Milk Price- Please read Mod note in post #1

whelan2

Timmaay wrote: »

Obviously rubbish. The casualties will be the people who either fail to adapter to change, or the ones who lapped up every single Chinese boom story/white gold etc and have gone utterly wild on expansion based on an unrealistic average milk price in the mid 30s etc.

Wonder what milk price banks were working off for these loans?

Keepgrowing

Dawggone wrote: »

Great to finally see some reality and honesty on here...shame that 14cpl lotto gift from Brussels gets the discussion going.

I've a feeling that it won't be offered in Ireland. We'll see...










By the way, bonus points for anyone if you can realistically explain why you deserve 14cpl for 'scratchin da rollers'...

'Cos I'm worth it

The reality is that the Dept are caught in the headlights here and don't know whom or how this will administer this

whelan2

Keepgrowing wrote: »

While I won't challenge your choice not to go interest only I don't entirely agree. If one has gotten the basics right and have borrowed for the correct investments in your business I'd see no reason not to go this route.

This period is about survival not profit. The cardinal rule is that a business doesn't have to make a profit every year. This however is cold comfort if your repayments are incorrectly structured. If the farm bills can't be paid or worse still the household ex's can't be met then I think all avenues need exploration.

I really don't think the full extent of the low price has hit at farm level yet. The real pinch will be when contractors, merchants and more scarily Mr Revenue call.

Sit down and itemise all creditors. Restructure borrowings and if possible go interest only as all your doing is paying a fee not to free up cash. So what if a loan takes a few years longer to pay, the bank don't actually care so you shouldn't.

Identify all passengers and any surplus stock. Plan to liquidate before everyone else who hasn't done this exercise does. These guys will be price takers as they'll have to sell regardless thus forcing prices even lower.

My tuppence

Once people realise there is a problem , do something about it and let the bank know .As I have said before write down every month what is owed , what you can pay .....

Dawggone

Keepgrowing wrote: »

Not too many agree with you from what I'm reading on here. Most seem to think that the business' that borrowed to expand will be the first casualties along with the poor old new entrants.

Expand cows and expanding acres are not necessarily the same thing.

There's a certain train of thought on here (dairy farmers) that reckon there is no other way to farm , only dairy...even though they readily question their Coop's product *mix*!
Many leading farms have several income streams.
Spoke ad nauseam about this 3yrs ago...one trick pony...etc etc.

6270red

Down around west cork the last few days and while driving around the OH was surprised by the number of 60-70 cow men/ women here.
We concluded that it's sustainable for them because the west cork co-ops make it so.
They also seem to be top grass men all the paddocks the cows were grazing were bang on targets. Cows are in excellent Nick too. Land is all on the side of a hill it seems!!
The coops have a lot to do with other parts of the country playing the numbers game.
Off topic but said I'd share an observation

6270red

Dawggone wrote: »

Expand cows and expanding acres are not necessarily the same thing.

There's a certain train of thought on here (dairy farmers) that reckon there is no other way to farm , only dairy...even though they readily question their Coop's product *mix*!
Many leading farms have several income streams.
Spoke ad nauseam about this 3yrs ago...one trick pony...etc etc.

The man who is an average poor farmer won't make money by expanding numbers, no matter how many he has.
The better lads will always be tipping away! If your good at something concentrate on it. And be better!

kevthegaff

Keepgrowing wrote:

This period is about survival not profit. The cardinal rule is that a business doesn't have to make a profit every year. This however is cold comfort if your repayments are incorrectly structured. If the farm bills can't be paid or worse still the household ex's can't be met then I think all avenues need exploration.

Keepgrowing wrote:

I really don't think the full extent of the low price has hit at farm level yet. The real pinch will be when contractors, merchants and more scarily Mr Revenue call.

Keepgrowing wrote:

Sit down and itemise all creditors. Restructure borrowings and if possible go interest only as all your doing is paying a fee to free up cash. So what if a loan takes a few years longer to pay, the bank don't actually care so you shouldn't.

Keepgrowing wrote:

Identify all passengers and any surplus stock. Plan to liquidate before everyone else who hasn't done this exercise does. These guys will be price takers as they'll have to sell regardless thus forcing prices even lower.

Very good points!

Timmaay

6270red wrote: »

Down around west cork the last few days and while driving around the OH was surprised by the number of 60-70 cow men/ women here.
We concluded that it's sustainable for them because the west cork co-ops make it so.
They also seem to be top grass men all the paddocks the cows were grazing were bang on targets. Cows are in excellent Nick too. Land is all on the side of a hill it seems!!
The coops have a lot to do with other parts of the country playing the numbers game.
Off topic but said I'd share an observation

What do you think their cost of production is in a year like this, where they are forced to cut right back to the bone? Can the best of farmers with very low borrowings, on the best of land drop down to the likes of 17c/l costs (before wages etc, and obviously not including any sort of land charge before we start that debate again lol)

mf240

Dawggone wrote: »

Great to finally see some reality and honesty on here...shame that 14cpl lotto gift from Brussels gets the discussion going.

I've a feeling that it won't be offered in Ireland. We'll see...










By the way, bonus points for anyone if you can realistically explain why you deserve 14cpl for 'scratchin da rollers'...

Don't need to explain it just need to make sure to get it.

I've learned over the years that principles are an expensive luxury.
.

Dawggone

whelan2 wrote: »

Define scale

Non linear Whelan.

More about the number of arrows in your quiver...and the size of the quiver plus the number of arrows!

Timmaay

whelan2 wrote: »

Wonder what milk price banks were working off for these loans?

All I know is I went down to my local bank back when the Base price was 39c/l with what on hindsight was the most diabolic shambles of a 10yr business plan to buy 50acres beside me, my "worst case scenario" milk price was 32c/l. The branch agri "expert" said that seemed reasonable. I was bloody lucky before I could get much further with them someone else jumped in and snapped up the land to put me outa my misery lol!

6270red

Timmaay wrote: »

What do you think their cost of production is in a year like this, where they are forced to cut right back to the bone? Can the best of farmers with very low borrowings, on the best of land drop down to the likes of 17c/l costs (before wages etc, and obviously not including any sort of land charge before we start that debate again lol)

No idea what their cost of production is, was only looking out the window of the car! But I do know that the milk price they have got this year would make them in and around €10- €20,000 more profitable then me this year. They also look to be better at managing grass then me!!!

kevthegaff

I question is this the future, when the word "survival" is used in every sector of farming constantly. I can see this country a little like France in the last decades, young people leaving for the city, government subsidising the few existing young ones left, and as dawg says sadly get big or get out. I reckon our generation are in no man's land while the next if wanting, will avail of cheep land, subs and less competition and perhaps more demand

whelan2

Timmaay wrote: »

All I know is I went down to my local bank back when the Base price was 39c/l with what on hindsight was the most diabolic shambles of a 10yr business plan to buy 50acres beside me, my "worst case scenario" milk price was 32c/l. The branch agri "expert" said that seemed reasonable. I was bloody lucky before I could get much further with them someone else jumped in and snapped up the land to put me outa my misery lol!

Count my blessings every day that 30 acres right beside me I was the highest bidder on fell through

Dawggone

6270red wrote: »

Scale = good farmer that doesn't get carried away, is able to make a comfortable living for themselves. This is not defined by numbers!

Rubbish.

During the good times (quota years) I'd a elderly neighbor that said "hold onto the cows tail and she'll drag you through the shyte"...the literal may now be true...


Has anyone taken stock of the fact that it just *might* be possible that dairy may be the absolute bottom of the pile as regards income??


Tout est possible.

Farmer Ed

Word from some of the lads that attended the Arrabawn meeting in Mallow last night. The positive news is that management believe this has bottomed out and we could be seeing the start of a recovery. Also the advise to farmers re the proposed EU scheme to cut production was that it would be a no brainer for anyone lucky enough to be accepted in to the scheme not to avail of it. Must say I have to admire their honesty in giving that advise.

6270red

kevthegaff wrote: »

I question is this the future, when the word "survival" is used in every sector of farming constantly. I can see this country a little like France in the last decades, young people leaving for the city, government subsidising the few existing young ones left, and as dawg says sadly get big or get out. I reckon our generation are in no man's land while the next if wanting, will avail of cheep land, subs and less competition and perhaps more demand

That's the beauty of not having a time machine! There is plenty of lads in the next generation waiting to carry on the farm.
Good friend of mine is an accountant with a big firm of agri accountants, he is of the opinion that the big lads are in more trouble then the smaller guys.
Not my opinion by the way.

Keepgrowing

whelan2 wrote: »

Count my blessings every day that 30 acres right beside me I was the highest bidder on fell through

That would kill me !

Timmaay

kevthegaff wrote: »

I question is this the future, when the word "survival" is used in every sector of farming constantly. I can see this country a little like France in the last decades, young people leaving for the city, government subsidising the few existing young ones left, and as dawg says sadly get big or get out. I reckon our generation are in no man's land while the next if wanting, will avail of cheep land, subs and less competition and perhaps more demand

I think your being too harsh including yourself in this current "no man's land" generation. You took over your dad's farm didn't you?, ya built up a good herd of cows and kept expenditure low in terms of the cheap milking parlour, old tractors etc. The lads who could be in no man's land are the ones who paid big money for land, big capital spending based on whatever being fit to last a lifetime etc. This "cheap land, less competition" etc etc you talk about will only come if the likes of them can't meet repayments and are forced to sell up.

Personal I do think land prices are due a correction, and will drop back towards the likes of 6k/acre, I've 3 reasons for this prediction:
1)Dairying has obviously stopped driving the price of land
2) The traditional trick up a farmers sleave of selling afew sites isn't nearly as favourable anymore, sites locally use to make 150k, nowadays they are only worth 75k, and there are no end of them for sale but not selling.
3) The poor tillage prices will increase the incentive for dairyfarmers to expand via bought in maize, wholecrop, beet etc against paying big money to buy land, this is a route I've been going further and further down lately, I can expand by another 50cows (which is about 55%) on the same milking block but with alot more bought in fodder.

6270red

Dawggone wrote: »

Rubbish.

During the good times (quota years) I'd a elderly neighbor that said "hold onto the cows tail and she'll drag you through the shyte"...the literal may now be true...


Has anyone taken stock of the fact that it just *might* be possible that dairy may be the absolute bottom of the pile as regards income??


Tout est possible.

Possible yes, but if you really believe it you'd want to be getting the fcuk out!! It'll all level out in the end, always does.
My old lad was a top class farmer and was restricted by quotas, so not everyone of that time has that opinion.

mf240

Keepgrowing wrote: »

That would kill me !

Don't think anyone has died from being unable to buy a bit of land beside them.

Dawggone

mf240 wrote: »

Don't need to explain it just need to make sure to get it.

I've learned over the years that principles are an expensive luxury.
.

I can't agree.

"A people that value it's privileges over its principles soon loses both".




The sooner that the risen Christ that is dairy is treated as the equal of other farming enterprises the better!

By the way, I'm a dairy farmer amongst other things but the absolute favoritism of dairy needs to stop. Now!

boggerman1

alps wrote: »

What's your current price boggerman? Bit to weigh up here. Are you contracted to supply milk in December if you sign up? Does it remove your choice of drying off early if weather/feed availability or even the price of the rest of your milk dictates?
Would it mean you could not sign up to taking 14c/l for reducing supply?
Or could the offer of this fixed option be to offset other offerings now available?

It is short term and you should be set to benefit over the higher supply months of July to October...

Got 23.4 for june milk.as far as I know u don't have to milk everything in sight up to end December.have to find out more about it

Dawggone

6270red wrote: »

Possible yes, but if you really believe it you'd want to be getting the fcuk out!! It'll all level out in the end, always does.
My old lad was a top class farmer and was restricted by quotas, so not everyone of that time has that opinion.

You makin' easy dollar now?
If possible ask Dad.

Waffletraktor

Dawggone wrote: »

I can't agree.

"A people that value it's privileges over its principles soon loses both".




The sooner that the risen Christ that is dairy is treated as the equal of other farming enterprises the better!

By the way, I'm a dairy farmer amongst other things but the absolute favoritism of dairy needs to stop. Now!

I remember in 2014 when all the chatter was flying high of boom times to come, its clear quota has dulled the senses and protected plenty from themselves. The question is who needs to fail or will controls be brought back in. Producing bottom end output is a waste of time in western europe, our costs are too high.

Dawggone

Waffletraktor wrote: »

I remember in 2014 when all the chatter was flying high of boom times to come, its clear quota has dulled the senses and protected plenty from themselves. The question is who needs to fail or will controls be brought back in. Producing bottom end output is a waste of time in western europe, our costs are too high.

+1.

Nail. On. The. Head.

Buford T. Justice XIX

Dawggone wrote: »

Expand cows and expanding acres are not necessarily the same thing.

There's a certain train of thought on here (dairy farmers) that reckon there is no other way to farm , only dairy...even though they readily question their Coop's product *mix*!
Many leading farms have several income streams.
Spoke ad nauseam about this 3yrs ago...one trick pony...etc etc.

I have a handful of sheep, early lambers, and every discussion group meeting was 'get rid of the sheep'. They are my safety net, both financially and mentally. They saved my ass with cash flow/profit twice last year while I was locked up. Not to mention the lift they give me in spring watching the lambs running having fun in the fields.

As for plan B, a bit like Whelan2, I'm paying down debt and improving efficiency. Only 2 loans left now, 1 finishing next year which will open up an opportunity to reinvest again, housing, storage and land improvement top the list. I will probably start a small beef sideline heifers/bullocks maybe once I can get wintering sorted for them and improved grassland for them. Ultimately building stock numbers for dairy expansion I suppose, it's still the best option for 2 incomes on farm here.

alps

Look....

All this negativity towards dairy farmers getting a leg up has to stop....

We all know that dairy farmers work harder, work longer, work smarter. They contribute much more to the national economy. They are better farmers, technically aware better looking and pull hotter babe's.

Bad dairy farmers are as scarce as a cork man with an inferiority complex...

Buford T. Justice XIX

Dawggone wrote: »

I can't agree.

"A people that value it's privileges over its principles soon loses both".




The sooner that the risen Christ that is dairy is treated as the equal of other farming enterprises the better!

By the way, I'm a dairy farmer amongst other things but the absolute favoritism of dairy needs to stop. Now!

That's gas, Dawggone, coming from a farmer in a country that has some of the highest protectionism of its farmers at the expense of other countries in the 'single market' :pac:

Dawggone

Buford T. Justice V wrote: »

I have a handful of sheep, early lambers, and every discussion group meeting was 'get rid of the sheep'. They are my safety net, both financially and mentally. They saved my ass with cash flow/profit twice last year while I was locked up. Not to mention the lift they give me in spring watching the lambs running having fun in the fields.

As for plan B, a bit like Whelan2, I'm paying down debt and improving efficiency. Only 2 loans left now, 1 finishing next year which will open up an opportunity to reinvest again, housing, storage and land improvement top the list. I will probably start a small beef sideline heifers/bullocks maybe once I can get wintering sorted for them and improved grassland for them. Ultimately building stock numbers for dairy expansion I suppose, it's still the best option for 2 incomes on farm here.

+1.
What you're saying is that the gospel according to dairy may be a fabrication by hubris/vested interests...


Not putting words in your mouth Sheriff but the guaranteed/winning/fail safe of dairy may, possibly, be without any foundation whatsoever other than spin to a gullible audience...


Then again Brussels are still throwing money at the privileged, if not principled (:)) few...