Milk Price- Please read Mod note in post #1

kowtow

Timmaay wrote: »

Also for the small Irish dairy farmer with less than 150 cows, he has a poor economic of scale, little buying power for any concentrates, long grazing seasons means he gets to reduce his silage and slurry requirements which means less diesel needed, alongside lower labour etc etc.

But agreed that we should be slow about boasting about our cheap grass based system, it's not necessary the cheapest gig in town, but for any small enough farmer in Ireland with afew acres around the milking parlour maximising grass and minimising exposure to imported inputs really is their best option.

It's a bit chicken and egg when you look at it in detail. I'm beginning to think that the "sweet spot" farm size thing is actually the single most important issue for Ireland in terms of a competitive future - but it's also the single biggest threat.

It's a threat because it is much easier for the upstream processor to reduce the income of a family farm to zero (put crudely, you are lucky to have a farm so make sure you marry a laying hen) than it is to play hardball with a larger high input unit. The high input unit can be expected to act rationally, and exit when prices are untenable which ironically aligns their interest more closely with those of the milk buyers.

The exact parallel exists with commercial vs residential property borrowing. In every major Western property market (Ireland was I think a limited exception) commercial mortgages are granted without personal guarantees and generally without recourse beyond the single ring-fenced building they relate to. A bank can't bleed a commercial borrower to death because they just get the keys thrown back at them and the borrower walks - therefore the bank works to keep the borrower in business as far as possible and is ready to cut a deal.

The residential borrower on the other hand can be bled indefinitely, squeezed and forced to use other assets & income to support the banks lending on the main house. There is a parallel here with the family farm where the processor is able to transfer risk onto the family farm knowing that he won't throw in the towel even when his income is negative - the danger here is the mis-match between more commerical / rational milk processors & buyers and family farms which have more at stake than pure business.

Blackgrass

Low Euro price has uk feed wheat 16£ ton lower than 6 months back if seasonal fluctuation is ='ed to where it should be if arse didn't fall out of it out.... GRRRRR

Milked out

frazzledhome wrote: »

I'm hearing a lot about how high the cost of grass is, put a figure on it. How much per kgdm?

7.5c/kg? Roughly with a few costs put in for reseeding fert and land at 220/acre and using 12t/ ha grass in the year. Don't measure and could be leaving one or two things out so would that be close to what the rest of ye are at are am I way out

mf240

frazzledhome wrote: »

I'm hearing a lot about how high the cost of grass is, put a figure on it. How much per kgdm?

Around ten grand an acre......

RightTurnClyde

mf240 wrote: »

Around ten grand an acre......

That's the fact of it. Local block of land went for 16k/acre last week ( horsey buyer) . How much does my kgdm cost now.

alps

frazzledhome wrote: »

I'm hearing a lot about how high the cost of grass is, put a figure on it. How much per kgdm?

Grazed grass from rented ground==== 14c/kg DM

frazzledhome

RightTurnClyde wrote: »

That's the fact of it. Local block of land went for 16k/acre last week ( horsey buyer) . How much does my kgdm cost now.

So now the land charge is 10k an acre.

We've guys on here talking about land charges yet I've not seen a price quoted yet

Milked out

RightTurnClyde wrote: »

That's the fact of it. Local block of land went for 16k/acre last week ( horsey buyer) . How much does my kgdm cost now.

If you've bought it It's the cost of interest goes as the land charge as such as the land and it's value is still an asset tgat can be offloaded? If it's paid for then the opportunity cost of renting it is the land charge. Agreed the cost of land is still to high but when will that change and what will cause it to?

Milked out

frazzledhome wrote: »

So now the land charge is 10k an acre.

We've guys on here talking about land charges yet I've not seen a price quoted yet

What do you suggest or use frazz, nobody seems put anything down when reading articles about lads and theit cost of production? Quota was down as a cost but the supposed new quota "land" is hardly mentioned at all. Should it be and if so how. Opportunity cost is thrown around but the tax man doesn't count it

alps

Here`s why;

Grass utilised 10 Tonnes.

Rent Cork 741
Reseed 123
N Fert 395
1 bag 0`s/ac 53
1T Lime/ac 59
Fencing upkeep49

Total 1,420 = 14c/kgDM

I havent put in any infrastructure cost ...just reseed and upkeep

mf240

Ya but are ye buying land so ye can milk cows.

Or are ye milking cows so ye can buy land.

Greengrass1

RightTurnClyde wrote: »

That's the fact of it. Local block of land went for 16k/acre last week ( horsey buyer) . How much does my kgdm cost now.

What about paying 20k an acre and then importing donkeys from Spain to graze it. That's what the lad that bought our place did.

Oh to have that amount of money and not have to care about it

Milked out

mf240 wrote: »

Ya but are ye buying land so ye can milk cows.

Or are ye milking cows so ye can buy land.

Both?

Brown Podzol

alps wrote: »

Here`s why;

Grass utilised 10 Tonnes.

Rent Cork 741
Reseed 123
N Fert 395
1 bag 0`s/ac 53
1T Lime/ac 59
Fencing upkeep49

Total 1,420 = 14c/kgDM

I havent put in any infrastructure cost ...just reseed and upkeep

That sidesteps the ownership/opportunity cost. If you take out the rental cost its 6.5/kg. Surprised it's that low as the teagasc figures are around with a few years and were compiled when fert price was a good bit lower. If you can drive up the tons utilised grass looks very cheap. 4 cows/ha. Does upkeep include spray, mowing etc.?.

kowtow

frazzledhome wrote: »

So now the land charge is 10k an acre.

We've guys on here talking about land charges yet I've not seen a price quoted yet

land charge on owned land should be fair open market rent on a 5 year lease or thereabouts, remembering to take off any interest & repayment costs if already counted somewhere else in your costs.

On actual rented land should be the actual rent.

Nothing complicated about that at 10 tonnes / ha & 300€ acre rent that's just under 7.5c kg/dm off the top of my head. Remember to add the fert, fencing, reseeding, drainage etc. amortised to taste.

kowtow

Brown Podzol wrote: »

That sidesteps the ownership/opportunity cost.

? sidesteps how?

The rent represents is the opportunity cost.

Brown Podzol

kowtow wrote: »

? sidesteps how?

The rent represents is the opportunity cost.

What I meant was it put a figure on the opportunity/ownership cost and we could move on to discuss the cost of grass dm.

alps

Brown Podzol wrote: »

What I meant was it put a figure on the opportunity/ownership cost and we could move on to discuss the cost of grass dm.

Shouldn't remove it as a cost. If you are able to expand on your current platform, you are currently utilising it to its potential and should really do the returns on expansion versus renting out the ground you are not utilising.
If you are currently at 4SR, then any additional milk will come from rented ground or bought in feed.
In all instances you need include the cost of you own asset in a production cost.
It brings huge clarity to your decisions.

trixi2011

Timmaay wrote: »

Hmmm well I'll actually stand my ground on the grass v high cost ha, yes agreed on the surprisingly low cost of some concentrates in the UK system etc, but a hell of a lot of soya needed to balance up the protein, which is imported, and some report afew days ago said the soya harvest looking like it will be lower than expected, which means higher price, grass on the other hand is by far our cheapest form of protein.

Also for the small Irish dairy farmer with less than 150 cows, he has a poor economic of scale, little buying power for any concentrates, long grazing seasons means he gets to reduce his silage and slurry requirements which means less diesel needed, alongside lower labour etc etc.

But agreed that we should be slow about boasting about our cheap grass based system, it's not necessary the cheapest gig in town, but for any small enough farmer in Ireland with afew acres around the milking parlour maximising grass and minimising exposure to imported inputs really is their best option.

Theres plenty of byproducts availible with high protiens in high input systems in the uk super grains can be bought for 30 pound a ton @35/40 % dm 35% protien and 13/14 me . Costs of production can be quite impressive before repayments and in some cases these units can have a lower cop than grass based system but repayment are ussualy alot higher with all the imfrastructue and machinery needed for this type of system .

frazzledhome

alps wrote: »

Here`s why;

Grass utilised 10 Tonnes.

Rent Cork 741
Reseed 123
N Fert 395
1 bag 0`s/ac 53
1T Lime/ac 59
Fencing upkeep49

Total 1,420 = 14c/kgDM

I havent put in any infrastructure cost ...just reseed and upkeep

These are the figures we use per ha
Land 500
Reseed 50
Fert 450

€1000 per ha
10t is 100/tonne
12t is 83/ tonne
14t is 71/tonne

So can we pick a figure and move on?

kevthegaff

frazzledhome wrote: »

These are the figures we use per ha
Land 500
Reseed 50
Fert 450

€1000 per ha
10t is 100/tonne
12t is 83/ tonne
14t is 71/tonne

So can we pick a figure and move on?

How many bags to the acre 10???

frazzledhome

kevthegaff wrote: »

How many bags to the acre 10???

Depends on p&k used

frazzledhome

kevthegaff wrote: »

How many bags to the acre 10???

Depends on p&k used

kowtow

frazzledhome wrote: »

These are the figures we use per ha
Land 500
Reseed 50
Fert 450

€1000 per ha
10t is 100/tonne
12t is 83/ tonne
14t is 71/tonne

So can we pick a figure and move on?

How about 8c / kg on the basis that you could grow more but you could also conceivably pay more rent. Gives a bit of room for a poor utilisation year as well...?

Anyone want to have a stab per kg at (1) putting the kg in the pit (2) putting the kg in a bale (3) bringing in the kg with a zero grazer (4) getting the kg wrapped, tying with ribbon, and drawing it back to the feed passage in the glove compartment of the Bentley.

Brown Podzol

frazzledhome wrote: »

These are the figures we use per ha
Land 500
Reseed 50
Fert 450

€1000 per ha
10t is 100/tonne
12t is 83/ tonne
14t is 71/tonne

So can we pick a figure and move on?

Utilised or grown?

frazzledhome

Brown Podzol wrote: »

Utilised or grown?

Utilised, the only one that counts

Dawggone

My feed costs;
Maize silage €28/ton DM.
Maize crimp €90/ton
Soya crimp €240/ton


Edit. Land charge €132/ha. Price is set by the government...

frazzledhome

Dawggone wrote: »

My feed costs;
Maize silage €28/ton DM.
Maize crimp €90/ton
Soya crimp €240/ton


Edit. Land charge €132/ha. Price is set by the government...

Huge shed stuffed with cows, leased to a horny Irish lad mad for numbers

Timmaay

frazzledhome wrote: »

Huge shed stuffed with cows, leased to a horny Irish lad mad for numbers

Sounds like a dating website profile description!

whelan2

what % of glanbia suppliers have signed the msa? Spoke with a lad this morning who hasnt signed it, said he cant get liquid milk price and cant move to another cremaery, why cant he move?