Milk Price III

whelan2

Mooooo wrote: »

Dairygold up to 32...

Ia anyone paying over 32. Seems to be a gentlemen's agreement between them all to pay the same

Farmer Ed

whelan2 wrote: »

Ia anyone paying over 32. Seems to be a gentlemen's agreement between them all to pay the same

Arrabawn 32.75. Botherbue ,west cork and Strathroy anyone? Would be a surprise if they are not even further ahead? But yes the big three on the same price.

Water John

Dairygold being written up as 32.5 in the press. But .5 is a quality bonus. So Moo is correct, it's 32.

visatorro

Seeing as this is a milk price thread, two litres of mace milk 1;79, two litres of avonmore 2;29 in local shop. The avonmore does taste nicer though!

Water John

It's the brand loyalty bonus.
I think I may have posted this before, Branded butter 3.15 Centra 2.25.

Your milk there is on over a 25% bonus. The butter is on a 40% bonus.

What premium should really be on Irish Pastureland GM Free milk products?

alps

Water John wrote: »

It's the brand loyalty bonus.


Your milk there is on over a 25% bonus. The butter is on a 40% bonus.

Careful with the assumptions

This is the premium the consumer pays...

The important one is the difference in the invoice price to the supermarket...

Farmer Ed

alps wrote: »

Careful with the assumptions

This is the premium the consumer pays...

The important one is the difference in the invoice price to the supermarket...

The big immediate question facing us is will the Germans continue to pay a premium on Kerrygold butter? As you already posted here, by the end of this year 30% of German milk will be certified as GM free. As it stands the Kerrygold brand can not. Potentially a big worry for us once the German marketeers seek to point out our weakness.

whelan2

See Dale farm has increased their milk price for June, it would be nice to know what price you are getting when you are actually suppllying it

Water John

This though it's beef is a good move, premium product.

http://www.thejournal.ie/irish-beef-sellers-get-go-ahead-in-america-3453213-Jun2017/

This is Ireland's agricultural future. Part of the premium must find its way to the producer. That should be one other specific condition, since its the farmer, by his/her farming methods, puts the option of the premium, in place.

blackdog1

France is GM free yet they still import gm feed for cattle. It's a load if rubbish. Germany is not gm free unless they import gm free crops which I doubt they do.

Farmer Ed

blackdog1 wrote: »

France is GM free yet they still import gm feed for cattle. It's a load if rubbish. Germany is not gm free unless they import gm free crops which I doubt they do.

Actually for some time now some of the German retailers have had GM free sections in their shops. Alps shared with us a while back that he had come across an German article that reported the 30% of German milk will be certified GM free by the end of this year.

It may well be rubbish. But what do you think the German marketeers will do with this? I'd be surprised if they won't try and use it to their advantage. They are hardly encouraging German farmers to feed GM free inputs if there isn't some benefit to the German industry from doing so?

kowtow

Farmer Ed wrote: »

Actually for some time now some of the German retailers have had GM free sections in their shops. Alps shared with us a while back that he had come across an German article that reported the 30% of German milk will be certified GM free by the end of this year.

It may well be rubbish. But what do you think the German marketeers will do with this? I'd be surprised if they won't try and use it to their advantage. They are hardly encouraging German farmers to feed GM free inputs if there isn't some benefit to the German industry from doing so?

I'm not sure that the German butter industry is all that threatened by Kerrygold...

You often hear figures like "second biggest brand" or whatever but that ignores the fact that butter is typically a local or own brand product. Lurpak - for example - which used to be more or less the only unsalted butter in the UK would have been a big brand but not in terms of overall consumption, simply because every local supermarket and milk processor had their own butter on the shelves and that was what most people bought. If someone needed unsalted butter they bought lurpak, otherwise they bought whatever was in front of them.

I might be wrong, but what is the actual market share of Irish butter in Germany?

Edit: OK I have answered my own question and I am at least partially wrong:

However, that German preference for Irish butter is not just a seasonal feature. Kerrygold is the number one butter brand in Germany, with an overall market share of 17%, and a share of over 50% of all branded sales — excluding the cheaper own brand products.

rangler1

Water John wrote: »

This though it's beef is a good move, premium product.

http://www.thejournal.ie/irish-beef-sellers-get-go-ahead-in-america-3453213-Jun2017/

This is Ireland's agricultural future. Part of the premium must find its way to the producer. That should be one other specific condition, since its the farmer, by his/her farming methods, puts the option of the premium, in place.

Is it not already at a premium, American beef was a good bit cheaper the last time I was there three years ago, what's it worth over there now

Farmer Ed

kowtow wrote: »

I'm not sure that the German butter industry is all that threatened by Kerrygold...

You often hear figures like "second biggest brand" or whatever but that ignores the fact that butter is typically a local or own brand product. Lurpak - for example - which used to be more or less the only unsalted butter in the UK would have been a big brand but not in terms of overall consumption, simply because every local supermarket and milk processor had their own butter on the shelves and that was what most people bought. If someone needed unsalted butter they bought lurpak, otherwise they bought whatever was in front of them.

I might be wrong, but what is the actual market share of Irish butter in Germany?

Edit: OK I have answered my own question and I am at least partially wrong:

https://www.google.ie/amp/s/www.irishtimes.com/business/agribusiness-and-food/copycats-aim-to-bite-into-kerrygold-share-of-german-butter-market-1.2576889%3Fmode%3Damp

Yes its one of our best markets. I don't how to go about putting a figure on how much per litre Kerrygold butter is worth to us at the moment but I just hope we don't find out the hard way.

alps

It's amazing really how some products have really exploded in demand and price, yet all the processor with their varied basket of goods, all pay relatively speaking much the same for milk...

Farmer Ed

alps wrote: »

It's amazing really how some products have really exploded in demand and price, yet all the processor with their varied basket of goods, all pay relatively speaking much the same for milk...

That is a very valid point. One would have though that butter producers for example would be in a much better position to up the price in comparison to let's say cheese producers for example? The rise has been in fat more than anything else.

Still can't figure why the value of fat has not been adjusted when calculating the milk price?

Farmer Ed

To put this in prospective. According to the latest GDT figures NZ butter sold for over €5000 per ton or over €5 per kg. Yet according to my milk statement the fat in my milk was valued at €2.71 per kg? Also bear in mind that that butter is only roughly 80% fat and the €2.71 price would then have the -c part of the A +b-c calculation deducted at the rate of 3.35c/l? Protein is being valued at €6.52 per kg.

I don't know what Kerrygold is selling for at the moment but I would have thought it would have been ahead of the GDT price?

kowtow

Water John wrote: »

This though it's beef is a good move, premium product.

http://www.thejournal.ie/irish-beef-sellers-get-go-ahead-in-america-3453213-Jun2017/

This is Ireland's agricultural future. Part of the premium must find its way to the producer. That should be one other specific condition, since its the farmer, by his/her farming methods, puts the option of the premium, in place.

It's going to be interesting to watch how Irish beef goes in the US on the back of that authorization.

Particularly interesting because - Irish beef is not "grass fed" in the strictest American sense. When Americans buy grass fed - which is a niche - the cattle are basically out the whole year rain & snow and eating hay. What Bord Bia have been allowed to do is call our beef - accurately - 80% grass fed with a minimum grazing time each year.

Which means that we will get some idea of the power of Ireland itself as a marketing tool. Will the grass fed purist switch to Irish beef from American? Or will the everyday buyer pay up for love of Ireland, and be grateful that it is pretty much grass fed as well?

I'm not sure what the price point will be compared to other products but there could be a lot of insights to be gained for other markets closer to home.

alps

Farmer Ed wrote: »

To put this in prospective. According to the latest GDT figures NZ butter sold for over €5000 per ton or over €5 per kg. Yet according to my milk statement the fat in my milk was valued at €1.76 per kg? Also bear in mind that that butter is only roughly 80% fat and the €1.76 price would then have the -c part of the A +b-c calculation deducted?

I don't know what Kerrygold is selling for at the moment but I would have thought it would have been ahead of the GDT price?

€1.76 is €1760 per tonne .....but that is for 4% of your milk....what you coop gets for the other 96% would have a significant impact on your overall price..

alps

You are severely underpaid at €1.76 per kg....many coops would be nearly double that...

Good spot...just saw the change..

whelan2

When is the next milk auction?

Farmer Ed

alps wrote: »

€1.76 is €1760 per tonne .....but that is for 4% of your milk....what you coop gets for the other 96% would have a significant impact on your overall price..

Sorry to clarify my first figure was incorrect I edited it when I coped on to my mistake. I think the figure is something like €2710 per ton for fat and something like €6500 per ton for protein - 3.3 c/l for volume. The question I am asking is simply this. Given the rise in the value of fat. Surely the formula for calculating milk price needs to be adjusted to reflect this?

This article really spells out how vulnerable those who have invested heavily in low end Cheddar are feeling at the moment. Even calls for government intervention! They can blame brexit if they want but brexit or no brexit. Butter is the thing keeping the show on the road at the moment.

http://m.independent.ie/business/farming/dairy/dairy-bosses-seek-state-support-on-500m-cheddar-trade-35842710.html?utm_content=buffere776a&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

Mooooo

kowtow wrote: »

It's going to be interesting to watch how Irish beef goes in the US on the back of that authorization.

Particularly interesting because - Irish beef is not "grass fed" in the strictest American sense. When Americans buy grass fed - which is a niche - the cattle are basically out the whole year rain & snow and eating hay. What Bord Bia have been allowed to do is call our beef - accurately - 80% grass fed with a minimum grazing time each year.

Which means that we will get some idea of the power of Ireland itself as a marketing tool. Will the grass fed purist switch to Irish beef from American? Or will the everyday buyer pay up for love of Ireland, and be grateful that it is pretty much grass fed as well?

I'm not sure what the price point will be compared to other products but there could be a lot of insights to be gained for other markets closer to home.

That's like how organic here is much stricter than organic in some other countries but the person buying will only see organic on the label

Buford T. Justice XIX

whelan2 wrote: »

When is the next milk auction?

Today. Down 0.8%

https://www.globaldairytrade.info/en/product-results/

Buford T. Justice XIX

The whole animal fats demand seems to have risen across the board.

http://www.agrimoney.com/feature/ribeye-prices-hit-record-as-quest-for-fat-spreads-to-meat-from-dairy--532.html

Farmer Ed

Buford T. Justice V wrote: »

The whole animal fats demand seems to have risen across the board.

http://www.agrimoney.com/feature/ribeye-prices-hit-record-as-quest-for-fat-spreads-to-meat-from-dairy--532.html

Yes fat is back. The question is when is the price formula that dictates how we are paid going to reflect that? As is stands with milk fat at least farmers are getting paid a return somewhere in the region of 50% of the wholesale value for their butter fat. Possibly the same case can also be made for how meat is graded?

pedigree 6

Buford T. Justice V wrote: »

The whole animal fats demand seems to have risen across the board.

http://www.agrimoney.com/feature/ribeye-prices-hit-record-as-quest-for-fat-spreads-to-meat-from-dairy--532.html

It's been one of the biggest crimes against humanity to have had Flora margarine being promoted as a healthy butter like spread when it's been the complete opposite and should be classed the same as smoking and come with a health warning. It lowers cholesterol on tests but it releases more free radicals in the body that cause cancer.

You want to live long. Drink full fat milk and eat butter not margarine and eat an egg everyday or maybe 5 times a week.

alps

Farmer Ed wrote: »

Buford T. Justice V wrote: »

The whole animal fats demand seems to have risen across the board.

http://www.agrimoney.com/feature/ribeye-prices-hit-record-as-quest-for-fat-spreads-to-meat-from-dairy--532.html

Yes fat is back. The question is when is the price formula that dictates how we are paid going to reflect that? As is stands with milk fat at least farmers are getting paid a return somewhere in the region of 50% of the wholesale value for their butter fat. Possibly the same case can also be made for how meat is graded?

If our fat payment rises, the protein price will fall....not sure if that's a good thing. It's not as straight forward as saying your fat % is higher than your protein.
We've bred for years to increase for protein and it has worked. I'm not sure how fast you can breed for fat...maybe you can feed for it...

Water John

Any product should have its price based on its constituent fraction price. It should be dynamic.
Have any of our farming orgs, got the skill set to calculate and track it?

Anyone remember the strike on 'ghost sugar'?

Farmer Ed

alps wrote: »

If our fat payment rises, the protein price will fall....not sure if that's a good thing. It's not as straight forward as saying your fat % is higher than your protein.
We've bred for years to increase for protein and it has worked. I'm not sure how fast you can breed for fat...maybe you can feed for it...

Agreed to a point. But the return to the farmers should reflect the return to the processor surely? And even with all our advances in increasing protein, usually that has also led to an increase in fat. Even going on the bog standard of 3.3p and 3.6f. That would suggest that on average milk contains .3% more f than p. So proportionately the increase in the value of fat is better news for us than an increase in the value of protein.