Milk Price- Please read Mod note in post #1

kevthegaff

Fonterra arent looking so rosey environmental wise either, wastewater going into rivers http://www.agriland.ie/farming-news/fonterra-fined-e115000-after-causing-a-local-stink/

Dawggone

RightTurnClyde wrote: »

Californian reduction probably due more to water than price

( BIL went out 12 months ago to work in Silicon Valley, heard a few of the lads working with him talking about water charges and using a bucket in the shower. So he thought, oh here we go, the yanks taking the piss out of the paddy. But they are actually using a bucket in the shower to catch the cold water to be used in the toilet. He has a family of 2 adults and 3 kids. They're paying over $200 a month on water and if they go over their water 'quota' it could go up to $1000 a month very easily. )

Getting to know that feeling here now. We've got 8mm of rain in the last three months...relentless. The maize harvest is being downgraded daily.

jaymla627

mahoney_j wrote: »

Kiwis are sort of goosed as majority of their product is lumped into skim and whole milk powder .very little value added products

Seen a article where a sheep farmer bought a foreclosed dairy farm for 60% of the price the owner had paid 5 years previous , its amazing how the wheel is starting to turn out their.....
China could end up owning half of new zealand if things keep going south

kevthegaff

jaymla627 wrote: »

Seen a article where a sheep farmer bought a foreclosed dairy farm for 60% of the price the owner had paid 5 years previous , its amazing how the wheel is starting to turn out their.....
China could end up owning half of new zealand if things keep going south

I thought guys were doing well over there until last year??

jaymla627

kevthegaff wrote: »

I thought guys were doing well over there until last year??

The majority where, but their's always cases where lads completely lost the run of themselves buying farms/cows on 100% mortgages at insane prices banking on 7 dollar/kg plus payouts, good friend was out their last year and was telling us about a major start - up operation complete with 1000 cow cubicle shed and all the bells and whistles was up and running for 6 months and the receivers where called in, alot of guys locked in feed like maize/whole crop at sky high prices on the back of the 8 dollar payout and it backfired big time

mahoney_j

jaymla627 wrote: »

The majority where, but their's always cases where lads completely lost the run of themselves buying farms/cows on 100% mortgages at insane prices banking on 7 dollar/kg plus payouts, good friend was out their last year and was telling us about a major start - up operation complete with 1000 cow cubicle shed and all the bells and whistles was up and running for 6 months and the receivers where called in, alot of guys locked in feed like maize/whole crop at sky high prices on the back of the 8 dollar payout and it backfired big time

Wonder how the van luvheins are getting on out there with their big new barn and 23 robots ??
I wonder could the real low cost dairying in New Zealand have burst .environmental regulations are getting much bigger and more and more slurry storage is now required ,that combined with lots of farms been near or at max stocking rate and introducing more feed to get more milk......

C0N0R

mahoney_j wrote: »

Wonder how the van luvheins are getting on out there with their big new barn and 23 robots ??
I wonder could the real low cost dairying in New Zealand have burst .environmental regulations are getting much bigger and more and more slurry storage is now required ,that combined with lots of farms been near or at max stocking rate and introducing more feed to get more milk......

A lot of the corporate farms I came across were still trying to get as close to system one low cost farming as possible.

jaymla627

mahoney_j wrote: »

Wonder how the van luvheins are getting on out there with their big new barn and 23 robots ??
I wonder could the real low cost dairying in New Zealand have burst .environmental regulations are getting much bigger and more and more slurry storage is now required ,that combined with lots of farms been near or at max stocking rate and introducing more feed to get more milk......

5.75 kg/ms was when the operation started making money according to a article he was in last year so he's probably looking at a loss of nearly 1.5 million dollars next year at a 4 dollar payout on this farm, that will test his overdraft

kevthegaff

As someone pointed out, influence from china could occupy some of these farms, which entail would suit us, rather than 40k herds in china running at 50c/l to produce milk:-)

keep going

Is it the weather or what but ye seem to be on a right misery train tonight, milk was never going to stay at those price levells and wont spend that many days north of thirty next 18 months so realise this is the reality and get on with it.can mods please ban anybody from posting articles from experts telling us the price is going down, its having to read the paper to knowvits raining and they dont when its going to change either

tanko

keep going wrote: »

Is it the weather or what but ye seem to be on a right misery train tonight, milk was never going to stay at those price levells and wont spend that many days north of thirty next 18 months so realise this is the reality and get on with it.can mods please ban anybody from posting articles from experts telling us the price is going down, its having to read the paper to knowvits raining and they dont when its going to change either

I hope you didn't watch the BBC news this evening and see the story about the farmer with the Rotary parlour going bust.

frazzledhome

tanko wrote: »

I hope you didn't watch the BBC news this evening and see the story about the farmer with the Rotary parlour going bust.

I know a few with rotary parlours not going bust

There's fierce leaping up and down going on over there about price. The funny thing is price isn't the issue its massive amounts of bad debt on farms that's causing the problems.

By bad debts I mean massive sheds, 4 big tractors, cows indoors and only lows or drys allowed out, shyte milking setups and an over reliance on bought in cake.

They have loads if land while very few have any grazing infrastructure. They've gone down a yield at all costs system with calving Ayr and 30% of their cows always dry.

It's selling half their kit and uncomplicating their systems they should be at instead of emptying shelves in Morrisons.

I'm friendly with a few grass based guys over there and there's not a word out of them. They are quietly sitting in the wings awaiting opportunity just like they did in 09

kowtow

keep going wrote:

can mods please ban anybody from posting articles from experts telling us the price is going down, its having to read the paper to knowvits raining and they dont when its going to change either

Would it be ok to post articles about the price stabilising or going up soon? .. just wanted to check.

Dawggone

frazzledhome wrote: »

I know a few with rotary parlours not going bust

There's fierce leaping up and down going on over there about price. The funny thing is price isn't the issue its massive amounts of bad debt on farms that's causing the problems.

By bad debts I mean massive sheds, 4 big tractors, cows indoors and only lows or drys allowed out, shyte milking setups and an over reliance on bought in cake.

They have loads if land while very few have any grazing infrastructure. They've gone down a yield at all costs system with calving Ayr and 30% of their cows always dry.

It's selling half their kit and uncomplicating their systems they should be at instead of emptying shelves in Morrisons.

I'm friendly with a few grass based guys over there and there's not a word out of them. They are quietly sitting in the wings awaiting opportunity just like they did in 09

I not entirely sure that the 4 tractors and the big shed are their only problems...imho their strong currency and complete domination by supermarkets may have more to do with it.

frazzledhome

Dawggone wrote: »

I not entirely sure that the 4 tractors and the big shed are their only problems...imho their strong currency and complete domination by supermarkets may have more to do with it.

Totally accept that but there is hard core bad debt built in and if it wasn't there they'd be more resiliant. They seem to have no reserves on the back of 18 mths good prices.

jaymla627

Dawggone wrote: »

I not entirely sure that the 4 tractors and the big shed are their only problems...imho their strong currency and complete domination by supermarkets may have more to do with it.

I take it you haven't visited a UK/northern Ireland dairy farmer recently was on a farm walk last year on a 200 cow unit, just shy of a million had been spent on a new cubicle shed and 4 robots with a perfectly good 20 unit westfalia parlour with all the bells and whistles moth-balled,further to this over 250,000 euros worth of machinery was parked up looking nice and shiny....
Said farmer had all stocked housed including incalf heifers/calves/dry cows despite having 150 acres around the farmyard of really good dry ground was a lovely August day last year when we visited and the guy had aftergrass everywhere, cows where in desperate condition too as they where on crap second cut silage and 8kg of meal was going in to produce just over 2 kg of milk solids was laughable the wastage in this system and it really isn't hard to see why a good proportion of these guys are in serious bother at present time

Dawggone

Obviously they are stupid feckers that deserve to die an economic death so.

whelan2

If people haven't signed the glanbia msa, what's to stop their milk not being collected at all?

stanflt

Any way lads some really good news is that in the next twelve months we will see a steady rise in mik prices as low prices brings new buyers to the markets which creates a higher floor on the whole thing- what I don't want to see in the next few years and people will say I'm crazy is milk price above 36cpl- we don't want to see price elasticity of demand again for a long time

Best thing for low prices is low prices

Chin up and be positive

Take a break if things are worrying you- and don't forget to talk( to anyone)

The future is bright- the future is white

Dawggone

Lol. Love it "The future is bright, the future is white".

Thanks Stan.

kevthegaff

I've yet to see a dairy farmer around this area go bust! Lads are always talking about certain farmers in bad price year s but the machine is still going 1st Feb. I do have myself a bit jealous of they're shiney kits and parlors but wouldn't like to see anyone go bust!

kowtow

stanflt wrote: »

Best thing for low prices is low prices

ABSOLUTELY

This should be tatooed on the hand of every operator in a free market.

And rammed with a dosing gun down the throat of those responsible for skewing the markets with price support / intervention / etc. etc. etc.

kowtow

By the by, from what I saw of the supermarket protests the main thrust appeared to be for the benefit of the public - basically to encourage them to value English milk and understand a little of what a quality product it is and what goes in to producing it.

Notwithstanding global commodity prices, that is not a bad thing and is equally important in Ireland. We produce a wonderful, quality, product and - whilst global commodity markets don't care a fig for that - it doesn't mean that domestic markets should be allowed to devalue our milk in the same way.

frazzledhome

whelan2 wrote: »

If people haven't signed the glanbia msa, what's to stop their milk not being collected at all?

Co op members milk will always be collected and cannot be refused unless on quality or other grounds. Make no mistake they want milk.

People must remember the co op isn't anything other than the property of its members. Without its members it wouldn't exist

orm0nd

frazzledhome wrote: »

I know a few with rotary parlours not going bust

There's fierce leaping up and down going on over there about price. The funny thing is price isn't the issue its massive amounts of bad debt on farms that's causing the problems.

By bad debts I mean massive sheds, 4 big tractors, cows indoors and only lows or drys allowed out, shyte milking setups and an over reliance on bought in cake.

They have loads if land while very few have any grazing infrastructure. They've gone down a yield at all costs system with calving Ayr and 30% of their cows always dry.

It's selling half their kit and uncomplicating their systems they should be at instead of emptying shelves in Morrisons.

I'm friendly with a few grass based guys over there and there's not a word out of them. They are quietly sitting in the wings awaiting opportunity just like they did in 09

I agree, but know guys there & they are struggling big time & not running lavish set ups , 1 guy I know would be a fair shrewd operator & he tells me his wife actually makes more with a prt time job.

as Dawg mentioned below the strong sterling is a big factor

I asked a couple of weeks back , what would the price here be if the € was strong? oddly enough no body replied or commented

the guys that were forecasting milk price this time last were'nt very accurate

they got 1 thing right , price would drop but also predicted we'd would on an upward curve this back end

frazzledhome

orm0nd wrote: »

I agree, but know guys there & they are struggling big time & not running lavish set ups , 1 guy I know would be a fair shrewd operator & he tells me his wife actually makes more with a prt time job.

as Dawg mentioned below the strong sterling is a big factor

I asked a couple of weeks back , what would the price here be if the € was strong? oddly enough no body replied or commented

the guys that were forecasting milk price this time last were'nt very accurate

they got 1 thing right , price would drop but also predicted we'd would on an upward curve this back end

If €/£ was reversed Wed be 30% worse off. That's not my point, I stating that a business must be set up to take these fluctuations as they are only short term, painful but short term.

Forecast I got last Nov was 24c/l, not far off that now. It can't rise till it bottoms out but bottom out it will and the sooner the better

Timmaay

When it eventually bottoms out, what will drive the price increase the far side? Do we think many customers are staying outa the market waiting for the bottom, and at any sign of an upturn possibly turn it into a bull market? Or simple as is are we in a total oversupply situation and need to wait for a mix of a serious weather event, and the least efficient to fall to drop back the supply. Or is the USA driving on so hard regardless of price that it will take a serious increase in the price of grain to make them hit the brakes. But with fracking freeing up ethanol land this might not happen that quick again, if ever.

keep going

stanflt wrote: »

Any way lads some really good news is that in the next twelve months we will see a steady rise in mik prices as low prices brings new buyers to the markets which creates a higher floor on the whole thing- what I don't want to see in the next few years and people will say I'm crazy is milk price above 36cpl- we don't want to see price elasticity of demand again for a long time

Best thing for low prices is low prices

Chin up and be positive

Take a break if things are worrying you- and don't forget to talk( to anyone)

The future is bright- the future is white

Thanks stan it took someone of your standing to turn this thread around, go on lead us into the promised land like the new messiah.........:-)

Buford T. Justice XIX

orm0nd wrote: »

I agree, but know guys there & they are struggling big time & not running lavish set ups , 1 guy I know would be a fair shrewd operator & he tells me his wife actually makes more with a prt time job.

as Dawg mentioned below the strong sterling is a big factor

I asked a couple of weeks back , what would the price here be if the € was strong? oddly enough no body replied or commented

the guys that were forecasting milk price this time last were'nt very accurate

they got 1 thing right , price would drop but also predicted we'd would on an upward curve this back end

Does that matter much, though?

We will still be buying/selling into the same exchange rate, albeit with a time lag of a few months. So the difference between purchases and sales will still be the same, in Euro terms?

Or am I not taking it seriously enough?

kowtow

I think there is a lot up in the air lately, particularly with the state of the €

Money supply in Europe is growing faster than expected, and I wouldn't expect ECB to carry on printing at their current rate for too much longer. It is possible that we will go to € / $ parity but I don't realistically see us trading any volume below that in the near / medium term. For that reason alone I expect that we may now be seeing as competitive a euro exchange rate as we are going to get for the time being. I suspect that the next really big move in the € might come from its implosion (and bear in mind that could well be a strong upward move). That day is - as always - being postponed by the vanity of European politicians.

If we didn't have the competitive euro now? Surely we would be close or even below the 2009 lows. I wasn't around for those but others will remember what the farmgate price was at the time.

More generally we have seen a widespread collapse in the whole commodity basket - from oil through to milk. There is good reason to believe that most of this move is now over, but that DOES NOT mean to say that a new bull market and the recovery of prices to levels seen in recent years is on the cards at all.

Nobody has a crystal ball, least of all me, but if the GDT traded in a range somewhere between its current level and 700-900 over the next few years and the euro consolidated and then began to recover a bit of ground against the dollar I wouldn't be too surprised. All of this may well mean that we have some way down to go as far as Irish farmgate milk prices are concerned, but more importantly for the longer term I wonder if we aren't going to see prices settle out and cycle around a somewhat lower base than many were expecting.

It's one thing to expand into a market where you expect prices to jump around between 25c and 40c and you reckon you have things covered. It's another thing entirely to repay expansion debt in a market where prices cycle between 25c and 30c for a decade or two.

Some might find themselves wishing for volatility yet. The market will figure out how to get most people on the wrong side of it.