Dairy Chit Chat- Please read Mod note in post #1

Dawggone

kowtow wrote: »

I think there may be a realisation dawning in NZ that history did not begin in 2004 ... and that the market conditions which existed before then could well return.

Had a long talk with someone whose operations are tied closely to the oil exploration industry the other night and he was reluctantly dealing with the same possibility.

Thanks Kowtow.
I was home last week and I had a good chat with my father about just that.
He went back to the '30's and remembered that the War was what lifted prices only for them to crash again in the late 50's/early 60's. Then the days of hubris in the 70's which caused hardship in the 80's and 90's. He reckoned that the end of the Cold War and the rise of the Asian economies lifted demand again with the Chinese boom driving commodities stratospheric...until now.
I really hope he is way off target on this, but I still listen to his counsel because he has many miles on the clock...



I'd better not post his thinking on dairying for the near/medium future...

RightTurnClyde

Dawggone wrote: »

I'd better not post his thinking on dairying for the near/medium future...

Go on fire away. If it's not what we want to hear, we can dismiss it as arm-chair analysis

Dawggone

RightTurnClyde wrote: »

Go on fire away. If it's not what we want to hear, we can dismiss it as arm-chair analysis

Tbf it's to do with all farm products/systems...
If we are facing into a protracted period of low product prices,as can happen, he thinks that dairy are by far the least prepared and the most indebted. This is already evident with dairy farmers now the slowest to pay down merchant debt...
An Foras Talúntais, were the cheerleaders of the hubris in the 70's....

Btw, his words NOT mine.

kowtow

Dawggone wrote: »

Thanks Kowtow.
I was home last week and I had a good chat with my father about just that.
He went back to the '30's and remembered that the War was what lifted prices only for them to crash again in the late 50's/early 60's. Then the days of hubris in the 70's which caused hardship in the 80's and 90's. He reckoned that the end of the Cold War and the rise of the Asian economies lifted demand again with the Chinese boom driving commodities stratospheric...until now.
I really hope he is way off target on this, but I still listen to his counsel because he has many miles on the clock...

It's an odd one isn't it.

One of the things people outside markets underestimate is the "race factor" at play in any commodity market.

A six year old once told me, in that eye opening way of theirs, that the last barrel of oil ever will only be worth what a museum will pay for it... ie. nothing).

If you accept that peak oil is past, and you are an oil producing country, then the strategic game becomes beggaring your oil producing neighbour in order to sell first (and highest)... in other words maintaining volume now to turn remaining oil into money. Along the way there will be leaps and bounds as (for example) shale extraction and other sources move in and out of viability.. but the general direction, if it isn't up, must be down. Markets are constantly in motion.

But to traders, money is as much a commodity as Oil or wheat. Just like Oil, there has been a race for yield on money since the printing presses began to roll post 2000 (the so called "goldilocks" liquidity following the dot com crash and preceeding the "Bernanke put", vastly accelerated by QE post Lehman). It's this money race which, IMO, has put the extreme volatility and record prices into the commodity complex and, by extension, into land prices between 2007-2014.

Yes, there is China, but there is always a back story when you need one. If it wasn't China it would be gulf wars and oil price shocks or famine - China is the ex post facto justification for more carry trades than it could ever possibly support in terms of consumption, export, or manufacturing. The price is set by the race to get the money in, not by the underlying need of the economy, and - as we are being reminded at the moment - there is also, always, a race to get the money out. The China story is the result of Loose money as much as anything else.

I hesitate to make any concrete prediction as to the effect on milk price from this reversion to a more normal historical pattern - apart from anything else, milk prices are measured in money terms and there is so much capable of dislocating in the current global economy that the nominal price could be meaningless. 40c a litre is one thing, but not if the minimum wage is €20 in the same year...

The 1930's are instructive as you rightly point out. Exported hyperinflation together with an agricultural depression and land prices falling like never before. Who would have thought it?

And - as you say - the War mopped it up - but at the same time changed everything. Why? Because the Industries which supported the war efforts (including the huge German Farb complex) turned to the production of artificial fertiliser. We didn't beat our swords into ploughshares, we beat them into NPK to keep those factories running, and we found a backstory (no more rationing, you'll never be hungry again!) and used it to support political subsidies to keep everyone buying the results...

And now here we are!

RightTurnClyde

kowtow wrote: »

It's an odd one isn't it.

One of the things people outside markets underestimate is the "race factor" at play in any commodity market.

A six year old once told me, in that eye opening way of theirs, that the last barrel of oil ever will only be worth what a museum will pay for it... ie. nothing).

If you accept that peak oil is past, and you are an oil producing country, then the strategic game becomes beggaring your oil producing neighbour in order to sell first (and highest)... in other words maintaining volume now to turn remaining oil into money. Along the way there will be leaps and bounds as (for example) shale extraction and other sources move in and out of viability.. but the general direction, if it isn't up, must be down. Markets are constantly in motion.

But to traders, money is as much a commodity as Oil or wheat. Just like Oil, there has been a race for yield on money since the printing presses began to roll post 2000 (the so called "goldilocks" liquidity following the dot com crash and preceeding the "Bernanke put", vastly accelerated by QE post Lehman). It's this money race which, IMO, has put the extreme volatility and record prices into the commodity complex and, by extension, into land prices between 2007-2014.

Yes, there is China, but there is always a back story when you need one. If it wasn't China it would be gulf wars and oil price shocks or famine - China is the ex post facto justification for more carry trades than it could ever possibly support in terms of consumption, export, or manufacturing. The price is set by the race to get the money in, not by the underlying need of the economy, and - as we are being reminded at the moment - there is also, always, a race to get the money out. The China story is the result of Loose money as much as anything else.

I hesitate to make any concrete prediction as to the effect on milk price from this reversion to a more normal historical pattern - apart from anything else, milk prices are measured in money terms and there is so much capable of dislocating in the current global economy that the nominal price could be meaningless. 40c a litre is one thing, but not if the minimum wage is €20 in the same year...

The 1930's are instructive as you rightly point out. Exported hyperinflation together with an agricultural depression and land prices falling like never before. Who would have thought it?

And - as you say - the War mopped it up - but at the same time changed everything. Why? Because the Industries which supported the war efforts (including the huge German Farb complex) turned to the production of artificial fertiliser. We didn't beat our swords into ploughshares, we beat them into NPK to keep those factories running, and we found a backstory (no more rationing, you'll never be hungry again!) and used it to support political subsidies to keep everyone buying the results...

And now here we are!

Bloody hell, that's one of those posts i have to read 10 times before I can even get my head around the first sentence. Very interesting read though (I think)

Dawggone

kowtow wrote: »

It's an odd one isn't it.

One of the things people outside markets underestimate is the "race factor" at play in any commodity market.

A six year old once told me, in that eye opening way of theirs, that the last barrel of oil ever will only be worth what a museum will pay for it... ie. nothing).

If you accept that peak oil is past, and you are an oil producing country, then the strategic game becomes beggaring your oil producing neighbour in order to sell first (and highest)... in other words maintaining volume now to turn remaining oil into money. Along the way there will be leaps and bounds as (for example) shale extraction and other sources move in and out of viability.. but the general direction, if it isn't up, must be down. Markets are constantly in motion.

But to traders, money is as much a commodity as Oil or wheat. Just like Oil, there has been a race for yield on money since the printing presses began to roll post 2000 (the so called "goldilocks" liquidity following the dot com crash and preceeding the "Bernanke put", vastly accelerated by QE post Lehman). It's this money race which, IMO, has put the extreme volatility and record prices into the commodity complex and, by extension, into land prices between 2007-2014.

Yes, there is China, but there is always a back story when you need one. If it wasn't China it would be gulf wars and oil price shocks or famine - China is the ex post facto justification for more carry trades than it could ever possibly support in terms of consumption, export, or manufacturing. The price is set by the race to get the money in, not by the underlying need of the economy, and - as we are being reminded at the moment - there is also, always, a race to get the money out. The China story is the result of Loose money as much as anything else.

I hesitate to make any concrete prediction as to the effect on milk price from this reversion to a more normal historical pattern - apart from anything else, milk prices are measured in money terms and there is so much capable of dislocating in the current global economy that the nominal price could be meaningless. 40c a litre is one thing, but not if the minimum wage is €20 in the same year...

The 1930's are instructive as you rightly point out. Exported hyperinflation together with an agricultural depression and land prices falling like never before. Who would have thought it?

And - as you say - the War mopped it up - but at the same time changed everything. Why? Because the Industries which supported the war efforts (including the huge German Farb complex) turned to the production of artificial fertiliser. We didn't beat our swords into ploughshares, we beat them into NPK to keep those factories running, and we found a backstory (no more rationing, you'll never be hungry again!) and used it to support political subsidies to keep everyone buying the results...

And now here we are!

+1.
You are excellent at distilling things to a few short paragraphs.
There are so many different ways of looking at things, and so many different analogies....

Things can change overnight due to geopolitics. Maybe the U.S. will crank up the printers later this year?
Maybe maybe maybe...one thing for sure a major weather event will be only short term relief.

Fuxake

cosatron wrote: »

TBH Mj I agree with him. in galway here, there is some amount of wasted land cause farmers are happy enough to plod along with a couple of heads to keep the single farm payment, its an absolute disgrace, my neighbour has over 108 acres and all he does is buy about 20 AA every year and fatten them, no fertilizer spread, only on silage ground, so slurry spread. The ai rep is from Clare and he thinks its a joke the amount land in Galway not being farmed properly. Then when you try and rent some land, they want and 100 euro an acre and the single farm payment back aswell.

Sure it's awful to look at land wasted. But be careful what you wish for. Imagine if every acre in Ireland was drained, reclaimed, whatever and farmed to the very hilt. What would that do to the price of cattle? What would it do to the price of milk? And would land be any cheaper to rent? After all, instead of having all these lazy ould geezers around who are not competing with you to expand, you'd have a whole population of extra farmers farming to the hilt and looking for the next opportunity to expand. And even if milk fell below 20c or cattle price fell back to €3, teagasc and the Minister would be saying that if the average guy was as productive as the top 10%, he'd be grand. The one thing I never get is why people get so annoyed about the lad up the road making a bit of hay and chilling. At least he's not competing with you in the market place but maybe he's keeping the price of porter up?

cosatron

Fuxake wrote: »

Sure it's awful to look at land wasted. But be careful what you wish for. Imagine if every acre in Ireland was drained, reclaimed, whatever and farmed to the very hilt. What would that do to the price of cattle? What would it do to the price of milk? And would land be any cheaper to rent? After all, instead of having all these lazy ould geezers around who are not competing with you to expand, you'd have a whole population of extra farmers farming to the hilt and looking for the next opportunity to expand. And even if milk fell below 20c or cattle price fell back to €3, teagasc and the Minister would be saying that if the average guy was as productive as the top 10%, he'd be grand. The one thing I never get is why people get so annoyed about the lad up the road making a bit of hay and chilling. At least he's not competing with you in the market place but maybe he's keeping the price of porter up?

ha, never looked at it from that point of view.

freedominacup

kowtow wrote: »

It's an odd one isn't it.

One of the things people outside markets underestimate is the "race factor" at play in any commodity market.

A six year old once told me, in that eye opening way of theirs, that the last barrel of oil ever will only be worth what a museum will pay for it... ie. nothing).

If you accept that peak oil is past, and you are an oil producing country, then the strategic game becomes beggaring your oil producing neighbour in order to sell first (and highest)... in other words maintaining volume now to turn remaining oil into money. Along the way there will be leaps and bounds as (for example) shale extraction and other sources move in and out of viability.. but the general direction, if it isn't up, must be down. Markets are constantly in motion.

But to traders, money is as much a commodity as Oil or wheat. Just like Oil, there has been a race for yield on money since the printing presses began to roll post 2000 (the so called "goldilocks" liquidity following the dot com crash and preceeding the "Bernanke put", vastly accelerated by QE post Lehman). It's this money race which, IMO, has put the extreme volatility and record prices into the commodity complex and, by extension, into land prices between 2007-2014.

Yes, there is China, but there is always a back story when you need one. If it wasn't China it would be gulf wars and oil price shocks or famine - China is the ex post facto justification for more carry trades than it could ever possibly support in terms of consumption, export, or manufacturing. The price is set by the race to get the money in, not by the underlying need of the economy, and - as we are being reminded at the moment - there is also, always, a race to get the money out. The China story is the result of Loose money as much as anything else.

I hesitate to make any concrete prediction as to the effect on milk price from this reversion to a more normal historical pattern - apart from anything else, milk prices are measured in money terms and there is so much capable of dislocating in the current global economy that the nominal price could be meaningless. 40c a litre is one thing, but not if the minimum wage is €20 in the same year...

The 1930's are instructive as you rightly point out. Exported hyperinflation together with an agricultural depression and land prices falling like never before. Who would have thought it?

And - as you say - the War mopped it up - but at the same time changed everything. Why? Because the Industries which supported the war efforts (including the huge German Farb complex) turned to the production of artificial fertiliser. We didn't beat our swords into ploughshares, we beat them into NPK to keep those factories running, and we found a backstory (no more rationing, you'll never be hungry again!) and used it to support political subsidies to keep everyone buying the results...

And now here we are!

My grandfather often said they'll never burn the last tonne of coal.
It's no wonder you went milking kt. A bit of mind numbing repetition was probably doctors orders. Thanks again. As dawg said you have a great ability to distill a lot of information down to a few easily grasped points.

Buford T. Justice XIX

US Agricultural exports declining and imports rising.

http://www.ers.usda.gov/data-products/chart-gallery/detail.aspx?chartId=56573&ref=collection&embed=True

It's across all sectors, not just dairy, but is having an impact there also, I imagine.

kowtow

freedominacup wrote:

It's no wonder you went milking kt. A bit of mind numbing repetition was probably doctors orders..

You're not wrong there. It's basically "retirement as an extreme sport".

It's also the first place I've worked run by responsible adults.... even if the odd one does kick a bit in the parlour.

billie holiday

Lads isnt there a peculiar sheepishness follow the leader in Irish people ?/
In every country people follow the leader but it has occured to me that the Irish have less individuality than others ive observed.
'Buy houses Buy houses'
'Milk more cows Milk more cows'
'expand expand'

billie holiday

Lads isnt there a peculiar sheepishness follow the leader in Irish people ?/
In every country people follow the leader but it has occured to me that the Irish have less individuality than others ive observed.
'Buy houses Buy houses'
'Milk more cows Milk more cows'
'expand expand'

Dawggone

France. Update.


This week the dairy and pig farmers in Brittany have been blockading roads, burning palets, and causing mayhem. Again.
However this time, so far, they haven't pulled out the slurry tankers and muck spreaders (yet).
Min for Ag announced a package for distressed farmers of €250mil. This will be means tested.

A friend was up there yesterday buying cows...
The farm selling the cows have 150 cows for sale. He rang me to advise me to buy some so I took 10. Anyhow there are 218ha of excellent quality land on the farm with sows and fattening units...
You'd be wondering why are they getting out of dairy...? The farm is a GAEC which is a partnership of 5 that grouped together to achieve a bit of scale. They had a 18x18 herringbone parlor that they discarded 7yrs ago and fitted 3 robots. This I assume was a lifestyle choice as the 5 partners remained on farm. The farm has 400 acres laid out to tillage, which is all used in house.
They will get bailout money from the government and I won't get a penny...

kevthegaff

Dawggone wrote: »

France. Update.


This week the dairy and pig farmers in Brittany have been blockading roads, burning palets, and causing mayhem. Again.
However this time, so far, they haven't pulled out the slurry tankers and muck spreaders (yet).
Min for Ag announced a package for distressed farmers of €250mil. This will be means tested.

A friend was up there yesterday buying cows...
The farm selling the cows have 150 cows for sale. He rang me to advise me to buy some so I took 10. Anyhow there are 218ha of excellent quality land on the farm with sows and fattening units...
You'd be wondering why are they getting out of dairy...? The farm is a GAEC which is a partnership of 5 that grouped together to achieve a bit of scale. They had a 18x18 herringbone parlor that they discarded 7yrs ago and fitted 3 robots. This I assume was a lifestyle choice as the 5 partners remained on farm. The farm has 400 acres laid out to tillage, which is all used in house.
They will get bailout money from the government and I won't get a penny...

ah but you will get a few cheep cows:-D

kowtow

Dawggone wrote:

They will get bailout money from the government and I won't get a penny...

Does the partnership not take them out of the boundaries of the means test?

Then again nothing would surprise me where subsidy in mainland Europe is concerned.

Dawggone

kowtow wrote: »

Does the partnership not take them out of the boundaries of the means test?

Then again nothing would surprise me where subsidy in mainland Europe is concerned.

It puts them *into* the bounds of the bailout because there are 5 families involved...and their accounts must have a red hue.
They could get a good few thousand from the bailout money, once that is collected they are officially going to get out. They have 1.5mill litres of production rights to sell @ 46cpl...
Also the sfp rules say that the first 50ha is free from diminution. So there are 5of them @50ha so no losses of €770/ha of sfp. How bad.

I farm alone...

frazzledhome

Dawggone wrote: »

France. Update.


This week the dairy and pig farmers in Brittany have been blockading roads, burning palets, and causing mayhem. Again.
However this time, so far, they haven't pulled out the slurry tankers and muck spreaders (yet).
Min for Ag announced a package for distressed farmers of €250mil. This will be means tested.

A friend was up there yesterday buying cows...
The farm selling the cows have 150 cows for sale. He rang me to advise me to buy some so I took 10. Anyhow there are 218ha of excellent quality land on the farm with sows and fattening units...
You'd be wondering why are they getting out of dairy...? The farm is a GAEC which is a partnership of 5 that grouped together to achieve a bit of scale. They had a 18x18 herringbone parlor that they discarded 7yrs ago and fitted 3 robots. This I assume was a lifestyle choice as the 5 partners remained on farm. The farm has 400 acres laid out to tillage, which is all used in house.
They will get bailout money from the government and I won't get a penny...

Sounds like a bad debt situation?

You post milk prices occasionally that make us blush, how are these people not able to manage, too many chiefs, heavy metal disease ?

Dawggone

frazzledhome wrote: »

Sounds like a bad debt situation?

You post milk prices occasionally that make us blush, how are these people not able to manage, too many chiefs, heavy metal disease ?

Sounds like spoiled child syndrome...

These are the boys that have come from 30yrs of pampering and think the world owes them a living.
Only the Brittany lads are acting up...



These are the lads that were in such a protected and lucrative industry they work 35hr weeks and have 7 weeks holidays p.a.

The 'GAEC' partnership thing is a kind of back door socialism. It would pay me hand over fist to take 5 or 6 partners into the business. This opens doors to young farmers to get a leg into the industry without a perch of land or a bob in their pockets.

The positives are that they will be nice acquisitions when those business's really struggle.


Rant over.

whelan2

do many have cows out?

Deepsouthwest

whelan2 wrote: »

do many have cows out?

Only cows out around here are cows that broke out!

darragh_haven

Deepsouthwest wrote: »

Only cows out around here are cows that broke out!

Or the ones that floated out the gate...

howdee

whelan2 wrote: »

do many have cows out?

Got them out today for a pick, have to be careful.

jaymla627

whelan2 wrote: »

do many have cows out?

Got them out for 5 days back two weeks ago to graze of some heavier covers to get slurry out on, with the rain the past week and weather forecast it's looking like the middle of Feb before anything will go out agaun and that depends on a couple of dry days....
Half thinking of getting fodder beet for the milkers if things don't improve weather wise to stretch out the good wraps kept up for milkers

mf240

whelan2 wrote: »

do many have cows out?

No. We have sheds for the winter.

whelan2

So do we. Was just wondering if there's grazable land out there

Timmaay

Have had mine out by day since 17th Jan except for 3days during it, yeilds up about a litre, however protein has remained stubbornly low at 3.20. Still over 1/2 a pit of silage and maize for the milkers (which my dad moans about every single morning when I let the cows out ha), 2bh we definitely made wayyy too much of it, this winter I was feeding high dmd wraps also. Is it too much of a risk to hold over the maize until next year?? We were feeding out silage until well into may last year to empty the pit ugh.

Just under 11% of the farm grazed out (lighter maidens out also), I'm actually moving through it too quickly at the minute, however our calving is very spread out across March April and may, so once I dry off the rest of the late spring calvers in 2wk we'll be stocked extremely low for the rest of round1.

mahoney_j

I'm all for getting cows out early and making use of grass but weather and ground conditions even around here which would be traditionally dry are near saturated after all this weeks rain again .massive risk churning fresh cows /heifers out in current conditions .seen some out today and cows with arses to rain poaching ground gathered around the gap

Timmaay

mahoney_j wrote: »

I'm all for getting cows out early and making use of grass but weather and ground conditions even around here which would be traditionally dry are near saturated after all this weeks rain again .massive risk churning fresh cows /heifers out in current conditions .seen some out today and cows with arses to rain poaching ground gathered around the gap

Different country up here, alot of totally saturated paddocks yep, but enough dry ones to get away without to much damage. I can never understand cows standing at gaps, leave the bloody gap open for them to come back in ha. If they only get 2hrs grazing done and back in that is fine! I was lucky enough the cows choose to stay out until 3 or 4pm most days this week though!

Brown Podzol

Timmaay wrote: »

Have had mine out by day since 17th Jan except for 3days during it, yeilds up about a litre, however protein has remained stubbornly low at 3.20. Still over 1/2 a pit of silage and maize for the milkers (which my dad moans about every single morning when I let the cows out ha), 2bh we definitely made wayyy too much of it, this winter I was feeding high dmd wraps also. Is it too much of a risk to hold over the maize until next year?? We were feeding out silage until well into may last year to empty the pit ugh.

Just under 11% of the farm grazed out (lighter maidens out also), I'm actually moving through it too quickly at the minute, however our calving is very spread out across March April and may, so once I dry off the rest of the late spring calvers in 2wk we'll be stocked extremely low for the rest of round1.

Regularly carry over maize, no problem once well covered and rat baited. The end of the present pit is there with two years and still fine.