Milk Price II

Buford T. Justice XIX

Old thread here...

http://www.boards.ie/vbulletin/showthread.php?t=2056928708

24/6/16

Recently we saw three posters close their accounts over disagreements in the dairy threads. While there is a lot of frustration and discontent with current milk prices and the processing industry, the recent tendency for dairy threads to become tit-for-tat arguments isn’t tolerable for those not involved.

All farming sectors go through difficult periods and during such times there may need to be changes in how threads are moderated.

Dairy threads are going to be more closely monitored and subject to stricter moderation for a while.

To that end we won’t tolerate baiting of posters, constantly reviving old arguments, posters with agendas or crusading for a cause.

Whether it’s discussion of the business or politics of the dairy or other sectors, we expect civility and tolerance toward each other and other opinions as diversity of opinion is needed as a source of different ways of looking at a situation.

"The aim of argument, or of discussion, should not be victory, but progress." - Joseph Joubert

Also please be aware that what you may post as light-hearted banter can be read totally differently by someone adversely affected by the subject matter and evoke a reaction you hadn’t intended.

The ‘Off-Season’ forum, and its anonymous posting, is available for anyone to chat about their situation.

The Mod Team.


Just stuck up the warning from the old thread as it's still relevant.

Ready......Steady.....GOOOO...

whelan2

Hope we get back up to the high prices quoted ai the first half of the last thread

mahoney_j

How much more do we see in the line of price rises this calendar year ??.supply dropping off demand picking up all positive but still early days ,personally I can see another 3 cent comming

stanflt

Why was the original tread closed???

whelan2

stanflt wrote: »

Why was the original tread closed???

Once a thread gets to ten thousand posts it's closed and a new one started. Don't worry it was nothing to do with the glanbia rep in Nigeria

Buford T. Justice XIX

stanflt wrote: »

Why was the original tread closed???

As Whelan2 said, threads should be closed at around 10k posts or milk price will collapse or some disaster like that will happen.

Definitely Not Kovu

Buford T. Justice V wrote: »

As Whelan2 said, threads should be closed at around 10k posts or milk price will collapse or some disaster like that will happen.

All the milk cartons in the world explode.

kowtow

stanflt wrote: »

Why was the original tread closed???

It got to 10,000 litres and there was a suspicion that there were nuts involved.

Sam Kade

kowtow wrote: »

It got to 10,000 litres and there was a suspicion that there were nuts involved.

It went over its quota

Farmer Ed

I didn't believe in reincarnation until I came on boards between treads being closed and opened again and people getting the hump and resurrecting again in a new form. All very confusing. Anyway in a past thred I was accused of not having any helpful ideas for people tied in to msas. Well that is not actually correct. Somewhere a thousand posts back in a far off galaxy I am on record as saying that people who have been tied in to contracts and are not happy should be handing in their notice with intention to change purchaser as soon as the contract is up. I know in Dgs case it said you needed to give 2 years notice so IMO that would mean you should be doing it asap to get out when your 5 years are up.

Actually the more I think about it. There is possibly no other kind of protest imaginable would get management to sit up and take notice than the prospect of a mass exodus of suppliers in two years time. It could well yeild short term benefits for all.

Keepgrowing

Farmer Ed wrote: »

I didn't believe in reincarnation until I came on boards between treads being closed and opened again and people getting the hump and resurrecting again in a new form. All very confusing. Anyway in a past thred I was accused of not having any helpful ideas for people tied in to msas. Well that is not actually correct. Somewhere a thousand posts back in a far off galaxy I am on record as saying that people who have been tied in to contracts and are not happy should be handing in their notice with intention to change purchaser as soon as the contract is up. I know in Dgs case it said you needed to give 2 years notice so IMO that would mean you should be doing it asap to get out when your 5 years are up.

Actually the more I think about it. There is possibly no other kind of protest imaginable would get management to sit up and take notice than the prospect of a mass exodus of suppliers in two years time. It could well yeild short term benefits for all.

So your advise is exactly what people already know, give notice immediately, is that it?
Truly earth shattering.
Can we expect you to repeat this ad nausiem for the next few weeks.

Oh yes and how you didn't sign a MSA

kevthegaff

In fairness to ed he's on the other side of the spectrum, we need all views pro/nah. Things change very quickly, glanbia/dairygold could get their act together in the future but all processors need to be kept on their toes, question is how..

Farmer Ed

Keepgrowing wrote: »

So your advise is exactly what people already know, give notice immediately, is that it?
Truly earth shattering.
Can we expect you to repeat this ad nausiem for the next few weeks.

Oh yes and how you didn't sign a MSA

It's only my opinion if you don't agree fair enough. But nothing to lift price like a bit of competition and if we are to think about it logically then yes I recon nothing would focus the minds of management more than the prospect of losing a large volume of suppliers. Even the prospect of it happening in two years would surely make them live a better life and hopefully a better milk price for all. Don't know why you are angry at people who didn't sign msas? If it wasn't for that there would have been zero competition between purchasers. IMO all suppliers have benefited as a result.

Buford T. Justice XIX

Farmer Ed wrote: »

It's only my opinion if you don't agree fair enough. But nothing to lift price like a bit of competition and if we are to think about it logically then yes I recon nothing would focus the minds of management more than the prospect of losing a large volume of suppliers. Even the prospect of it happening in two years would surely make them live a better life and hopefully a better milk price for all. Don't know why you are angry at people who didn't sign msas? If it wasn't for that there would have been zero competition between purchasers. IMO all suppliers have benefited as a result.

And if a large volume of suppliers decide to leave their processor, where would they go?

What processor has the processing capacity to cater for a large influx of new suppliers and the ability to market that powder?

I agree with you in that something needs to be done but it has to be some bit realistic.

whelan2

Buford T. Justice V wrote: »

And if a large volume of suppliers decide to leave their processor, where would they go?

What processor has the processing capacity to cater for a large influx of new suppliers and the ability to market that powder?

I agree with you in that something needs to be done but it has to be some bit realistic.

Some will just get out altogether....tbh would see that as a option rather than the way we are treated at the minute

Keepgrowing

kevthegaff wrote: »

In fairness to ed he's on the other side of the spectrum, we need all views pro/nah. Things change very quickly, glanbia/dairygold could get their act together in the future but all processors need to be kept on their toes, question is how..

Correct, the question is "how",
Ed's posts aren't offering any alternatives, just the same long winded scutter again and again and again and again and again and again...................,,.....,,,,,,,,,

OverRide

There IS a mechanism already in place to improve competition if it would only do its job and that's the competition and consumer protection authority

One of the current commissioners though was instrumental(I understand from the old thread) in drawing up an msa an exceedingly anti competitive and anti dairy farmer device
How they qualified for that job is beyond me
In America,commission members would be vetted and such an item on the cv would rightly disqualify them

Thinking an msa isn't anti competitive is after all akin to thinking rain isn't wet

Farmer Ed

Buford T. Justice V wrote: »

And if a large volume of suppliers decide to leave their processor, where would they go?

What processor has the processing capacity to cater for a large influx of new suppliers and the ability to market that powder?

I agree with you in that something needs to be done but it has to be some bit realistic.

Just the threat and the possibility would be enough to keep the on their toes. 200 Welford suppliers moved pretty much over night. That kind of a shift strikes fear in to managment. Even for farmers who can't leave. A rising tide of competition raises all boats.

mf240

Keepgrowing wrote: »

Correct, the question is "how",
Ed's posts aren't offering any alternatives, just the same long winded scutter again and again and again and again and again and again...................,,.....,,,,,,,,,

Sure you were cheerleading the msa and wondering what the big deal was.

Ed had the brain's not to sign one . (Ulike me:mad:)

Timmaay

mf240 wrote: »

Sure you were cheerleading the msa and wondering what the big deal was.

Ed had the brain's not to sign one . (Ulike me:mad:)

How much money would a typical 400kl Glanbia supplier have lost out if they had not signed the Msa??

whelan2

Timmaay wrote: »

How much money would a typical 400kl Glanbia supplier have lost out if they had not signed the Msa??

if they didnt sign they could have moved

Farmer Ed

I never suggested anything about brains or otherwise but i would consider anyone who didn't sign lucky. There is easily a margin of 1c for anyone able to move. That's 4k a year on 400000 l also a lot less hassle around

Water John

Not very up on EU laws, but I think those not signing MSA's and filing to leave their coop purchaser, could partake in the setting up of a producer group.

kowtow

The more I think about it the answer is already staring us in the face.

All the peculiarities of coop law could be overcome by superimposing an MSA... but this time along model lines written by producers, not a greedy contract forced on them by processors trying to secure future supply on their own terms.

I can think of many elements I would include in such a model "fair dairy" agreement... not least a limit to 90% of milk (keeps everyone on their toes).. mandatory disclosure of the structure of fixed price schemes to prevent minority oppression, etc etc., reasonable transparency over product mix + returns.....but surely the drafting of a prototype and the insistence that processors use it would be a clear benchmark that everyone could get around. Public opinion would be on our side and processors refusing to use it would have to explain why they felt the need to treat their shareholders more harshly.

It would be a genuinely original and constructive base around which the industry could gather with confidence. Put the cooperation back in co-ops and move forward..

Not difficult thing to come up with.

Farmer Ed

kowtow wrote: »

The more I think about it the answer is already staring us in the face.

All the peculiarities of coop law could be overcome by superimposing an MSA... but this time along model lines written by producers, not a greedy contract forced on them by processors trying to secure future supply on their own terms.

I can think of many elements I would include in such a model "fair dairy" agreement... not least a limit to 90% of milk (keeps everyone on their toes).. mandatory disclosure of the structure of fixed price schemes to prevent minority oppression, etc etc., reasonable transparency over product mix + returns.....but surely the drafting of a prototype and the insistence that processors use it would be a clear benchmark that everyone could get around. Public opinion would be on our side and processors refusing to use it would have to explain why they felt the need to treat their shareholders more harshly.

It would be a genuinely original and constructive base around which the industry could gather with confidence. Put the cooperation back in co-ops and move forward..

Not difficult thing to come up with.

Maybe not difficult but you can bet the ICOS would have something to say about it. For things to change we need real leadership. IMO the whole thing has gone way too cosy.

Keepgrowing

mf240 wrote: »

Sure you were cheerleading the msa and wondering what the big deal was.

Ed had the brain's not to sign one . (Ulike me:mad:)

I'm looking for an alternative from him, not forthcoming though

Yes I signed one and would again as I've no problem with it. It's the price I have a problem with and that's out of my control as markets dictate that, therefore I don't obsess about it.

27c/litre lodged to my account haven't seen that in any of the posts this month yet.

What GII did re Fixed scheme is nothing short of disrespectful to participants. They can PR all their spin so well but when it comes to the people who matter i.e. The farmer they don't have the same duty of care. This money was always going to be collected and people signed in should've known that as it was on the contract. That doesn't excuse how it was done, a simple letter letting people know in order to organise their cash flow would've gone along way.

Btw, find the post where I cheerled the signing of the MSA.

mahoney_j

Keepgrowing wrote: »

I'm looking for an alternative from him, not forthcoming though

Yes I signed one and would again as I've no problem with it. It's the price I have a problem with and that's out of my control as markets dictate that, therefore I don't obsess about it.

27c/litre lodged to my account haven't seen that in any of the posts this month yet.

What GII did re Fixed scheme is nothing short of disrespectful to participants. They can PR all their spin so well but when it comes to the people who matter i.e. The farmer they don't have the same duty of care. This money was always going to be collected and people signed in should've known that as it was on the contract. That doesn't excuse how it was done, a simple letter letting people know in order to organise their cash flow would've gone along way.

Btw, find the post where I cheerled the signing of the MSA.

I've no issue with Msa either ,coop needs guarntee of supply and farmer needs guarntee of milk collection and payement .ive one signed with Arrabawn ,no issue on fixed schemes I'd love one and can't understand some peoples opposition .its only on a portion of milk and your simply spreading risk ,lots of Glanbia guys have been sitting pretty at a milk price far above base this year .thought long and hard about leaving last year to either dg or Glanbia ,lots of things just didn't sit right with me ,principle one been Plc element .sharehokders and share price come before the lad milking cows daily and glanbias performance (re milk price to farmer )proves that whilst smaller coops like my own and west cork have consistently managed to pay a price well above both

kowtow

mahoney_j wrote:

I've no issue with Msa either ,coop needs guarntee of supply and farmer needs guarntee of milk collection and payement .ive one signed with Arrabawn ,no issue on fixed schemes I'd love one and can't understand some peoples opposition .its only on a portion of milk and your simply spreading risk ,lots of Glanbia guys have been sitting pretty at a milk price far above base this year .thought long and hard about leaving last year to either dg or Glanbia ,lots of things just didn't sit right with me ,principle one been Plc element .sharehokders and share price come before the lad milking cows daily and glanbias performance (re milk price to farmer )proves that whilst smaller coops like my own and west cork have consistently managed to pay a price well above both

I don't think anyone has an issue with an MSA per se.

There has to be a contract between supplier and customer, and it may as well be written down and give both what they need.

If we had terms in the MSA obliging the co-op to be transparent about the mix of milk being sold, and the matching of fixed price schemes, surely it would be an incentive for every coop to be as good as the best.

Sam Kade

So if you sign a contract with DG you have to give them 2 years notice if you want out of it?

OverRide

I do have an issue with an MSA
If your co op want your milk,they can bloody well go out and pay the going market price for it
That's their continuity of supply right there
Glanbia are currently paying about 6c under it and using the msa as a tool to do this

kowtow

If a 'model' MSA was limited to maximum 90% of a farms milk, and the farm was free to sell the balance to other processors, would that help to keep everyone competitive?

I can see the threat of contracted vs spot milk there, but - particularly if these fixed price arrangements are not backed by single customer purchases - then that is actually what we have already.

Mooooo

Maybe trixi or anyone else who knows could explain the pricing in the UK. That appears to be something to try and avoid anyway the way the b prices went so low. If it's 90% in your example kowtow would it be from a reference year ie quota or would it just be 90% of that years supply with the rest sorted at year end??

Farmer Ed

OverRide wrote: »

I do have an issue with an MSA
If your co op want your milk,they can bloody well go out and pay the going market price for it
That's their continuity of supply right there
Glanbia are currently paying about 6c under it and using the msa as a tool to do this

You have said it all there. Short msas I have no problem with. But tying people in for seven years and bullying farmers? Well we have seen the results this year. The alternative? Don't sign such msas again. And bloody well let them know you won't sign them again. You are totally correct. If they want your milk then pay for it. That is the alternative to the current system that has given even more power to managment.

jaymla627

OverRide wrote: »

I do have an issue with an MSA
If your co op want your milk,they can bloody well go out and pay the going market price for it
That's their continuity of supply right there
Glanbia are currently paying about 6c under it and using the msa as a tool to do this

Funniest thing about them adjusting the fixed price is that greenfields in their open day booklet for 2016 never even accounted for this, pretty petty lads saying sure lads should of known their was going to be cuts when this shining example of a model dairy farm with some of the best respected/highly paid agri advisors in the country hasn't even thought to account for it, and glanbia shareholders in it too, makes it even more comical....
They have 356,833 litres in the scheme this year, it will leave a nice hole in their projected budget

whelan2

Keepgrowing wrote: »

I'm looking for an alternative from him, not forthcoming though

Yes I signed one and would again as I've no problem with it. It's the price I have a problem with and that's out of my control as markets dictate that, therefore I don't obsess about it.

27c/litre lodged to my account haven't seen that in any of the posts this month yet.

What GII did re Fixed scheme is nothing short of disrespectful to participants. They can PR all their spin so well but when it comes to the people who matter i.e. The farmer they don't have the same duty of care. This money was always going to be collected and people signed in should've known that as it was on the contract. That doesn't excuse how it was done, a simple letter letting people know in order to organise their cash flow would've gone along way.

Btw, find the post where I cheerled the signing of the MSA.

Does the 27cpl include GAP scheme and what if any% have you fixed, also what solids? Sorry for all the questions

Farmer Ed

Sorry for repeating myself but I would invite anyone to read their co op rules. Your co op is obliged to purchase all your milk and always has been. The notion that msas are needed for this is probably the biggest red hering ever sold to farmers. Don't take my word for it read the rules.

kowtow

Mooooo wrote: »

Maybe trixi or anyone else who knows could explain the pricing in the UK. That appears to be something to try and avoid anyway the way the b prices went so low. If it's 90% in your example kowtow would it be from a reference year ie quota or would it just be 90% of that years supply with the rest sorted at year end??

I think I would just allow an MSA to cover no more than 90% of a farms milk in any one year, that way if they wanted to sell extra to premium producers, other co-ops, or bottle it themselves they would be free to. Good for innovation, and - if other processors wanted a foot in the door - maybe just enough to allow people to vote with their feet while still supplying a primary co-op.

Have to try and get the relationship on a business like footing, not dominated by the co-op.

Take your point about the UK system, but I would make two observations:

1. Even if it seems harsh, the UK system also seems fairly transparent. The co-op AFAIK contracts for the milk it knows it can sell - often to named parties like supermarkets - and the farmer with the "fixed" contract sees the benefit

2. Everything else is spot milk, which whilst it has been very low has also recently been leading prices upwards, which is the nature of a spot market.

The important point is that, whether we like it or not, fixed price contracts unmatched on the sell side by a co-op are already in effect putting the UK system into place in Ireland. If you haven't bought in to the contracts, you are suffering the effects of a spot price. That's why clarity is so badly needed in the MSA to get rid of all the smoke and mirrors.

kowtow

Farmer Ed wrote: »

Sorry for repeating myself but I would invite anyone to read their co op rules. Your co op is obliged to purchase all your milk and always has been. The notion that msas are needed for this is probably the biggest red hering ever sold to farmers. Don't take my word for it read the rules.

Do those rules extend to new suppliers?

Keepgrowing

whelan2 wrote: »

Does the 27cpl include GAP scheme and what if any% have you fixed, also what solids? Sorry for all the questions

Doesn't inc gap as that's a loan and therefore doesn't count as milk price.

The rest is a combination of solids and some fixed price not a massive % unfortunately. I'll not post details here if you don't mind.

Keepgrowing

jaymla627 wrote: »

Funniest thing about them adjusting the fixed price is that greenfields in their open day booklet for 2016 never even accounted for this, pretty petty lads saying sure lads should of known their was going to be cuts when this shining example of a model dairy farm with some of the best respected/highly paid agri advisors in the country hasn't even thought to account for it, and glanbia shareholders in it too, makes it even more comical....
They have 356,833 litres in the scheme this year, it will leave a nice hole in their projected budget

Lol even managed a dig a Greenfield again

mf240

Keepgrowing wrote: »

Doesn't inc gap as that's a loan and therefore doesn't count as milk price.

The rest is a combination of solids and some fixed price not a massive % unfortunately. I'll not post details here if you don't mind.

Someone with good solids like you is actually being hit hardest by the base of 21 plus a flat 2 regardless of whether you have white water or high solids milk.

Maybe they will come good before the year is out.

Keepgrowing

mf240 wrote: »

Someone with good solids like you is actually being hit hardest by the base of 21 plus a flat 2 regardless of whether you have white water or high solids milk.

Maybe they will come good before the year is out.

100% correct

RightTurnClyde

Keepgrowing wrote: »

Doesn't inc gap as that's a loan and therefore doesn't count as milk price.

The rest is a combination of solids and some fixed price not a massive % unfortunately. I'll not post details here if you don't mind.

Did the MSA have to be extended for the Gap loan

whelan2

RightTurnClyde wrote: »

Did the MSA have to be extended for the Gap loan

yes, is it the same msa as the previous one?

Buford T. Justice XIX

mf240 wrote: »

Someone with good solids like you is actually being hit hardest by the base of 21 plus a flat 2 regardless of whether you have white water or high solids milk.

Maybe they will come good before the year is out.

Can someone explain this reasoning to me?

We are being paid on kgs of solids with a deduction for water of 4c/L. Surely the guy with high solids will still be doing better than the guy with the same kgs of solids but a higher volume no matter what the price is?

Timmaay

Any more word on this supply reduction scheme?? Closing date is 19th Sept?

Mooooo

They are it's just as the price drop it falls based on p and bf and the difference between high solids and low solids reduces. At 35 cent base the difference between the two may be 7 cent whereas at 22c base it may only be 2 cent

Keepgrowing

Timmaay wrote: »

Any more word on this supply reduction scheme?? Closing date is 19th Sept?

Id say there'll be no more about it now that price looks to be rising. Lads will stay producing for the winter to try and cash in

yosemitesam1

Mooooo wrote: »

Maybe trixi or anyone else who knows could explain the pricing in the UK. That appears to be something to try and avoid anyway the way the b prices went so low. If it's 90% in your example kowtow would it be from a reference year ie quota or would it just be 90% of that years supply with the rest sorted at year end??

Might be looking at it the wrong way but the uk pricing system does seem to have corrected the oversupply fairly fast compared to here where farmers as a collective will make sure that enough expansion is always done to keep prices below where they want it long term.

stanflt

Keepgrowing wrote: »

Id say there'll be no more about it now that price looks to be rising. Lads will stay producing for the winter to try and cash in

I'm very interested in putting about 50000 litres from October to December in it

Going to seriously cut down on these months as Glanbia are unwilling to pay for this milk

If I cut I will actually get more for my milk because my winter bonuses will be divided over less litres

I'll have less of a feed bill and 7k coming next spring when it will be needed for fert etc etc when cash flow will be tight

Dawggone

On reading this thread now a couple of questions come to mind.

1. Why is it being allowed that a processor can furnish a milk payout that's not simple and concise?

2. Why sign a supply agreement without a price being included?

3. How can they fix a price with some suppliers without fixing or forward selling to end users or distributors? Otherwise some suppliers are funding the difference when fixed price is above spot.

4. How come that price turned the moment a supply reduction scheme was introduced from Brussels?

Freedoms suggestion of a supply arrest at a critical time would be heavily supported if it was possible here.