Milk Price- Please read Mod note in post #1

whelan2

jaymla627 wrote: »

Would reckon it's more a case they're owed a small fortune for feed/fert etc that's climbing every day as suppliers who have probably maxed out credit at independent merchants start doing all their business with glanbia as it's more then likely their only way of accessing supplies , milk flex will help alleviate this somewhat.....
The new scheme is simply to help keep milk supplies up heading into the autumn/winter and stop lads taking drastic actions in selling/culling cows....
Talbot and Bergin never in their worst nightmares thought that heading into a quota free era that they would be faced with the prospect of a stagnet/declining milk pool all their projections going forward are based on us increasing supply year on year and allowing them to cream their 3% margin of the top of a increasing supply meaning more profits/higher share prices and most importantly the ability to pay back debt if 200-300 million litres less milk then they had penciled in where to be supplied in say 2017/2018 it would cause them some serious headaches

I wonder are they allowing for many suppliers leaving when the first msa is up? Have spoken to a few around here who are keeping their options open. Cant see too many new entrants coming in

kevthegaff

whelan2 wrote:

I wonder are they allowing for many suppliers leaving when the first msa is up? Have spoken to a few around here who are keeping their options open. Cant see too many new entrants coming in

I'd say a price increase will happen in 5 years, its a long time tho

greenfield21

The only thing that can save irish dairy is the reintroduction of quotas.

Milked out

greenfield21 wrote: »

The only thing that can save irish dairy is the reintroduction of quotas.

Explain how it will save it

mahoney_j

greenfield21 wrote: »

The only thing that can save irish dairy is the reintroduction of quotas.

????explain ,we had over 30!years of quotas and likes of kiwis etc expanded at will at our expense

Milked out

greenfield21 wrote: »

The only thing that can save irish dairy is the reintroduction of quotas.

Explain how it will save it

Water John

It seems those countries who have always marketed product like WMP and SMP have continued to do so, even extra production. It is those countries making other stuff and who have used WMP and SMP for their surplus eg France that have created the worst problem.
A licience to produce would have limited this surplus. In effect the dumping of France + others have disrupted the product market.
Prices might not have dropped so badly for us if they were not dumping extra production into storage.

Being free to produce what you like, resulting in producing it at a loss, is no freedom at all.

Dawggone

Water John wrote: »

Being free to produce what you like, resulting in producing it at a loss, is no freedom at all.

Free markets....the ultimate freedom.




The French had a nice export market closed off, for political reasons, and taking a long view of the world market, decided that it is fecked for the foreseeable. So, they loaded every bit of surplus into intervention in a kind of extend and pretend...now they are lobbying to shut intervention and reintroduce quotas. You couldn't make it up.

I see that Glanbia are happy to lend ye some of your own money to make sure ye keep producing for new plant that has to be paid for. I'm not afraid to borrow, but borrowing for cash flow in the peak months of milk production sounds like Old Tom is ringing...what will cash flow be like this time next year? Or even 2018?

freedominacup

Water John wrote: »

Being free to produce what you like, resulting in producing it at a loss, is no freedom at all.

it's the epitome of freedom. You pay your money and take your choice.

kowtow

Water John wrote: »

Being free to produce what you like, resulting in producing it at a loss, is no freedom at all.

I haven't checked the small print, and I'm not one for forms, but I think you are free not to produce it as well....

Water John

My point is, we need a mechanism that tempers the extremes of modulation of the price. Its OK if it just touches break even at the bottom of a cycle. But dipping into negative and staying there too long is a disaster recipie.

A license, might dampen these extremes. A licence would require active management by all parties.

Following the trend of the pig industry is not good.

whelan2

Water John wrote: »

My point is, we need a mechanism that tempers the extremes of modulation of the price. Its OK if it just touches break even at the bottom of a cycle. But dipping into negative and staying there too long is a disaster recipie.

A license, might dampen these extremes. A licence would require active management by all parties.

Following the trend of the pig industry is not good.

The main thing sticking out is why does the farmer have to take all the pain? Should there not be redundancies/ pay cuts for those running/working in the co-ops. Its extrememly unfair to the farmer to see basically no cuts being implemented, should their pay be the same at 40cpl as 20cpl?

Milked out

Water John wrote: »

My point is, we need a mechanism that tempers the extremes of modulation of the price. Its OK if it just touches break even at the bottom of a cycle. But dipping into negative and staying there too long is a disaster recipie.

A license, might dampen these extremes. A licence would require active management by all parties.

Following the trend of the pig industry is not good.

But as has been said numerous times restricting us only allows the rest of the world to drive on, while we are held back with added cost and lifting competitors prices

yosemitesam1

Water John wrote: »

It seems those countries who have always marketed product like WMP and SMP have continued to do so, even extra production. It is those countries making other stuff and who have used WMP and SMP for their surplus eg France that have created the worst problem.
A licience to produce would have limited this surplus. In effect the dumping of France + others have disrupted the product market.
Prices might not have dropped so badly for us if they were not dumping extra production into storage.

Being free to produce what you like, resulting in producing it at a loss, is no freedom at all.

Id say Ireland has no business in trying to rely on wmp/smp to make up a large part of sales, there isnt anyway we can compete with any marginal milk from europe or americas unless grain prices rise sharply and there isnt anyway for those to stay high in the long term

Water John

Remember most of the production in many other European countries is not exported to world markets.

Do we want to save and maximise our processors or the maximum number of family farms? That may be the actual choice. Maximum volume of production may not be in farmers interest.

Sadly Sam, some of our lazy management have made that choice already.

kowtow

whelan2 wrote: »

The main thing sticking out is why does the farmer have to take all the pain? Should there not be redundancies/ pay cuts for those running/working in the co-ops. Its extrememly unfair to the farmer to see basically no cuts being implemented, should their pay be the same at 40cpl as 20cpl?

I think that is a very valid issue and one which ought to be / actually is / in the direct control of members, if only they could be bothered to do something about it.

In banking we had coco bonds - maybe co-ops need the same. Basically a portion of every co-op salary (and a big portion of the biggest salaries) is paid in units against a formula which is an amplified version of the milk price. So (for example) let a unit (call it a mooco) be based on the milk price minus, say, 20c as an absolute base. Replace €50,000 euros of each of the top guys salaries with 5,000 moocos. If the milk price is 25c he gets 25k (25-20 x 5,000), if it is 30 he gets 50k (30-20 x 5,000) and so on and so on... less than 20c and he gets nothing.

Perfectly possible for co-op memberships to vote a system like that into existence, it doesn't need the government, or ICSMA, or the IFA, or aunt sally, or anyone else - just an EGM proposal.

It would give producers the confidence they need when it comes to choosing who to supply when their present MSA runs out. If they don't like it, I for one would like to hear co-op management give a detailed explanation of why their interests shouldn't be aligned to producers.

Milked out

kowtow wrote: »

whelan2 wrote: »

The main thing sticking out is why does the farmer have to take all the pain? Should there not be redundancies/ pay cuts for those running/working in the co-ops. Its extrememly unfair to the farmer to see basically no cuts being implemented, should their pay be the same at 40cpl as 20cpl?

I think that is a very valid issue and one which ought to be / actually is / in the direct control of members, if only they could be bothered to do something about it.

In banking we had coco bonds - maybe co-ops need the same. Basically a portion of every co-op salary (and a big portion of the biggest salaries) is paid in units against a formula which is an amplified version of the milk price. So (for example) let a unit (call it a mooco) be based on the milk price minus, say, 20c as an absolute base. Replace 50,000 euros of each of the top guys salaries with 5,000 moocos. If the milk price is 25c he gets 25k (25-20 x 5,000), if it is 30 he gets 50k (30-20 x 5,000) and so on and so on... less than 20c and he gets nothing.

Perfectly possible for co-op memberships to vote a system like that into existence, it doesn't need the government, or ICSMA, or the IFA, or aunt sally, or anyone else - just an EGM proposal.

It would give producers the confidence they need when it comes to choosing who to supply when their present MSA runs out. If they don't like it, I for one would like to hear co-op management give a detailed explanation of why their interests shouldn't be aligned to producers.

A good idea, have u come across anything alongside it where management wouldn't act recklessly to keep their own wage up? As banks did here sending out loans back in tiger times. Pure transparency in everything would be ideal but unlikely

MF290

Water John wrote: »

My point is, we need a mechanism that tempers the extremes of modulation of the price. Its OK if it just touches break even at the bottom of a cycle. But dipping into negative and staying there too long is a disaster recipie.

A license, might dampen these extremes. A licence would require active management by all parties.

Following the trend of the pig industry is not good.

Plenty of very wealthy pig farmers

Water John

Not many wealthy pig farmers, whatever % of the 1,000 that are left you are talking about.

Welcome to the Ireland of 1,000 dairy farmers.

Farmer Ed

Just reading about the glanbia loan scheme.
Am I right in saying it is for a max of 2cl? If that is correct if a supplier could just switch to a better paying co op he'd still have more immediate money in his pocket and not in the form of a loan. Such spin!! How much did the pr people charge to make the propaganda video alone? Disgraceful the way they are trying to pull the wool over farmers eyes! And as for our new minister? same circus just a different clown.

whelan2

Farmer Ed wrote: »

Just reading about the glanbia loan scheme.
Am I right in saying it is for a max of 2cl? If that is correct if a supplier could just switch to a better paying co op he'd still have more immediate money in his pocket and not in the form of a loan. Such spin!! How much did the pr people charge to make the propaganda video alone? Disgraceful the way they are trying to pull the wool over farmers eyes! And as for our new minister? same circus just a different clown.

A supplier cant switch so we are stuck with these schemes until we can

kowtow

Milked out wrote:

A good idea, have u come across anything alongside it where management wouldn't act recklessly to keep their own wage up? As banks did here sending out loans back in tiger times. Pure transparency in everything would be ideal but unlikely

Co co bonds were a specific regulatory response to tiger type lending so they weren't a factor pre about 2010, having not been invented.

Not fully tested yet but in terms of protecting retail banks they probably help... there are a million more ways to be reckless in a bank than a coop though and better ways around mechanisms like cocos... I'd have thought this sort of thing would be very workable in a coop.

I suppose the danger is that they run the coop into the ground by paying too much for milk, or fail to invest enough, but I reckon those are risks worth taking.

Farmer Ed

whelan2 wrote: »

A supplier cant switch so we are stuck with these schemes until we can

That in itself should never have been allowed happen. I warned people on here 3 years ago about the dangers of those contracts and was dismissed by most as a some kind of conspiracy theorist.
Those contracts are a form of entrapment.

Buford T. Justice XIX

kowtow wrote: »

I think that is a very valid issue and one which ought to be / actually is / in the direct control of members, if only they could be bothered to do something about it.

In banking we had coco bonds - maybe co-ops need the same. Basically a portion of every co-op salary (and a big portion of the biggest salaries) is paid in units against a formula which is an amplified version of the milk price. So (for example) let a unit (call it a mooco) be based on the milk price minus, say, 20c as an absolute base. Replace €50,000 euros of each of the top guys salaries with 5,000 moocos. If the milk price is 25c he gets 25k (25-20 x 5,000), if it is 30 he gets 50k (30-20 x 5,000) and so on and so on... less than 20c and he gets nothing.

Perfectly possible for co-op memberships to vote a system like that into existence, it doesn't need the government, or ICSMA, or the IFA, or aunt sally, or anyone else - just an EGM proposal.

It would give producers the confidence they need when it comes to choosing who to supply when their present MSA runs out. If they don't like it, I for one would like to hear co-op management give a detailed explanation of why their interests shouldn't be aligned to producers.

While it's something I'd like to see, I doubt you could place existing workers onto a variable salary without them agreeing.

That means you would be waiting 20 years before it would have a significant benefits.

kevthegaff

rushvalley wrote:

€100 isn't bad when realistically it only cost you the diesel needed for the job unless you had a breakdown.

Farmer Ed wrote:

That in itself should never have been allowed happen. I warned people on here 3 years ago about the dangers of those contracts and was dismissed by most as a some kind of conspiracy theorist. Those contracts are a form of entrapment.

We're u still farmer ed 3 yrs ago?

whelan2

Farmer Ed wrote: »

That in itself should never have been allowed happen. I warned people on here 3 years ago about the dangers of those contracts and was dismissed by most as a some kind of conspiracy theorist.
Those contracts are a form of entrapment.

In fairness at the time of the signing of the MSA milk price was good there was no indication that price would be so low for so long. Also by not signing we would loose out on any bonuses available.

kowtow

Buford T. Justice V wrote:

While it's something I'd like to see, I doubt you could place existing workers onto a variable salary without them agreeing.

Buford T. Justice V wrote:

That means you would be waiting 20 years before it would have a significant benefits.

Quite right. That's why you start with boards and management bonuses... if those can't be changed in short order then we are in real trouble anyway... it shouldn't be seen as a negative, the coops that take it on with gusto would rightly earn a lot of respect and loyalty from their members.

Farmer Ed

whelan2 wrote: »

In fairness at the time of the signing of the MSA milk price was good there was no indication that price would be so low for so long. Also by not signing we would loose out on any bonuses available.

Collectively if farmers had refused to sign they wouldn't have got away with it. Read my posts of 3 years ago. The alarm bells were ringing but the farm organisations insisted they be ignored.

atlantic mist

kowtow coco would align suppliers and management, hard to implement at present but if talk of merging coops i think it should be on the table, would quietly put a stop to merger talks:)


link basic salary to base milk price and bonuses split on a range of metrics such as profitability,stock turnover, innovate product development, debt paid down, return on investment & capital employed & EVA...be a revolutionary salary package

RightTurnClyde

Ah lads, all of these ideas assume the coops have our best interests at heart. More complicated pay schemes, for management and staff this time, that can be manipulated and twisted and in the end we'll be no better off.
If they had the best interest of the farmers at their core and were confident of their efforts, all they have to do is give the suppliers the option to clear their trading account and the MSA becomes null and void . Job done. And let suppliers supply any processor the following day.
All could be done in 24 hrs and farmers benefiting from it a day later. All they'd have to focus on then is paying the farmer the best price possible, with no place to hide

Edit. It would do away with all this discontent, and allow farmers and coops to put their money where their mouth is.