Milk Price- Please read Mod note in post #1

Milked out

TireeTerror wrote: »

and that is why Im not overly concerned about the prices. I cant afford to go to the pub at the weekend, so if the price drops in the shops fantastic.

There are a lot of campaigns saying we (public) would be willing to pay more for milk to allow farmers to earn a living. I wouldnt want to pay more. Its up to the farmers to sort it out, the shop makes plenty of profit and if anything they can cut that profit and pay more to farmers.

Another point of view is that if you work in an industry that doesnt work, change industry. If your industry is being bullied by supermarkets, then stand together and fight back and nobody sell them any milk at all. Probably they would get it abroad and farmers couldnt afford to sustain themselves in the interim, but I dont feel it should be down to the consumer to subsidy the industry when the supermarkets earn so much from it.

I assume it's on sky or BBC u see these campaigns?, 90% of irish milk is exported in the form of milk powder butter cheese baby formula.etc so the milk price is at the mercy of global markets. In countries such as the UK France etc they have a much larger domestic market and a larger portion of their production is sold as fresh milk products in the supermarkets hence the way they are campaigning the public to buy there own produce.
However you are correct in that the margin the supermarket and large multiples take is over the top considering it is literally landed in to the fridge for them.
In the farmers standing up for themselves in the recent beef protests the competition authority came out against the farmers, go figure

TireeTerror

Milked out wrote: »

I assume it's on sky or BBC u see these campaigns?, 90% of irish milk is exported in the form of milk powder butter cheese baby formula.etc so the milk price is at the mercy of global markets. In countries such as the UK France etc they have a much larger domestic market and a larger portion of their production is sold as fresh milk products in the supermarkets hence the way they are campaigning the public to buy there own produce.
However you are correct in that the margin the supermarket and large multiples take is over the top considering it is literally landed in to the fridge for them.
In the farmers standing up for themselves in the recent beef protests the competition authority came out against the farmers, go figure

It just doesnt make sense that they would pay less than it costs to produce. If I was making something that I couldnt sell for a sustainable profit I would stop selling it. I know its easy to say that, and Im sure farmers are emotionally and financially invested in milking, but really how long should an individual allow themselves to be screwed over repeatedly?

It was the UK milk market where I saw all the campaigns. Im Scottish so see loads of stuff on facebook from my mates back home. From walking cows into supermarkets and buying all the milk of the shelves. It highlights the issue, but will it do much?

Greengrass1

TireeTerror wrote: »

It just doesnt make sense that they would pay less than it costs to produce. If I was making something that I couldnt sell for a sustainable profit I would stop selling it. I know its easy to say that, and Im sure farmers are emotionally and financially invested in milking, but really how long should an individual allow themselves to be screwed over repeatedly?

It was the UK milk market where I saw all the campaigns. Im Scottish so see loads of stuff on facebook from my mates back home. From walking cows into supermarkets and buying all the milk of the shelves. It highlights the issue, but will it do much?

MP will start to hit us here in Ireland from now on imo. Most here have a good handle on cost of production but majority in England don't and that's were alot of there problem lies. Big sheds. Covered silage pits and fancy parlours and cows housed all yr round and it costing double to feed them as a result. You'll notice the ladd in England thst have focused on producing milk as cheaply as possible are not in as bad a way as most are.

Imo nit saying they all need to go low cist jex route. Farmers here are well able to achieve 90% of the yeild they are from grass and and there cost of production is alot lower in comparison

kowtow

TireeTerror wrote: »

If I was making something that I couldnt sell for a sustainable profit I would stop selling it. I know its easy to say that, and Im sure farmers are emotionally and financially invested in milking

It's not a question of emotional investment - unless feeding & bedding animals before taking your own wages is considered emotional.

It is - like most businesses - the nature of a cyclical market. Many businesses dont make a sustainable profit over substantial parts of a cycle, Twitter, facebook, Google all spring to mind. I don't think we would accuse their operators of emotional investment or being irrational in continuing to operate their businesses. You can't switch off a dairy farm with 100 cows any more easily than you can switch off a software business employing 100 carefully trained and disciplined programmers..

There is a wider question of whether Ireland should attempt at all to position itself as a global commodity supplier when we have such a high European fixed & labour cost base. And there are big questions in the UK (these are yet to come in Ireland) of how much of a monopoly force is in play further up the chain, at the co-op, processor, or supermarket level.

I think the UK farmers are simply drawing attention to the fact that if we are indeed in a food factory, they are simply workers in it, they're not operating it.

Which is part of a much bigger global question of food security and sustainability and what that actually means. It may be that in a world of global markets, food really ought to be the thing which stays local. I wouldn't buy software from a company which didn't use it's own products, but in the food industry - generally - I simply have no way of knowing.

Odd, that.

Blackgrass

Greengrass1 wrote: »

MP will start to hit us here in Ireland from now on imo. Most here have a good handle on cost of production but majority in England don't and that's were alot of there problem lies. Big sheds. Covered silage pits and fancy parlours and cows housed all yr round and it costing double to feed them as a result. You'll notice the ladd in England thst have focused on producing milk as cheaply as possible are not in as bad a way as most are.

Imo nit saying they all need to go low cist jex route. Farmers here are well able to achieve 90% of the yeild they are from grass and and there cost of production is alot lower in comparison

But a lot of England doesn't suit grazing for 10 months of the year especially on clay which is a lot of the country and arable wipes the dairy off the map from the midlands eastwards,

Greengrass1

Blackgrass wrote: »

But a lot of England doesn't suit grazing for 10 months of the year especially on clay which is a lot of the country and arable wipes the dairy off the map from the midlands eastwards,

I was over there twice and seen the finest of ground around Birmingham and all cows in doors
"Let out fir exercise"
And in Wales there was some very big grass based farmers. Scotland from what I've heard doesn't suit grazing all that well.
The whole country can't be that wet.
If there able to feed 500 cows silage for the yr they surely have the grass. Alot of these have the land around the yard too

Sacrolyte

It's better this way. Not for them but for us. Their banging the tins clearing the shelves and making all the noise. Where as here we can still make a profit albeit a smaller one on our grass based system at present prices. Where I would worry is if a big swath of UK farmers went down the grass based route then it would be much easier for retailers,processors traders ect to drive the whole market to beat the price down even further. At the end of the day the middle men don't want dairy farmers to go out of business. They just want to get every last ounce of sweat out of them before they pull the pin.

kowtow

Greengrass1 wrote: »

The whole country can't be that wet.
If there able to feed 500 cows silage for the yr they surely have the grass. Alot of these have the land around the yard too

at the end of the 90's I bought a small dairy farm in the UK - good flat grass, 145 acres around the yard. Apart from about 10-12 acres of it which was ancient woodland. From what I remember the land element was around £2000-2500 / acre at the time.

The farmer was getting out of dairy because that farm had become too small to support the family despite his additional haulage work.

We all need to look very hard at what dairy farms in the UK have done, but we need to take off the green jersey and dismiss the notion that their operators are somehow stupid, or lazy, or don't realise that cows can eat grass. They aren't, they have thought hard about this and they were in many respects where we are today ten or twenty years ago.

I suspect that the clue lies in labour units and litres - if a labour unit @ 40K pa + land at €300 / acre adds 12-15c / litre to a 5,000 litre cow then it *may* be that the same land and labour supporting a 10,000 litre cow make more sense once you go to past the 100-120 odd cow level. Clearly a wider range of cheaper concentrates which the UK has would help.

a 4 million litre unit costing in 3 full time labour units @ 40K every single year - of which one is always the owner operator - might well need substantial working capital to buffer low price years, but that doesn't make it an inherently unprofitable business. It may well be that the return on capital invested in the medium term is more sustainable than the grass based farmer held to ransom by overpriced land around the parlour and with a lot less litres to soak up the fixed costs, in good years or bad.

I recall a board at Moore Park a couple of years ago illustrating the no. of cows required to make the average industrial wage. The notional 40K (or whatever) that we are all trying to provide for may well take 80 or 100 cows today, but fixed costs and family costs keep rising. What happens, in the fullness of time, when 40K is just not enough, and 120 cows won't cut the mustard... the acres around the parlour aren't going to get bigger on their own.

Our own land and our own living are part of our fixed costs, no matter how much we pretend otherwise, even if for the time being in a bad year some of us are lucky enough to be able to put them on the long finger.

RightTurnClyde

Brilliant kowtow, bullseye. The best post I've read in a very very long time.

kowtow

The other point to make is that all we are seeing in the UK is the market doing what it should.

There are intensive farmers expanding, with more cash in the bank from the last couple of years than they ever had before.

There are grass based farmers twittering - not just because they are finding it easier to sustain the farm - but because they are determined to make a premium consumer market for their grass based family farm milk (hint... they won't be turning it into powder in a hurry)

There are operators with a four unit parlour and a queue of cars down the lane coming in to buy raw milk at £2 or £3 a litre

And there are plenty of small co-operatives and partnerships making cheese, yoghurt, milkshakes, etc. etc. etc. - some of which are now on a scale which would put our own smaller co-ops to shame. All of these things have sprung up in their latest incarnations since market forces started doing their thing a couple of decades ago... we must be careful in this country to let all these things happen, if Ireland has learned anything in the last decade it should be that prosperity requires hard work & creativity. These are grown up games, and markets never do what they are told, even by an Irish Government minister.

Dawggone

You are on song today Kowtow!
You first post is exactly the point I've been trying to make for ages but I don't have the linear thinking to write it down. Thanks.


Exit. On your second post, there is some news about today of an Irish cheese ecoli scare from raw milk. Small producer from the west I think. Doesn't do much for native industry.

kowtow

Dawggone wrote: »

Exit. On your second post, there is some news about today of an Irish cheese ecoli scare from raw milk. Small producer from the west I think. Doesn't do much for native industry.

It does not indeed, haven't seen the piece myself.

kevthegaff

Why is there some many "scares" in ireland. Are other countries covering things up?

kowtow

kevthegaff wrote: »

Why is there some many "scares" in ireland. Are other countries covering things up?

We certainly have an odd approach to journalism.

Agriland today has an article headlined "Dairy pickup is on the horizon, but too early to say when"

What they are actually reporting is Kerry group:

"It’s not on the horizon as we speak but hopefully we will see improvement"

Surely in this case the pick-up is actually over the horizon?

Thank God they are driving laptops and not big Container ships, they'd be a danger to themselves.

frazzledhome

kowtow wrote: »

We certainly have an odd approach to journalism.

Agriland today has an article headlined "Dairy pickup is on the horizon, but too early to say when"

What they are actually reporting is Kerry group:

"It’s not on the horizon as we speak but hopefully we will see improvement"

Surely in this case the pick-up is actually over the horizon?

Thank God they are driving laptops and not big Container ships, they'd be a danger to themselves.

Pure gold

If this is the stuff your posting from now on I hope the price stays down. Bringing in cows and LMAO pure brilliant

RightTurnClyde

kowtow wrote: »

We certainly have an odd approach to journalism.

Agriland today has an article headlined "Dairy pickup is on the horizon, but too early to say when"

What they are actually reporting is Kerry group:

"It’s not on the horizon as we speak but hopefully we will see improvement"

Surely in this case the pick-up is actually over the horizon?

Thank God they are driving laptops and not big Container ships, they'd be a danger to themselves.

😄
You're on fire today.....have you been at the blue cheese cabinet again

Blackgrass

Greengrass1 wrote: »

I was over there twice and seen the finest of ground around Birmingham and all cows in doors
"Let out fir exercise"
And in Wales there was some very big grass based farmers. Scotland from what I've heard doesn't suit grazing all that well.
The whole country can't be that wet.
If there able to feed 500 cows silage for the yr they surely have the grass. Alot of these have the land around the yard too

SW w/s Wales and a line down the centre on the west side in pockets is dairy country mainly and at that arable is still big in a lot of that also. You don't seem to grasp what clay is! At that the dairy country has a lot of TB in Sw

Sacrolyte

RightTurnClyde wrote: »

😄
You're on fire today.....have you been at the blue cheese cabinet again

Christ lads his head will get so big it won't fit down the pit. Not a bad post like...

kowtow

Sacrolyte wrote: »

Christ lads his head will get so big it won't fit down the pit. Not a bad post like...

When you milk as slowly as I do you have a lot of time to fume about bad journalism.

keep going

kowtow wrote: »

We certainly have an odd approach to journalism.

Agriland today has an article headlined "Dairy pickup is on the horizon, but too early to say when"

What they are actually reporting is Kerry group:

"It’s not on the horizon as we speak but hopefully we will see improvement"

Surely in this case the pick-up is actually over the horizon?

Thank God they are driving laptops and not big Container ships, they'd be a danger to themselves.

new Zealand should see the recovery before us because they are nearer to the horizon so.............:P:P

Sacrolyte

kowtow wrote: »

When you milk as slowly as I do you have a lot of time to fume about bad journalism.

It's where I get my best ideas. I call it my twice daily meditation sessions.

freedominacup

kowtow wrote: »

at the end of the 90's I bought a small dairy farm in the UK - good flat grass, 145 acres around the yard. Apart from about 10-12 acres of it which was ancient woodland. From what I remember the land element was around £2000-2500 / acre at the time.

The farmer was getting out of dairy because that farm had become too small to support the family despite his additional haulage work.

We all need to look very hard at what dairy farms in the UK have done, but we need to take off the green jersey and dismiss the notion that their operators are somehow stupid, or lazy, or don't realise that cows can eat grass. They aren't, they have thought hard about this and they were in many respects where we are today ten or twenty years ago.

I suspect that the clue lies in labour units and litres - if a labour unit @ 40K pa + land at €300 / acre adds 12-15c / litre to a 5,000 litre cow then it *may* be that the same land and labour supporting a 10,000 litre cow make more sense once you go to past the 100-120 odd cow level. Clearly a wider range of cheaper concentrates which the UK has would help.

a 4 million litre unit costing in 3 full time labour units @ 40K every single year - of which one is always the owner operator - might well need substantial working capital to buffer low price years, but that doesn't make it an inherently unprofitable business. It may well be that the return on capital invested in the medium term is more sustainable than the grass based farmer held to ransom by overpriced land around the parlour and with a lot less litres to soak up the fixed costs, in good years or bad.

I recall a board at Moore Park a couple of years ago illustrating the no. of cows required to make the average industrial wage. The notional 40K (or whatever) that we are all trying to provide for may well take 80 or 100 cows today, but fixed costs and family costs keep rising. What happens, in the fullness of time, when 40K is just not enough, and 120 cows won't cut the mustard... the acres around the parlour aren't going to get bigger on their own.

Our own land and our own living are part of our fixed costs, no matter how much we pretend otherwise, even if for the time being in a bad year some of us are lucky enough to be able to put them on the long finger.

Having been in college over there and done some work placements at the time I would disagree that they were in a similar place to where we are now twenty years ago. Most of the farms I worked on and visited had the remnants of paddock systems in place. They had turned their backs on grazing and were focused on moc(margin over concentrates)as the touchstone for measuring performance. Another reason for the change away from grazing was due to milk price structure. The top milk price was in July/August having been pushed back from October/November. The October peak price was to encourage farmers away from seasonal spring production to reduce pressure on processing facilities. Milk from forage was and still is afaics around 2000l per cow. Regardless of whether you are grazing 300 days per year or total confinement this is only about half what it should be. This is their biggest problem.

Imo the biggest reason irish dairy farmers are not up in arms at the moment is the amount of low hanging fruit we are harvesting this year. Most of the increase in output we have seen has come with almost no increase in fixed costs and minimal increase in variable costs and there's still a good bit of this to harvest.

I do agree that in a relatively short period of time we will have to make decisions relating to output per cow to get a better return from our fixed costs and land base. If we lose sight of milk from forage in the process there will be casualties.

Dawggone

freedominacup wrote: »

Imo the biggest reason irish dairy farmers are not up in arms at the moment is the amount of low hanging fruit we are harvesting this year. Most of the increase in output we have seen has come with almost no increase in fixed costs and minimal increase in variable costs and there's still a good bit of this to harvest.

Forgive me Free but I posted this on a private members forum for larger (!) french dairy farmers. (I may have the rose tinted specs on when I translated it!).
The reaction has been pretty intense, to put it mildly...

The main thrust of the comments vary from the usual "lazy Irish let us do all the heavy lifting" to "if this price collapse was last March they might have a different perspective". Etc...



BTW on your point of margin over concentrates, I really can't understand the gullibility of farmers to fall for salesman speak.

Milked out

http://blogs.telegraph.co.uk/finance/timworstall/100018680/dairy-farmers-dont-need-to-make-a-fair-profit-the-falling-price-of-milk-is-a-sign-that-some-of-them-need-to-quit/

Milked out

http://blogs.telegraph.co.uk/finance/timworstall/100018680/dairy-farmers-dont-need-to-make-a-fair-profit-the-falling-price-of-milk-is-a-sign-that-some-of-them-need-to-quit/

Buford T. Justice XIX

Dawggone wrote: »

Forgive me Free but I posted this on a private members forum for larger (!) french dairy farmers. (I may have the rose tinted specs on when I translated it!).
The reaction has been pretty intense, to put it mildly...

The main thrust of the comments vary from the usual "lazy Irish let us do all the heavy lifting" to "if this price collapse was last March they might have a different perspective". Etc...



BTW on your point of margin over concentrates, I really can't understand the gullibility of farmers to fall for salesman speak.

We have a huge advantage over the UK farmer in that Teagasc, for all its faults, is totally independent and will tell us the truth even if we don't want to hear it at times.

You only have to witness the increasing numbers of UK and NI farmers going to Moorepark and IGA farm walks and talking to them is frightening, in terms of the lack of practical farm research and ability to transmit the little of it done to the farmers that are looking for it.

trixi2011

There seems to be a lot of talk about why a lot of UK farms are farming indoor units and pushing litres the simple answer is that is what the milk companies want in the UK. guys are unable to find a buyer for there milk if they were to go all spring calving or if they do they will be penilised heavily with sesonality penelties . Not all the farmers who are housed and calve all year round have mad high cost of production that you are currently seeing in the media. Definitely agree that most higher input farms could graze more grass .

freedominacup

Dawggone wrote: »

BTW on your point of margin over concentrates, I really can't understand the gullibility of farmers to fall for salesman speak.

It was being taught in management classes as a tool for measuring herd performance at the time. As someone else said there was very little research not fully funded by someone selling something.

Dawggone

Buford T. Justice V wrote: »

We have a huge advantage over the UK farmer in that Teagasc, for all its faults, is totally independent and will tell us the truth even if we don't want to hear it at times.

Sorry Sherif but I can't agree...
Teagasc is not 'totally' independent. It is a semi-state body. Do you think that RTE is totally independent?

Are you going to take Kowtow's advice and take off the green jersey?

Buford T. Justice XIX

Dawggone wrote: »

Sorry Sherif but I can't agree...
Teagasc is not 'totally' independent. It is a semi-state body. Do you think that RTE is totally independent?

Are you going to take Kowtow's advice and take off the green jersey?

It's independent in terms of not pushing a particular commercial agenda. Yes, it's government funded and has to be seen to push their particular agenda but, in fairness, most farmers would minimise that particular agenda and most Teagasc advisors that I know wouldn't put much emphasis on it either.

And I always wear a green jersey, the colour suits my complexion:)