplier leaves you hanging. this isnt grain they're buying, it's a product that has a couple of days unprocessed life span feeding into a continous manufacturing system


But that's a PLC buying product, it should be buying it for the lowest price it can possibly get away with.


A co-op (ie dairygold) should be paying as much as it can while still leaving a return to fund both future growth and to cope with price shocks. That's what co-ops are for.


Co-ops are democracies, if management are left in place paying crap prices for seven years with no action taken against them then there's no-one to blame but the shareholders/suppliers.

Suppliers are the business' owners, ownership brings both responsibility and power.


Obviously this does not apply in kerry/glanbia.

Farmer Ed

You are right in theory. But I'm afraid it doesn't seem to work like that in practice.
There are 12 people on the board of Dairygold and only a select group of 60 farmers have a say in electing the board. Mainly these are 60 farmers who have proven they will tow the party line. The system in place is the very same system of "democracy" practiced in China!! Don't take my word for it. Do your research.

As for the assumption that we will have a board deciding the price of milk for the next 7 years? That is a very big assumption! Dairygold will have borrowings well in excess of €200m if this goes ahead. If you sign that contract.You are agreeing that your milk can be used to pay back that debt.

In theory your right about the PLC model also. Just the differance between your avarage Dairygold and avarage Kerry supplier is. The avarage Dairygold suplier is part of a Co-Op that had to sell it's brands to Kerry to pay off bank debt and now are expected to put more money in to the Co-Op just to keep the thing afloat. While the avarage kerry supplier has about €250000 worth of shares that can be cashed in at any time. They are also guaranteed the best like for like price for their milk, up until at least 2025.

Depending on the Co-Op statment you want to believe. Dairygold are planning to spend €120m to €170m on a project in Mallow that according to GEA should be costing a good bit less than €40m.

Fact is the figures are not adding up!

We have every reason to worry about what we are being told. But we should be a lot more worried about what we're not being told!!!

delaval

Farmer Ed, I am wondering why can't Dairygold send it's milk to new Glanbia plant in Waterford and not spend your money on capital?

Farmer Ed

delaval wrote: »

Farmer Ed, I am wondering why can't Dairygold send it's milk to new Glanbia plant in Waterford and not spend your money on capital?

That might be no bad idea. Or even to Carbery or Kerry or where ever it makes sence to send milk.
At the risk of sounding like Mrs Gillhooly in killnascully. "I am not in the habit of repeating myself"
But I think there is more to this than meets the eye. For starters if you read the 2011 annual report. Dairygold are due to make a repayment to the banks of €52m this year. That is a jump from the €17m they had to pay back last year. If a 15 t/h plant can be built for les than €40m but they want to raise €170m.Then I think it's a fair question. Why do they need to raise all this money?
Could it be their flat broke? After all they are telling us the banks are looking for this. I honestly think this is just a way for them to raise money without them having to admit their broke.
Looks to me like some kind of a bail out plan! Just wish they would tell us the full truth.

freedominacup

Farmer Ed wrote: »

Looks to me like some kind of a bail out plan! Just wish they would tell us the full truth.

Good luck with that:rolleyes:

quader

just wondering will dairygold count all our reox shares in the new contracts

delaval

quader wrote: »

just wondering will dairygold count all our reox shares in the new contracts

Reox root of all your problems????

Farmer Ed

delaval wrote: »

Reox root of all your problems????

Reox is to Dairygold what Anglo Irish Bank is to the Irish economy.

Very interesting fact is that Arthur Cox and Co were the people who advised on the Reox deal and they were also advisers To Anglo before they went borke. They also advised Brian Linehan the night he bailed out Anglo. Plus they are still making a few bob out of NAMA.
We were told by Dairygold at the Mallow meeting that they also advised them about this contract.
Do you think we should be worried?

Here is a few claims to fame coppied from Arthur Cox's website and also a list of fees they have claimed from the state taken from a state website.

Acting for Dairygold Co-operative Society Limited on the demerger and spin-off of its property and other non-core interests into Reox Holdings plc

Acting for Dairygold Co-operative Society Limited on the demerger and spin-off of its property and other non-core interests into Reox Holdings plc

• Advising Anglo Irish Bank Corporation Limited on the provisions of acquisition, development and investment facilities aggregating in excess of €200,000,000 to various Portuguese companies in connection with the construction of villas and apartments in Portugal.
• Advising The Governor and Company of the Bank of Ireland as arranger on the provision of syndicated facilities of €315,000,000 to Reox Holdings plc to repay indebtedness, fund capital expenditure and fund property development.
• Advising The Governor and Company of the Bank of Ireland as arranger on the provision of €95,000,000 facilities to Dairygold Co-operative Society Limited to fund the acquisition of the shares in Dan Dairies (UK) Limited and certain assets and operations relating to Nutricia Infant Nutrition Limited’s Macroom Baby Food facilitie

• Advising Anglo Irish Bank Corporation Limited on the provisions of acquisition, development and investment facilities aggregating in excess of €200,000,000 to various Portuguese companies in connection with the construction of villas and apartments in Portugal.

• 
  Acting for the Department of Finance with respect to due diligence on specific Irish financial institutionsAdvising Anglo Irish Bank Corporation Limited on the provisions of acquisition, development and investment facilities aggregating in excess of €200,000,000 to various Portuguese companies in connection with the construction of villas and apartments in Portugal.
  
  Advising Anglo Irish Bank Corporation Limited on the provisions of acquisition, development and investment facilities aggregating in excess of €200,000,000 to various Portuguese companies in connection with the construction of villas and apartments in Portugal.
  Arthur Cox 2008 1,628,024 Legal advice in relation to the Bank Guarantee Scheme, Recapitalisation issues, Nationalisation, the National Asset Management Agency (NAMA), the Eligible Liabilities Guarantee Scheme (ELG), general financial and banking matters. Arthur Cox 2009 4,173,689 Legal advice in relation to the Bank Guarantee Scheme, Recapitalisation issues, Nationalisation, the National Asset Management Agency (NAMA), the Eligible Liabilities Guarantee Scheme (ELG), general financial and banking matters. Arthur Cox & Co 2010 4,804,884 Legal advice in respect of guarantees (CIFS & ELG), nationalisation of Anglo Irish Bank, recapitalisations and restructuring plans
  [533]Central Bank and Financial Regulator
  The Central Bank and Financial Regulator incurred the following advisory costs:
  Year and total cost Detail 2008 total cost €4,295,115 Financial Capability Study consultancy for 2008/09Advising Anglo Irish Bank Corporation Limited on the provisions of acquisition, development and investment facilities aggregating in excess of €200,000,000 to various Portuguese companies in connection with the construction of villas and apartments in Portugal.

delaval

Ed, what do you feelis the solution. The company needs to future proof it's processing to be able to handle extra. How do they finance this? I am interested as a Glanbia supplier and contracts will be the next thing to occupy us too. If what you say about 20 year contracts is true and I have no reason to dispute this, this is way too long an arrangement for either side.

Farmer Ed

delaval wrote: »

Ed, what do you feelis the solution. The company needs to future proof it's processing to be able to handle extra. How do they finance this? I am interested as a Glanbia supplier and contracts will be the next thing to occupy us too. If what you say about 20 year contracts is true and I have no reason to dispute this, this is way too long an arrangement for either side.

I honestly think you made big mistake in Glanbia also! But that's not really any of my business and a Dairygold supplier I have enough to be worrying about. I don't understand what you are saying about 20 year contracts? I never said anything about that? You must be mixing me up with someone else. If Co-Ops pay a good price then they won't have to worry about suppliers moving to other Co-Ops!

All I know is I don't believe Dairygolds figures regarding the cost of this new equipment and plant. I also dont believe they are going to get 63% extra milk. BUt even if they do. Can you click on the 3 links below . Then tell me hand on heart you believe the figures they are trowing around. There is no way it could cost the kind of money they are talking about!

I think this whole contract thing is largely just a way for Co-Ops to get some easy money off farmers, while at the same time keeping them under control. And also in Dairygolds case it would appear they need to raise money quick to keep the banks happy and this is an easy way of doing it.

http://www.dairyreporter.com/Processing-Packaging/Lakeland-opens-major-non-whey-drying-facility http://www.geap.co.nz/nnz/cmsdoc.nsf/WebDoc/webb8ghhdx
http://www.geap.com/geape/cmsdoc.nsf/webdoc/webb8gabad

delaval

Sorry 20 years I thought i read in one of your posts lack of sleep!!!!!!!!!!!!
Regardless as to wheather figures are correct or not expansion will happen over a 7 year period. You sound like a reasoned person, how will this be funded? It can't be built piecemeal.
Dairygold as I can see it is under money pressure and the only place to go is to the farmer, then as share holders are you not getting some value. I'm wondering what you feel your figures would show?

Farmer Ed

delaval wrote: »

Sorry 20 years I thought i read in one of your posts lack of sleep!!!!!!!!!!!!
Regardless as to wheather figures are correct or not expansion will happen over a 7 year period. You sound like a reasoned person, how will this be funded? It can't be built piecemeal.
Dairygold as I can see it is under money pressure and the only place to go is to the farmer, then as share holders are you not getting some value. I'm wondering what you feel your figures would show?

If you have time can you open the links that are on my last post.The cost given by Dairygold for upgrading the Mallow plant are about 6 to 7 times what a plant like that should cost!

Can I use this analogy? If you know the price of a new 100 hp tractor is say €50K and someone asked you to buy a share in a new 100 hp tractor, that they told you was costing €350k. Do you not think it would be only reasonble that you should ask them to explain what the hell was going on?

Read the links on my last post. Even if 63% expansion takes place. It shouldn't cost a fraction of what we are being led to believe! Clink on those links please. And if I'm missing something plese tell me. But I think we're being taken for a ride.

eomas

Finally someone is speaking about this contract. Like ye I am a Dairygold supplier who is tired of this contract. Being penalised for overproduction in May and June and yet being told have to produce more and share up etc, i stand to "donate" over 3 grand a year to the cause, pure madness. I was at the meeting in Mallow and the issue that frightened me the most was that all the board members etc all sung of the same hymn sheet praising Dairygold and how this was the way forward. Its like living in North Korea.

There is news of an EGM just wondering did any of ye get wind of this. There are a lot of rumors floating about at the moment and its hard to separate fact from fiction. Dairygold board members have been spotted in and around other co-ops, secret meetings etc all very odd.

According to local sources only 1100 have signed the contracts and the proposed 63% expansion is down to somewhere in the region of 30% at best. Figure we are being fiddled left right and centre. For my 2 cents can see Dairygold going under or else us having to bale them out. They need us on board to act as guarantees so we take the hit if it goes bang, wonder how many of them are willing to donate into the expansion fund.

Farmer Ed

eomas wrote: »

Finally someone is speaking about this contract. Like ye I am a Dairygold supplier who is tired of this contract. Being penalised for overproduction in May and June and yet being told have to produce more and share up etc, i stand to "donate" over 3 grand a year to the cause, pure madness. I was at the meeting in Mallow and the issue that frightened me the most was that all the board members etc all sung of the same hymn sheet praising Dairygold and how this was the way forward. Its like living in North Korea.

There is news of an EGM just wondering did any of ye get wind of this. There are a lot of rumors floating about at the moment and its hard to separate fact from fiction. Dairygold board members have been spotted in and around other co-ops, secret meetings etc all very odd.

According to local sources only 1100 have signed the contracts and the proposed 63% expansion is down to somewhere in the region of 30% at best. Figure we are being fiddled left right and centre. For my 2 cents can see Dairygold going under or else us having to bale them out. They need us on board to act as guarantees so we take the hit if it goes bang, wonder how many of them are willing to donate into the expansion fund.

If you private message me I can send you a copy of the motions for the EGM. 1. is to shelve the contract and do the homework properly and 2. Is for independent milk testing. Maybe you can sign it and get it back? If you would like to play your part maybe you can even get a few names on it. We will all need to work together if we want to bring about change. It's our co op and we still own whats left of it. But if we do nothing, we could just end up with a big debt and our milk having to pay it all back!

I was in Mallow too and you are so right about North Korea!

Farmer Ed

Anyone who would like to help with the EGM please PM me and I can send you a copy of the motion to sign. Will want you to post it back on monday.

jeaniebeanie

Was there a meeting in Mallow tonight?

farmertipp

Farmer Ed wrote: »

Has anyone any views on the way large organizations can try and control the press. I am a farmer supplying milk to Dairygold. As a lot of you might know by now Dairygold wants all it's members to sign a contract that will force us to sell all our milk to Dairygold up untill 2020. Also they want farmers to buy more shares and pay money in to a revolving fund. Most farmers I know have problems signing this contract and a few weeks ago farmers held a meeting in Mallow with a solicitor in order for them to hear independent legal advise. However on the night Dairygold management and board members came to the meeting with their own legal team from Dublin and also with a team of PR consultant's also from Dublin. They did their best to hijack the meeting but the vast majority of the 1080 farmers didn't want to hear what they had to say. A show of hands reveled that 90% of farmers at that meeting have a problem with this contract and the independent legal advice was not to sign it!
Two days later The Irish examiner published a report on what exactly happend at the meeting and as a result Dairygold has stopped advertising in the Irish Examiner. Up until that point Dairygold were advertising at least two times a week in the Examiner. I think it is made worse by the fact that Dairygold is owned buy the farmers who's views the Irish Examiner was willing to publish. However the board of Dairygold is not elected by the ordinary farmer but rather by a system of committee's very similar to the way the president of China is elected. I don't know exatly if Irish law can deal with this kind of bullying. But surely this is an attack on the freedom of the press and our right to freedom of speech.

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