Going 20% over quota?

delaval

Met a friend in the farm store today and we got to discussing superlevy.

He posed the question, would it be feasable or not to go over quota considering the good milk price?

Have to say he got me thinking as we will average >41c/l this year. Now if milk was 35c next year when we would be paying fine that would be another story altogether.

Would love to hear yere thoughts

bob charles

delaval wrote: »

Met a friend in the farm store today and we got to discussing superlevy.

He posed the question, would it be feasable or not to go over quota considering the good milk price?

Have to say he got me thinking as we will average >41c/l this year. Now if milk was 35c next year when we would be paying fine that would be another story altogether.

Would love to hear yere thoughts

first and foremost what is the fine - xcents per over produced ltr, or % of extra supplied or how is it calculated. Presume around my parts milk supply will be back 15%, thats only a guess, but with the terrible weather it might not be too far off the mark

mf240

What will you have to do, or not do, to produce this extra milk.

It will dilute your fixed cost so that will increase its margin also.

If you are producing it off grass only then surely it's a no brainer.

But be prepared for a superlevy I reckon it's inevitable.

delaval

bob charles wrote: »

first and foremost what is the fine - xcents per over produced ltr, or % of extra supplied or how is it calculated. Presume around my parts milk supply will be back 15%, thats only a guess, but with the terrible weather it might not be too far off the mark

28c/l is the fine for over quota and is paid early next Summer.
Are things that far behind down your area. Is land getting wet again?

bob charles

delaval wrote: »

28c/l is the fine for over quota and is paid early next Summer.
Are things that far behind down your area. Is land getting wet again?

so you have to repay 28cl on the over produced milk, so if you get fined you only receive 13c at the end of the day. Is interest due on the 28c next year. not having a clue on costings but if 13c isnt that far away from your variable costs is a no brainer if there is a relatively good chance of getting away.

Talking to a few lads in the know and we reckon we will only grow 80% at max of normal grass. travel 10miles west of me and things will get real bad very quickly with more rain. My beef cattle arent thriving a jot outside so cows definitely doing. they never reached their peak im told and back around 3l in the parlor each day.

kevthegaff

ireland were 2.6 under the end of June, Take the drought in July and now the heavy rain, i think we should be ok.

Timmaay

Say you have 80ish cows,which would equal 500klitre quota, 20% of that is 100kl, at 28cent superlevy, this works out 28grand of a fine, Given the year we have had, with poor growth,huge meal bills etc, I would not like to be facing a fine of that amount.

Assuming you have the cows sitting there now, what does the alternative, of flog on culls/late calvers low preforming cows etc mean, it would be a tidy extra income, but would it leave you short on numbers next year or more importantly, postquotas in 2015?

Mulumpy

Cut back on cows in spring so am gonna feed cows well for autumn and should come in just on quota. Highly unlikely Arrabawn will be over anyway

kevthegaff

Mulumpy wrote: »

Cut back on cows in spring so am gonna feed cows well for autumn and should come in just on quota. Highly unlikely Arrabawn will be over anyway

Whats Arrabawn at Mulumpy?

mahoney_j

kevthegaff wrote: »

Whats Arrabawn at Mulumpy?

Met Conor the other day and he said supplies were not back as much as we all think in July,and that levy is now a distinct possibility.still the country is over 2,5% under quota according to dept website so there is still a long way to go to claw that back..on going over quota it is only a possibility for guys like de laval who by all accounts rubs a very tight and profitable ship and can produce very high solids milk from grass and minimal meal..anyone that goes over and stays sending in milk on a limb without knowing their costs of production is on a hiding to nothing.there will be a big temptation to milk on this year but after weather woes of last 12 months the last thing most could take is super levy.i am planning on going
10% over based on the fact I am an Arrabawn supplier and am unlikely to be hit with levy,hopefully!!

jomoloney

mahoney_j wrote: »

Met Conor the other day and he said supplies were not back as much as we all think in July,and that levy is now a distinct possibility.still the country is over 2,5% under quota according to dept website so there is still a long way to go to claw that back..on going over quota it is only a possibility for guys like de laval who by all accounts rubs a very tight and profitable ship and can produce very high solids milk from grass and minimal meal..anyone that goes over and stays sending in milk on a limb without knowing their costs of production is on a hiding to nothing.there will be a big temptation to milk on this year but after weather woes of last 12 months the last thing most could take is super levy.i am planning on going
10% over based on the fact I am an Arrabawn supplier and am unlikely to be hit with levy,hopefully!!

there is a 10% surplus of cows in the Arrabawn catchment area

we got badly burned in July yet our supplies were up ,

fodder is scarce and if meal drops in price, I can see a glut of milk in the back end, as folks will be nutting to save fodder

Mulumpy

kevthegaff wrote: »

Whats Arrabawn at Mulumpy?

Be very close to 1% under for July id say

Mulumpy

jomoloney wrote: »

there is a 10% surplus of cows in the Arrabawn catchment area

we got badly burned in July yet our supplies were up ,

fodder is scarce and if meal drops in price, I can see a glut of milk in the back end, as folks will be nutting to save fodder

Supplies are dropping rapidly though with this rain

kevthegaff

wer through the peak months now, we were under 1% for June, Alot of lads around here are down in milk for July, so that bodes well. I wont say what im going over as it will drive lads mad here!

delaval

mahoney_j wrote: »

Met Conor the other day and he said supplies were not back as much as we all think in July,and that levy is now a distinct possibility.still the country is over 2,5% under quota according to dept website so there is still a long way to go to claw that back..on going over quota it is only a possibility for guys like de laval who by all accounts rubs a very tight and profitable ship and can produce very high solids milk from grass and minimal meal..anyone that goes over and stays sending in milk on a limb without knowing their costs of production is on a hiding to nothing.there will be a big temptation to milk on this year but after weather woes of last 12 months the last thing most could take is super levy.i am planning on going
10% over based on the fact I am an Arrabawn supplier and am unlikely to be hit with levy,hopefully!!

I only posed question based on what my mate was saying, as I said he got me thinking
While as MF says fixed costs will be diluted I think there might be a small margin but don't know if it's worth the risk
Then as Bob says with the possibility of a small margin and a chance that there may not be a levy it's hard to know what to do
On the min meal, Mahoney that got shot to shyte with the March and July we got:(:(
The one thing certain is GIIL will be over.

jomoloney

Mulumpy wrote: »

Supplies are dropping rapidly though with this rain

just found out this morn

hadn't been on milking duty for a few days

stanflt

glanbia up 8.9% for july so much for drought

milk dropping in the last 2weeks but last weeks collection up 14% on same week last year as nearly all stock housed across region for same weeks last year

glanbia expecting to go 10% over come end of march due to cow numbers coming in the spring

whelan1

stanflt wrote: »

glanbia up 8.9% for july so much for drought

milk dropping in the last 2weeks but last weeks collection up 14% on same week last year as nearly all stock housed across region for same weeks last year

glanbia expecting to go 10% over come end of march due to cow numbers coming in the spring

ye supplies here well up on july /august last year, am sure there will be a superlevy, wont bother me though:cool:

jersey101

Im 20% under here at the moment but im expecting to be over quota as i have a lot of autumn calvers this year and im goin to be finished my spring calving on the 8 of april. Im screwed

Timmaay

whelan1 wrote: »

ye supplies here well up on july /august last year, am sure there will be a superlevy, wont bother me though:cool:

Anyone know if premier dairys is any different to Glanbia from a quota point of view, or are they all the one now? Supplies well ahead here from last year for may/june/july, have more cows at the minute though, but like you whelan I'm unlikely to go over, unless I buy in afew more cows. I did out a quick excel spreadsheet last week with a prediction of my future supply based on when the cows are calving, it told me that with the 10culls or so that I'll definitely need to flog off, at best I'd come in just under quota, afew more cows will probably repeat, or get mastitis etc.

case885

Timmaay wrote: »

Say you have 80ish cows,which would equal 500klitre quota, 20% of that is 100kl, at 28cent superlevy, this works out 28grand of a fine, Given the year we have had, with poor growth,huge meal bills etc, I would not like to be facing a fine of that amount.

Assuming you have the cows sitting there now, what does the alternative, of flog on culls/late calvers low preforming cows etc mean, it would be a tidy extra income, but would it leave you short on numbers next year or more importantly, postquotas in 2015?

I dont think you would be going far over quota with 500000lts and 80 cows. Kerry is almost 6 % under so that is a help to the rest of the country, dairygold are on quota and glanbia are 1.7% over.

delaval

Timmaay wrote: »

Anyone know if premier dairys is any different to Glanbia from a quota point of view, or are they all the one now? Supplies well ahead here from last year for may/june/july, have more cows at the minute though, but like you whelan I'm unlikely to go over, unless I buy in afew more cows. I did out a quick excel spreadsheet last week with a prediction of my future supply based on when the cows are calving, it told me that with the 10culls or so that I'll definitely need to flog off, at best I'd come in just under quota, afew more cows will probably repeat, or get mastitis etc.

Two seperate quotas, good negociation;););)

stanflt

delaval wrote: »

Two seperate quotas, good negociation;););)

My father fought hard for that deal- most people didn't understand it

Makes things a little easier around here

delaval

stanflt wrote: »

My father fought hard for that deal- most people didn't understand it

Makes things a little easier around here

Those guys in Premier wern't simple. How many times did ye move company and still negociated a great deal for your members

stanflt

delaval wrote: »

Those guys in Premier wern't simple. How many times did ye move company and still negociated a great deal for your members

Mervin dairies
Premier
Waterford
Glanbia


Maybe more

stanflt

Tir Leighin

delaval

stanflt wrote: »

Mervin dairies
Premier
Waterford
Glanbia


Maybe more

And wasn't there a murmer a few years ago of a buy back from Glanbia, that never got going?

whelan1

stanflt wrote: »

My father fought hard for that deal- most people didn't understand it

Makes things a little easier around here

so did mine and a few others on here:rolleyes:

whelan1

delaval wrote: »

Those guys in Premier wern't simple. How many times did ye move company and still negociated a great deal for your members

Anyone remember the palmgrove icreams they made. Freezer here was full of them

dar31

whelan1 wrote: »

so did mine and a few others on here:rolleyes:

mine was too, they must have spent more time at meetings, that they did on the farm, keeping the premier pool separate was a great stroke

dar31

Timmaay wrote: »

Anyone know if premier dairys is any different to Glanbia from a quota point of view, or are they all the one now? Supplies well ahead here from last year for may/june/july, have more cows at the minute though, but like you whelan I'm unlikely to go over, unless I buy in afew more cows. I did out a quick excel spreadsheet last week with a prediction of my future supply based on when the cows are calving, it told me that with the 10culls or so that I'll definitely need to flog off, at best I'd come in just under quota, afew more cows will probably repeat, or get mastitis etc.

some one correct me, but last i heard premier was 1.5% under, the only good thing with premier is there is usually no major pushes in out put due to the nature of contracts and lads locked into set calving patterns, still 1.5 is too close for my liking. wont say too much more as them glanbia lads still get a bit upset when you mention premier quota pool during a superlevy year

Timmaay

Basically dar, likes of me in premier have a lower risk of superlevy fine if I went over quota than other spring milk Glanbia suppliers? Is your quota always the one, say at the minute we have our liquid contract with premier, is the rest of the quota all in premier (having said all this, I probably should be calling my glanbia adviser to get details on all this, its an area I still haven't got my head around fully at all!)

Slightly off topic with this final question, roughly what are liquid contracts worth, say if I decided to go spring milk only? Or is there any value on them at all, seeing as everyone keeps telling us winter milk is a waste of time.

mahoney_j

Timmaay wrote: »

Basically dar, likes of me in premier have a lower risk of superlevy fine if I went over quota than other spring milk Glanbia suppliers? Is your quota always the one, say at the minute we have our liquid contract with premier, is the rest of the quota all in premier (having said all this, I probably should be calling my glanbia adviser to get details on all this, its an area I still haven't got my head around fully at all!)

Slightly off topic with this final question, roughly what are liquid contracts worth, say if I decided to go spring milk only? Or is there any value on them at all, seeing as everyone keeps telling us winter milk is a waste of time.

I'm wondering the same Timmay as I've a bit of interest in getting a liquid contract of some kind,I'm always hearing of guys giving out about winter milk and that there is no money in it and that this is there last year in it but they have all stuck with it which leads me to believe there must be something to be made out of it.

Timmaay

mahoney_j wrote: »

I'm wondering the same Timmay as I've a bit of interest in getting a liquid contract of some kind,I'm always hearing of guys giving out about winter milk and that there is no money in it and that this is there last year in it but they have all stuck with it which leads me to believe there must be something to be made out of it.

I don't know, I'd much rather do without the hassle of two separate breeding and calving seasons, Two farmers in the local discussion group have got out of winter milk over the last few years, and more of us might follow. I had seriously considering getting out for next year (winter 2014), but the main reason I won't now is I couldn't tighten up the calving season enough, I would have ended up culling far too many ladies, then probably have to buy in a big bunch of replacements, and alot of those late ladies I have don't really have any problems other than they happened to come into the system late, as heifers etc.

bob charles

how many cents a ltr are needed to cover fixed costs. this figure will determine if the gamble is worth it. I dont agree that it is diluting fixed. Park fixed cost at your quota maximum and everything after this you can cost at zero fixed costs, no 100% right but how many years of life will producing say 20k gallons of milk knock off. f all

dar31

Timmaay wrote: »

Basically dar, likes of me in premier have a lower risk of superlevy fine if I went over quota than other spring milk Glanbia suppliers? Is your quota always the one, say at the minute we have our liquid contract with premier, is the rest of the quota all in premier (having said all this, I probably should be calling my glanbia adviser to get details on all this, its an area I still haven't got my head around fully at all!)

Slightly off topic with this final question, roughly what are liquid contracts worth, say if I decided to go spring milk only? Or is there any value on them at all, seeing as everyone keeps telling us winter milk is a waste of time.

yea all your quota will be premier.
i think this year liquid is worth €90, and de valued down to €50 in two years time, might be a bit off on the exact figures

whelan1

Timmaay wrote: »

I don't know, I'd much rather do without the hassle of two separate breeding and calving seasons, Two farmers in the local discussion group have got out of winter milk over the last few years, and more of us might follow. I had seriously considering getting out for next year (winter 2014), but the main reason I won't now is I couldn't tighten up the calving season enough, I would have ended up culling far too many ladies, then probably have to buy in a big bunch of replacements, and alot of those late ladies I have don't really have any problems other than they happened to come into the system late, as heifers etc.

i was half thinking of getting out of winter milk too, would love to be on holidays over christmas:D when discussion group where here we had a long talk about it and they advised to tighten up the 2 calving blocks i have and stay with the winter milk for now

delaval

whelan1 wrote: »

i was half thinking of getting out of winter milk too, would love to be on holidays over christmas:D when discussion group where here we had a long talk about it and they advised to tighten up the 2 calving blocks i have and stay with the winter milk for now

Have you a winter or liquid contract?

whelan1

delaval wrote: »

Have you a winter or liquid contract?

liquid- apologies, i meant not milking over the winter

bob charles

surely if you can get a winter milk quota your onto a winner, maintenance cost for one of those big girls cant be far behind a diet for them to produce 30l-40l.

Timmaay

Bob your right in terms of maintenance costs for a 700kg HO is certainly more than a 450-600kg xbred or br fr, but the big problem with a HO knocking out 30/40l is that they will pump out milk no matter what, even at a big expense to theirown bodyfat, so if you don't feed them right (ie spend lots of money) during the winter they will milk their backs off, at least if they are dry they will lose condition much slower because they don't have the negative energy balance of having to pump out 30/40L also. Obviously underfeeding them is not ideal in any scenario, but in years like last year when it was difficult to make good quality silage it can be hard to keep them fed right.

A big reason high output low fertility HOs became popular probably is because of winter milk, and all year around calving, where you can just milk the cow on, even if she only calved every 18months.

Going forward...

For a lad that sings the merits of grazed grass the whole time, a few dry days and you're crying for rain with no grass and cows back in yield and solids.

At least with winter milk you have consistency and remove that risk. Maybe you shouldn't be so hasty to get out of winter milk? Making quality forage is half the battle. I know it's the workload for many but dairy farming is hard work, says so on the back of the ticket.

Timmaay

I have no regrets for basing my farm model as much around grass as possible, I'll trust the teagasc research which stats most of the time it is the most profitable way of producing milk, especially on a dry farm like mine. This summer was one of those one in 20yr summers, on the back of a terrible summer/spring last year all of which left no silage carryover, that was my main frustration, but such is life. The cows back in yeilds and solids was a mistake on my behalf, lesson hopefully learnt, I should have buffer fed actual silage to the cows more instead of leaving them just on strong stemy silage ground. Our liquid quota is only 15% of our current supply and that % will reduce as I expand post 2015, so no matter what, the winter milk is only going to be a small aspect moving forward, yes it might offset the risks of a grass based system slightly, but it's not a good enough tradeoff for the work required in my view. Anyways, what in your opinion do you think I should do so, if this whole teagasc grass model is "wrong", which you appear to be implying? I will hopefully keep on improving the farm, and farm profitability, enough that I can afford to contract out most machinery work, alongside relief milking so as for most of the year I don't need to be a slave to the farm, and can keep it closer to a more normal 50hour week with days off here and there. If that sounds delusional and I don't sound like I'm prepared for the hardship of a life spent dairying then please let me know now!

Mulumpy

Timmaay wrote: »

I have no regrets for basing my farm model as much around grass as possible, I'll trust the teagasc research which stats most of the time it is the most profitable way of producing milk, especially on a dry farm like mine. This summer was one of those one in 20yr summers, on the back of a terrible summer/spring last year all of which left no silage carryover, that was my main frustration, but such is life. The cows back in yeilds and solids was a mistake on my behalf, lesson hopefully learnt, I should have buffer fed actual silage to the cows more instead of leaving them just on strong stemy silage ground. Our liquid quota is only 15% of our current supply and that % will reduce as I expand post 2015, so no matter what, the winter milk is only going to be a small aspect moving forward, yes it might offset the risks of a grass based system slightly, but it's not a good enough tradeoff for the work required in my view. Anyways, what in your opinion do you think I should do so, if this whole teagasc grass model is "wrong", which you appear to be implying? I will hopefully keep on improving the farm, and farm profitability, enough that I can afford to contract out most machinery work, alongside relief milking so as for most of the year I don't need to be a slave to the farm, and can keep it closer to a more normal 50hour week with days off here and there. If that sounds delusional and I don't sound like I'm prepared for the hardship of a life spent dairying then please let me know now!

Timmaay I wouldnt be so hard on yourself. You sound like u are doing a great job. It very easy to think the lad next door is doing the job better but at the end of the day u know whats best for your farm so keep up the good work. Ive no interest in winter milk cos I like my two month break. I could do a lot better to be more efficient on my farm but I only put in 35 hours a week with ofj of 42. Not always happy at it but it works for me and making a few bob at it.

delaval

Mulumpy wrote: »

Timmaay I wouldnt be so hard on yourself. You sound like u are doing a great job. It very easy to think the lad next door is doing the job better but at the end of the day u know whats best for your farm so keep up the good work. Ive no interest in winter milk cos I like my two month break. I could do a lot better to be more efficient on my farm but I only put in 35 hours a week with ofj of 42. Not always happy at it but it works for me and making a few bob at it.

+1

mf240

+2 timmy your doing a good job and as long as your improving a little every year then fair play.

Milking cows 12 months of the year is no joke, and these last 12 have been the toughest ever.

delaval

Timmaay wrote: »

Basically dar, likes of me in premier have a lower risk of superlevy fine if I went over quota than other spring milk Glanbia suppliers? Is your quota always the one, say at the minute we have our liquid contract with premier, is the rest of the quota all in premier (having said all this, I probably should be calling my glanbia adviser to get details on all this, its an area I still haven't got my head around fully at all!)

Slightly off topic with this final question, roughly what are liquid contracts worth, say if I decided to go spring milk only? Or is there any value on them at all, seeing as everyone keeps telling us winter milk is a waste of time.

If ye were always Premier you are still Premier

delaval

I am in Winter milk. I would urge caution regarding liquid milk. Consumer foods are really under pressure and solely because of the Supermarkets and the fact that NI milk gets dumped here. I really do not see future in this business unless there are major changes.

The winter scheme in Glanbia is a different animal as the contract with Baileys is not as volatile.

Too many Liquid suppliers are unconcerned about when a cow calves. Instead it is actually vital to calve at the right time. That is 2 periods of block calving with a minimum calving in the back end as April and May calvers can supply plenty.

The whole solids area has been ignored as they were paid on volume only. This has now changed and I hear some are really paying the price at the moment.

Mahoney, I dont know how it is re. liquid in your co-op but its on shakey ground in Glanbia at the moment

TEAT SQUEEZER

not much of a future in it imo.... gives a lad a home for his later calvers and keeps the seasonality scheme at bay... does something for cashflow in mid winter and eases the spring work pressure somewhat.... that screeching sound u hear is me scraping the barrell .......:o

keep going

going over quota is gambling fullstop- not that i see anything wrong with that it is just that you should provide for the worst and hope for the best.if you are in a high production area its very risky if you are over 72k gallons but if you are under that level i reckon its worth ago but base it on paying superlevy on 20% of production.

Timmaay

Mulumpy wrote: »

Timmaay I wouldnt be so hard on yourself. You sound like u are doing a great job. It very easy to think the lad next door is doing the job better but at the end of the day u know whats best for your farm so keep up the good work. Ive no interest in winter milk cos I like my two month break. I could do a lot better to be more efficient on my farm but I only put in 35 hours a week with ofj of 42. Not always happy at it but it works for me and making a few bob at it.

Ok on reading back on my reply it might have been a little OTT in response to Going forwards criticism, but nay I wouldn't say I'm hard in myself, I just pride myself in making the best business out of what I've been lucky enough to have been given, but still want to have a life outside of it all, if thats a bad thing then so be it . Anyways all wayy off topic from what was about going over quota!