Milk Price- Please read Mod note in post #1

blue5000

jack o shea wrote: »

Anyone else thinking of going OAD milking when the hour changes? Finding it hard to think of milking and it dark and cold at half 5 next week and pricks like that bergin lad laughing at us, with the ridiculous price glanbia are paying us we may as well be in at the fire with the feet up and go broke as be out in the ****e and still end up broke.

Jack are you thinking of leaving the calves on them next year?

atlantic mist

whelan2 wrote: »

Are there any other meetings planned?

where did they hold the meeting?

what was discussed?

rangler1

whelan2 wrote: »

Are there any other meetings planned?

Meetings won't achieve anything, last year at our beef meetings the processors stopped sending representatives to become cannon fodder for the night. Milk processors would probably do the same, you'll only end up talking among themselves.

whelan2

atlantic mist wrote: »

where did they hold the meeting?

what was discussed?

Navan. I was at it if you look back a few pages there's a few posts on it. Bergin, Henry corbally , Jim gilsenan and Denis o Sullivan at top table

frazzledhome

whelan2 wrote: »

Navan. I was at it if you look back a few pages there's a few posts on it. Bergin, Henry corbally , Jim gilsenan and Denis o Sullivan at top table

Was it an Ifa meeting or a Glanbia regional meeting?

whelan2

frazzledhome wrote: »

Was it an Ifa meeting or a Glanbia regional meeting?

Got 2 texts about meeting both from ifa. There was a good few from glanbia there- local milk advisor etc

kowtow

Does anyone have a GIIL MSA to hand and if so what does it say about providing access to the milk lorry?

I suspect it requires the farmer to "make reasonable efforts" to ensure the milk lorry can access the farm to collect milk, or alternatively that the farmer must provide access to the milk lorry at "all reasonable times"...

Would be interested to hear.

wats the craic

kowtow wrote: »

Does anyone have a GIIL MSA to hand and if so what does it say about providing access to the milk lorry?

I suspect it requires the farmer to "make reasonable efforts" to ensure the milk lorry can access the farm to collect milk, or alternatively that the farmer must provide access to the milk lorry at "all reasonable times"...

Would be interested to hear.

why you going fill in the enterance to your farm , be interesting to see wat they would do

tanko

Correct me if I'm wrong but as far as I know farmers in my area who haven't signed the supply agreement are still getting their milk collected by Glanbia?

wats the craic

tanko wrote: »

Correct me if I'm wrong but as far as I know farmers in my area who haven't signed the supply agreement are still getting their milk collected by Glanbia?

as long as you are a shareholder they have to collect your milk

alps

"Nestlé, in its nine-month sales update, reported solid growth of 4.2%. Two per cent related to volume growth, with 2.2% coming from price increases." Report from FJ.

Nice if you could increase output by 2% and get a 2.2% price increase. Looks like the far end of our food chain is still tipping along nicely. .....

trixi2011

alps wrote: »

"Nestlé, in its nine-month sales update, reported solid growth of 4.2%. Two per cent related to volume growth, with 2.2% coming from price increases." Report from FJ.

Nice if you could increase output by 2% and get a 2.2% price increase. Looks like the far end of our food chain is still tipping along nicely. .....

Who supplies nestle in Ireland ? they are paying well in the uk through first milk 27p base price

frazzledhome

trixi2011 wrote: »

Who supplies nestle in Ireland ? they are paying well in the uk through first milk 27p base price

Was on 3 First Milk farms last week all getting 18p. Are First Milk assembling milk for Nestle?

Brown Podzol

alps wrote: »

"Nestlé, in its nine-month sales update, reported solid growth of 4.2%. Two per cent related to volume growth, with 2.2% coming from price increases." Report from FJ.

Nice if you could increase output by 2% and get a 2.2% price increase. Looks like the far end of our food chain is still tipping along nicely. .....

Danone likewise. 3.7% growth in sales and 7.2% in price. No mention in either of lower cost of raw material, milk. The answer to low milk price, buy shares in both.

trixi2011

frazzledhome wrote: »

Was on 3 First Milk farms last week all getting 18p. Are First Milk assembling milk for Nestle?

Im not fully sure how it works but certin first milk farmers were given nestle contracts and there milk is sent for processing by nestle there base price was set last spring at 27p and this price will be left untouched untill dec this year afaik . There s not that many nestle contracts and farms location seems to be impirtant to be awarded one

Sam Kade

jack o shea wrote: »

Anyone else thinking of going OAD milking when the hour changes? Finding it hard to think of milking and it dark and cold at half 5 next week and pricks like that bergin lad laughing at us, with the ridiculous price glanbia are paying us we may as well be in at the fire with the feet up and go broke as be out in the ****e and still end up broke.

Get up earlier I'd have them milked in the morning before daylight ( before the time changed)

milkprofit

Brown Podzol wrote: »

Danone likewise. 3.7% growth in sales and 7.2% in price. No mention in either of lower cost of raw material, milk. The answer to low milk price, buy shares in both.

they got 7.2 %increase in sales and we told markets were diving

alps

Brown Podzol wrote: »

Danone likewise. 3.7% growth in sales and 7.2% in price. No mention in either of lower cost of raw material, milk. The answer to low milk price, buy shares in both.

Just wondering if you have the time to do a bit of mathematics. ..

If a supplier was to use the dividend and capital growth of Nestlé or Danone shares as a hedge against say 5c/l of his output...what value of shares should he buy?

For instance a supplier with 500,000l, would need €25,000 from div and CA to give him the 5c/l...
I'm only suggesting 5c as this is the mid point of the last 2 volatile swings in price. ...

kowtow

alps wrote: »

If a supplier was to use the dividend and capital growth of Nestlé or Danone shares as a hedge against say 5c/l of his output...what value of shares should he buy?

Dangerous route because the multiple applied by the market to these companies is strongly tied to external factors - market risk generally.

If all shares were to fall by 20% from today's prices you'd have a mess for a hedge, and you'd need to be buying quite a big clip to hedge 20% of your income...

blackdog1

trixi2011 wrote: »

Im not fully sure how it works but certin first milk farmers were given nestle contracts and there milk is sent for processing by nestle there base price was set last spring at 27p and this price will be left untouched untill dec this year afaik . There s not that many nestle contracts and farms location seems to be impirtant to be awarded one

This is interesting. In dairygold their is a list of farmers given to each bulk tank driver and anyone on that list milk goes to baby powder as it's top quality. Ive been on this list for a few years( not bragging) but I get no bonus for this other than usual quality milk etc. Think lactose has a big factor in choosing this milk. I think it's a shame if you work hard to produce quality milk for a high end product that you get the same price as someone who doesn't put in the same effort. I would also like my co-op to tell us what type of milk they want so they can sell it at a premium price . I'm sick of teagasc doing this instead of ppl who are paying me. Low cost system is great but if it doesn't produce the lactose level required for premium products?? I could be totally wrong but I would like my co-op to be more proactive in this area.

Brown Podzol

kowtow wrote: »

Dangerous route because the multiple applied by the market to these companies is strongly tied to external factors - market risk generally.

If all shares were to fall by 20% from today's prices you'd have a mess for a hedge, and you'd need to be buying quite a big clip to hedge 20% of your income...

So if the price of Irish land bears no correlation to its earning capacity then the same goes for almost every other asset.

alps

kowtow wrote: »

Dangerous route because the multiple applied by the market to these companies is strongly tied to external factors - market risk generally.

If all shares were to fall by 20% from today's prices you'd have a mess for a hedge, and you'd need to be buying quite a big clip to hedge 20% of your income...

If we the raw material supplier are getting less, and the consumer at the far end is paying more for the finished product......who in the middle is making the extra profit.?

Is there any way of accessing this middle profit? (Other than becoming the middle man?)

kowtow

alps wrote: »

Is there any way of accessing this middle profit? (Other than becoming the middle man?)

Technically speaking yes (probably) but in an attempt to eliminate basis risk you would pay so many transaction costs as to guarantee a loss!

Basis risk is the danger of hedging one thing with something which turns out not to be a perfect hedge - shares of Nestle for example which may be subject to all kinds of external factors (eg. the CFO turns out to have committed a massive accounting fraud, shares crash, notwithstanding the price of milk - or a factory burns down, or whatever).

You can theoretically eliminate many of these factors. Buy the shares of their competitors to balance out their poor management, buy interest rate futures or the VIX or short the market as a whole to cancel out market wide movements, etc. etc. etc. ad infinitum... but by the time you did so the transaction costs of all the different legs of the hedge would certainly add up, giving you a guaranteed loss in any event!

The real problem is that it's their income you are after rather than capital growth.

Becoming the middle man probably the best bet... or arguably buying baskets of investment funds in the countries they supply.. assuming they are relying on generic consumption growth in those markets.

Personally I think these numbers are pretty weak. No one is going to get rich in developing markets on sub 10% growth, gross of inflation, particularly if those price inflation figures include the effect of a weaker euro.

kowtow

Brown Podzol wrote: »

So if the price of Irish land bears no correlation to its earning capacity then the same goes for almost every other asset.

haha.. yes.

money is cheap at the moment so everything you can buy with it is expensive, especially if you can dump it in 12 milliseconds.

rangler1

blackdog1 wrote: »

This is interesting. In dairygold their is a list of farmers given to each bulk tank driver and anyone on that list milk goes to baby powder as it's top quality. Ive been on this list for a few years( not bragging) but I get no bonus for this other than usual quality milk etc. Think lactose has a big factor in choosing this milk. I think it's a shame if you work hard to produce quality milk for a high end product that you get the same price as someone who doesn't put in the same effort. I would also like my co-op to tell us what type of milk they want so they can sell it at a premium price . I'm sick of teagasc doing this instead of ppl who are paying me. Low cost system is great but if it doesn't produce the lactose level required for premium products?? I could be totally wrong but I would like my co-op to be more proactive in this area.

They're probably getting enough suitable milk to satisfy the orders for baby milk and if they did offer a bonus for it, they mightn't get a premium price for all the dearer milk supplied

kowtow

Mixed picture from the journal on Chinese infant formula:

China’s domestic manufacturers of infant formula are all showing a big fall in sales.
Beingmate, the company that Fonterra purchased an 18.8% stake in for ¥3.46bn (€484.4m) earlier this year saw half year revenues fall by 26.3% to ¥1.77bn (€248m).

Hong Kong-listed company Biostime had a drop in revenue of 10% to ¥1.96bn (€274.4m) for the same period.

Ming Chou, analyst at China Mahon Investment Management, blamed massive increases in production coupled with lower than expected birth rates for the decline in infant formula sales. He also said the government breast feeding campaign is taking its toll.

According to Chou, Beingmate’s dismal performance was exacerbated by internal problems. The company abandoned its distribution channel of third-party wholesalers in order to build its own sellers. Last month media reported Beingmate closed up to 500 of these shops because of flagging sales and high costs.

Fonterra planned to increase sales for the company, but held back because of reported internal disagreement on the strategy.

Increase in imports

However, sales volumes of imported formula in China increased by 28% to 89,000t for the first seven months of this year.

This is due to greater sales from Ireland and the Netherlands, which account for 50% of all infant formula imports. There were also gains for Germany and South Korea, according to the China’s latest customs data.

WheatenBriar

There was a piece on drivetime on radio one with john comer of the Icmsa talking about farmer anger with glanbia breaking all its promises and currently paying the lowest base price in the country

pedigree 6

http://www.rte.ie/radio/utils/radioplayer/rteradioweb.html#!rii=9%3A20870758%3A0%3A%3A
There you go.:)

kowtow

There's an article in the journal tomorrow by Joe Collins at ornua detailing their approach to dairy volatility.

Some interesting snippets in it including their having bought at fixed prices off 5 co op's. .

He's crowing that their trading strategy has kept the ppi in a much more stable range than gdt.

I've no reason to dispute what he says but theres something in the tone which makes me wonder if Ornua wants to roll up the co-ops and become the Irish Fonterra.

atlantic mist

internal disagreement on strategy:)
they were told what the strategy is, its china
are kerry still tied in with that beingmate?

the way to access the middle profit is to try and reduce the supply chain, going direct to market/consumer as possible, depends on if we have retailers ringing us for product or are we making a batch and going how and where do we sell this?

need branded products to be able to achieve this, in our case ornua do this by taking the branded products they have directly to market across the world, they buy from our processors, market sell and return a dividend to processors which returns some of the middle profit, or should do in the ideal world never seen a bonus for this must have went in the honey pot