Milk Price- Please read Mod note in post #1

frazzledhome

mahoney_j wrote: »

Market was returning 42/43 cent for a few months during peak,no one had the balls to go over 40 and money was held and is now been used to support price through market trough .all coops did same now I ask the question how is the biggest player in the country paying 25 cent per litre and the west cork boys paying 29 with rest 26.5/27
Plus ????.question needs to be asked.the crowd I know paid a great price over last year ,.the leading price actually I think but we had a conticious Coll charge of 0.6 cent per litre deducted which dragged our net price back .this is now gone and we are getting a 0.2 cent top up for sub 200 k scc milk also along with some other things thrown in to stop any more of us jumping ship !!.yes I'd love a fixed price scheme but I wouldn't like to have to shell out 10 k for shares to qualify for top ups .i thought about going but the share up was going to be too penal for me now considering my stage of development and without top ups it was a no brainier to stay put ,also the plc element and having shareholders to keep happy firstly was a concern

What sweeteners are thrown in to stop people jumping ship? I suppose a €10k investment in shares with an underlying value of €100k would be a bad idea, especially in a coop valued at €2billion.

All repayments required to service the €200m we have invested in plant will be paid. Yes price is 25c as is Dairygolds and we get 1.5 top up. By your own admission you're getting a top up but you've no idea of the effect on your coops books.

I'm not suggesting that I'm happy with the price.

mahoney_j

frazzledhome wrote: »

What sweeteners are thrown in to stop people jumping ship? I suppose a €10k investment in shares with an underlying value of €100k would be a bad idea, especially in a coop valued at €2billion.

All repayments required to service the €200m we have invested in plant will be paid. Yes price is 25c as is Dairygolds and we get 1.5 top up. By your own admission you're getting a top up but you've no idea of the effect on your coops books.

I'm not suggesting that I'm happy with the price.

Sweetners included ,dropping of Coll charge,scc bonus ,removal of penalties if we went over what was committed last October ,a standardised share scheme instead of bands first announced

Question I'd be asking if Glanbia supplier is with the big milk pool,shiny new plants big contracts etc why the bottom of the pile milk price and why over last year have we been the driver down of prices ???.how do the much smaller and looks more like it efficient west cork coops keep doing it

On the 10 k investment,I get why it's required but for majority of small medium suppliers it a hefty investement and without it you get no top ups and might as well supply someone else

kowtow

mahoney_j wrote:

Question I'd be asking if Glanbia supplier is with the big milk pool,shiny new plants big contracts etc why the bottom of the pile milk price and why over last year have we been the driver down of prices ???.how do the much smaller and looks more like it efficient west cork coops keep doing it

+1000

Making investments is the easy bit.

It's getting returns on them which matters.

Brown Podzol

kowtow wrote: »

+1000

Making investments is the easy bit.

It's getting returns on them which matters.

Is the return ever going to be seen in milk price? Look to Kerry, always average milk price ,left the profits be reflected in the share price which is tax free until sold .attracting capital gains tax then. The tax you would have paid if profits had been paid on milk price are making a return for you in the meantime.All fine if all the shares are held by farmers but over time they slip away through sales and family settlements. No such dilemma in Dairygold, the biggest co-op in the country and paying the lowest price of all processors, where is the imperative for amalgamation?.

Buford T. Justice XIX

Is there an upturn in dairy prices coming?

http://www.agriland.ie/farming-news/futures-market-signals-to-further-dairy-uplift-in-september/

alps

IF you read the Teagasc report on Irish dairy that Kowtow posted you well know that you can compete without any problems in this market.

Apologies for not paying attention....could someone post the link to the teagasc report mention above posted by Kowtow some time back?

Thanks a million. .

keep going

mahoney_j wrote: »

Market was returning 42/43 cent for a few months during peak,no one had the balls to go over 40 and money was held and is now been used to support price through market trough .all coops did same now I ask the question how is the biggest player in the country paying 25 cent per litre and the west cork boys paying 29 with rest 26.5/27
Plus ????.question needs to be asked.the crowd I know paid a great price over last year ,.the leading price actually I think but we had a conticious Coll charge of 0.6 cent per litre deducted which dragged our net price back .this is now gone and we are getting a 0.2 cent top up for sub 200 k scc milk also along with some other things thrown in to stop any more of us jumping ship !!.yes I'd love a fixed price scheme but I wouldn't like to have to shell out 10 k for shares to qualify for top ups .i thought about going but the share up was going to be too penal for me now considering my stage of development and without top ups it was a no brainier to stay put ,also the plc element and having shareholders to keep happy firstly was a concern

A word of caution as regards the current west cork price.because we mainly produce cheese the price movements tend to happen later than other processors so may be ye will rise before us as well.dont think we will maintain the price gap but its nice at the minute-july milk 32..04 at 3.5 p and 4.05 bf

yosemitesam1

alps wrote: »

IF you read the Teagasc report on Irish dairy that Kowtow posted you well know that you can compete without any problems in this market.

Apologies for not paying attention....could someone post the link to the teagasc report mention above posted by Kowtow some time back?

Thanks a million. .

www.teagasc.ie/publications/2011/1004/CompetitivenessofMilkProductionweb230611.pdf

kowtow

Brown Podzol wrote: »

Is the return ever going to be seen in milk price? Look to Kerry, always average milk price ,left the profits be reflected in the share price which is tax free until sold .attracting capital gains tax then. The tax you would have paid if profits had been paid on milk price are making a return for you in the meantime.All fine if all the shares are held by farmers but over time they slip away through sales and family settlements. No such dilemma in Dairygold, the biggest co-op in the country and paying the lowest price of all processors, where is the imperative for amalgamation?.

Quite.

I haven't looked in any detail at the convoluted history of the PLC dealings to date in Ireland but I'm fairly sure that they haven't ended up a straightforward mechanism for capturing value for producers more or less in the year of production (in other words vertical integration).

I can see the logic in the Fonterra approach, but NZ really is a stripped down no-added-value producer for the most part. It also has control over local regulation and unlike us the NZ dollar will float freely and help to buffer long term milk price weakness given the relative size of dairy in the economy. For NZ a single farmer owned outlet paying a base price for milk and distributing any added value / market profits via dividends makes some sense.

In Ireland the value we need to add is much more ephemeral, and full of risk. I can't see a single channel approach ever working even if it was wholly farmer owned.

The current lash up with the PLCs was bound to disappoint from day one because the duties of a board are to each and every shareholder qua shareholder, in other words it doesn't matter a jot if 99% or 9% of them are farmers - as a board member I have to act in their interests as a shareholder, not in their interests as a farming shareholder, just as I have for the other 1% or 99% who are fitness instructors or basket weavers.

RightTurnClyde

Cash-strapped Spanish to Receive €300 per Cow - http://t.co/sIfGHjoQ8B
http://t.co/TK9JVLAYxp

rangler1

RightTurnClyde wrote: »

Cash-strapped Spanish to Receive €300 per Cow - http://t.co/sIfGHjoQ8B
http://t.co/TK9JVLAYxp

Irish government can look at the drystock farmers incomes first, they've only been pawned off with rubbish schemes since REPS was closed

Cow Porter

RightTurnClyde wrote: »

Cash-strapped Spanish to Receive €300 per Cow - http://t.co/sIfGHjoQ8B
http://t.co/TK9JVLAYxp

"This coming Friday, talks will take place between France, Italy and Portugal to find common ground to lobby the Council next month."

That part seems worrying for alot of Irish hopefuls ....Wouldn't These countries be fond of " market control measures " similar to the ones gone since April???

RightTurnClyde

Cow Porter wrote: »

"This coming Friday, talks will take place between France, Italy and Portugal to find common ground to lobby the Council next month."

That part seems worrying for alot of Irish hopefuls ....Wouldn't These countries be fond of " market control measures " similar to the ones gone since April???

You'd have to worry about what they're going to come up with on the 7th of September. Ways to keep the inefficient systems on life support. We're only 4 months into a quota free era, but they just can't resist sticking in their oar.

Dawggone

RightTurnClyde wrote: »

You'd have to worry about what they're going to come up with on the 7th of September. Ways to keep the inefficient systems on life support. We're only 4 months into a quota free era, but they just can't resist sticking in their oar.

Don't worry about quotas being reintroduced Clyde.
The best that can happen is a small increase in intervention price.

I can't understand why people on here are so against any state/EU aid. I'll take it anywhere I can get it...just like financial institutions etc...

RightTurnClyde

Dawggone wrote: »

Don't worry about quotas being reintroduced Clyde.
The best that can happen is a small increase in intervention price.

I can't understand why people on here are so against any state/EU aid. I'll take it anywhere I can get it...just like financial institutions etc...

I wouldn't be too worried about the return of quotas, can't see that happening soon. I know what you're saying, but any state aid they come up with would be pan European. It's the usual problem with Europe, one shoe doesn't fit all. With subsidies You'll have the less efficient systems kept on life support, continuing to produce milk, and the more efficient systems getting the signal to drive on and produce higher volumes. If they set intervention at 24 or 26, that will put a floor on prices not just in Europe but will affect prices globally, putting the U.S. or NZ back in the game. All of which is prolonging the pain. Give it 12 or 18 months and let the markets dictate.
Now if the subsitity was for a cull type system like they have in the states, now that I could go for.
Basically any system they come up with should be to take milk out of the system not support below cost production.

frazzledhome

RightTurnClyde wrote: »

I wouldn't be too worried about the return of quotas, can't see that happening soon. I know what you're saying, but any state aid they come up with would be pan European. It's the usual problem with Europe, one shoe doesn't fit all. With subsidies You'll have the less efficient systems kept on life support, continuing to produce milk, and the more efficient systems getting the signal to drive on and produce higher volumes. If they set intervention at 24 or 26, that will put a floor on prices not just in Europe but will affect prices globally, putting the U.S. or NZ back in the game. All of which is prolonging the pain. Give it 12 or 18 months and let the markets dictate.
Now if the subsitity was for a cull type system like they have in the states, now that I could go for.
Basically any system they come up with should be to take milk out of the system not support below cost production.

Post of the thread.

freedominacup

frazzledhome wrote: »

Post of the thread.

I dunno frazz. All going well until the cull subsidy. A subsidy for culling heifer calves and maidens would be something else entirely. No point in subsidising a fella to improve his herd.

rangler1

freedominacup wrote: »

I dunno frazz. All going well until the cull subsidy. A subsidy for culling heifer calves and maidens would be something else entirely. No point in subsidising a fella to improve his herd.

Agreed, hopefully he's talking purchase for destruction type scheme, not a way to flood the good beef market at the moment

Dawggone

RightTurnClyde wrote: »

I wouldn't be too worried about the return of quotas, can't see that happening soon. I know what you're saying, but any state aid they come up with would be pan European. It's the usual problem with Europe, one shoe doesn't fit all. With subsidies You'll have the less efficient systems kept on life support, continuing to produce milk, and the more efficient systems getting the signal to drive on and produce higher volumes. If they set intervention at 24 or 26, that will put a floor on prices not just in Europe but will affect prices globally, putting the U.S. or NZ back in the game. All of which is prolonging the pain. Give it 12 or 18 months and let the markets dictate.
Now if the subsitity was for a cull type system like they have in the states, now that I could go for.
Basically any system they come up with should be to take milk out of the system not support below cost production.

If all things were on a level playing pitch, then fine. But the yanks have a system of "banding", EU has sfp etc etc.
Food is very political...

Compare the fdi in Ireland to the rest of the EU. Google et al are well subsidised to move to Ireland...I just love when people that work in civil service/foreign multinationals come on here giving out about farm subs...

IMO there are very few 'free' markets...
I'll take €'s anywhere I can get them!

frazzledhome

http://www.fedfarm.org.nz/publications/opinion-editorials/article.asp?id=2474#.Vd6WgGe3gFk.twitter

This is what's needed in NZ?

kowtow

Dawggone wrote: »

If all things were on a level playing pitch, then fine. But the yanks have a system of "banding", EU has sfp etc etc.
Food is very political...

Compare the fdi in Ireland to the rest of the EU. Google et al are well subsidised to move to Ireland...I just love when people that work in civil service/foreign multinationals come on here giving out about farm subs...

IMO there are very few 'free' markets...
I'll take €'s anywhere I can get them!

If you're buying a bulk tank make it big, and make sure it has a powerful agitator.

I recall the case of the guy in the (UK) West country who managed to buy bulk powder cheaply out of intervention in the 1970's and chuck it in the tank with a fire-hose of water.

When the co-op came up to congratulate him on his ever increasing yield of all year round milk they discovered that he'd sold the cows nine months earlier and was living in considerable comfort.

pedigree 6

Maybe I'm being a bit naïve here but do dairy processors make more profit during a low milk price to producers. I see glanbia's profits were up for the first half of this year and the share price went up accordingly. I think friesland campina's maybe that's not the right name for them in Holland, their profits are up 70%. I assumed when milk price fell that share price would fall also. It looks like that wag in the IFJ that said to sell the farm now and buy glanbia shares and sell them again in 3 years time could be right. It's no wonder that the processors are still actively looking for all the milk that they can get.

rangler1

pedigree 6 wrote: »

Maybe I'm being a bit naïve here but do dairy processors make more profit during a low milk price to producers. I see glanbia's profits were up for the first half of this year and the share price went up accordingly. I think friesland campina's maybe that's not the right name for them in Holland, their profits are up 70%. I assumed when milk price fell that share price would fall also. It looks like that wag in the IFJ that said to sell the farm now and buy glanbia shares and sell them again in 3 years time could be right. It's no wonder that the processors are still actively looking for all the milk that they can get.

Reducing price will always increase demand

Milked out

pedigree 6 wrote: »

Maybe I'm being a bit naïve here but do dairy processors make more profit during a low milk price to producers. I see glanbia's profits were up for the first half of this year and the share price went up accordingly. I think friesland campina's maybe that's not the right name for them in Holland, their profits are up 70%. I assumed when milk price fell that share price would fall also. It looks like that wag in the IFJ that said to sell the farm now and buy glanbia shares and sell them again in 3 years time could be right. It's no wonder that the processors are still actively looking for all the milk that they can get.

A lot of those profits are down to the weak euro

mf240

Milked out wrote: »

A lot of those profits are down to the weak euro

There paying fcuk all for the milk thats why they are making huge profits..

jaymla627

Milked out wrote: »

A lot of those profits are down to the weak euro

The euro is starting to strengthen again, so where is that going to leave things...hopefully big phil will be kind to us next week

alps

pedigree 6 wrote: »

Maybe I'm being a bit naïve here but do dairy processors make more profit during a low milk price to producers. I see glanbia's profits were up for the first half of this year and the share price went up accordingly. I think friesland campina's maybe that's not the right name for them in Holland, their profits are up 70%. I assumed when milk price fell that share price would fall also. It looks like that wag in the IFJ that said to sell the farm now and buy glanbia shares and sell them again in 3 years time could be right. It's no wonder that the processors are still actively looking for all the milk that they can get.

Very interesting suggestion about rising profits while paying less for milk. However bear in mind that Friesland campina are a coop. They operate by paying a market price for milk. They seem to me to be paying around 3c/l more than DocKaas which is a Dutch coop selling commodity cheese (a highly efficient plant). They then pay a 13th payment based on the profits made during the year. I can't remember the exact split, but the profits are split between the 13th payment, a dividend on the farmers coop bonds, and the balance to the coop for retained earnings or reinvestment.
The beauty is the coop bonds. These are somewhat like our shares, but not shares. Of course shares are a non agricultural asset and our industry has made a complete f*** up linking production to a non agricultural asset.
You must hold a required level of coop bonds in FC relative to the amount of milk you supply, and thus attracts the dividend. Therefore the dividend is relative to the amount of milk you supply. You can buy your bonds over a period of time, but you can be sure you will get there as fast as you can so as to attract the dividend.
This dividend added to your bonds builds a nice tax free fund over the years while you supply milk to the coop. When you finish milking you must sell your bonds back to the coop, but your fund value.ie bonds and dividends over many years can be drawn down like a pension fund with no tax to pay if drawing so much per year.
So not only do the workers have a pension fund...so do the farmers

Look at it overall...between 3 and 6 c ahead of irish coops last year when 13th payment counted in and coop profits payed into your pension fund......
Now what are we at?

frazzledhome

Milked out wrote: »

A lot of those profits are down to the weak euro

If you read Glanbias half year results you'll notice a colum called constant currency where currency changes are accounted for.

The profits you'll see are coming from the nutrition and the medical side with consumer foods doing well for a change. Very little coming from milk the milk processing JV.

Those are the PLC results, btw which is very positive for the co op as its the greatest income stream

Milked out

frazzledhome wrote: »

If you read Glanbias half year results you'll notice a colum called constant currency where currency changes are accounted for.

The profits you'll see are coming from the nutrition and the medical side with consumer foods doing well for a change. Very little coming from milk the milk processing JV.

Those are the PLC results, btw which is very positive for the co op as its the greatest income stream

Don't mean to be overly negative hrre but do u think at some stage in future plc will look to remove itself from milk processing entirely? That's where I would worry with spinouts and coops reducing their shareholding

Sacrolyte

Sacrolyte wrote: »

"And didst thou not kiss me and bid me fetch thee thirty shillings".

.