Milk Price III

alps

Water John wrote: »

Anyone remember the strike on 'ghost sugar'?

Do you mean Lactose?😎

Farmer Ed

alps wrote: »

Do you mean Lactose?😎

No I think he is referring to a different sprit. In the past farmers had a dispute with the sugar company. They were being paid for beet based on sugar levels but the sugar company were also able to get some sugar from the tops that they were not telling the farmer about.

But yes lactose is a good comparison. Ironic how its also a sugar.

Yes it would appear that sugar is not that good for us. Especially since they don't pay us for it. But ironically enough they can penalise us if it falls below a certain level. But its the same argument as why is fat not being properly paid for at the moment? And why is protein possibly being over paid for?

The reality is the way we are being paid for milk at the moment is not a like for like reflection on the value of the product being made with that litre of milk. That really is the issue no one has picked up on.

rangler1

Farmer Ed wrote: »

No I think he is referring to a different sprit. In the past farmers had a dispute with the sugar company. They were being paid for beet based on sugar levels but the sugar company were also able to get some sugar from the tops that they were not telling the farmer about.

But yes lactose is a good comparison. Ironic how its also a sugar.

Yes it would appear that sugar is not that good for us. Especially since they don't pay us for it. But ironically enough they can penalise us if it falls below a certain level. But its the same argument as why is fat not being properly paid for at the moment? And why is protein possibly being over paid for?

The reality is the way we are being paid for milk at the moment is not a like for like reflection on the value of the product being made with that litre of milk. That really is the issue no one has picked up on.

I think you're overthinking now, the price is the price, it's their opportunity to maximise the price to themselves.
Sounds a bit stupid to be giving out about the poor price of one constituent and then saying that another is being paid too much for, have you not copped on to one is balancing the other.
If I were to go by the flood of farmers both expanding and going into dairying around here I would say that the price of milk was too high and getting like the building boom in the early noughties .......but then apparently on here posters are saying it's not the same around the country.
'high prices cure high prices' so we'll wait and see

Farmer Ed

rangler1 wrote: »

I think you're overthinking now, the price is the price, it's their opportunity to maximise the price to themselves.
Sounds a bit stupid to be giving out about the poor price of one constituent and then saying that another is being paid too much for, have you not copped on to one is balancing the other.
If I were to go by the flood of farmers both expanding and going into dairying around here I would say that the price of milk was too high and getting like the building boom in the early noughties .......but then apparently on here posters are saying it's not the same around the country.
'high prices cure high prices' so we'll wait and see

The point I am simply making is this. If the mechanism used to determine the price paid to the farmer does not reflect the value of the end product. Then that formula is effectively rendered worthless. We might as well have flat rate milk pricing.

Actually coming to think about it. How is it that the formula pretty much similar for every co op? Surely for example a co op selling high volumes of liquid milk should not have the same -c value in their price calculation as say a co op using a higher percentage of milk going in to powder?

alps

Farmer Ed wrote: »

The point I am simply making is this. If the mechanism used to determine the price paid to the farmer does not reflect the value of the end product. Then that formula is effectively rendered worthless. We might as well have flat rate milk pricing.

Actually coming to think about it. How is it that the formula pretty much similar for every co op? Surely for example a co op selling high volumes of liquid milk should not have the same -c value in their price calculation as say a co op using a higher percentage of milk going in to powder?

The formula is actually very different in each coop. Liquid milk does not have the same value C, as the liquid is paid a per litre bonus, the formula for the liquid portion of supply ends up being paid for in an A+B+C basis...

Farmer Ed

alps wrote: »

The formula is actually very different in each coop. Liquid milk does not have the same value C, as the liquid is paid a per litre bonus, the formula for the liquid portion of supply ends up being paid for in an A+B+C basis...

Thanks didn't realise that. But still the lines between liquid and manufacturing milk are more blurred now days than in the past. The fat issue still remains. The price is not reflecting the true value that fat is now adding to the overall value of the litre of milk at the moment. Surely the formula used for determining milk price should track the market returns?

blue5000

rangler1 wrote: »

I think you're overthinking now, the price is the price, it's their opportunity to maximise the price to themselves.
Sounds a bit stupid to be giving out about the poor price of one constituent and then saying that another is being paid too much for, have you not copped on to one is balancing the other.
If I were to go by the flood of farmers both expanding and going into dairying around here I would say that the price of milk was too high and getting like the building boom in the early noughties .......but then apparently on here posters are saying it's not the same around the country.
'high prices cure high prices' so we'll wait and see

I think you are in an arable area? Probably got big land blocks around a yard, these guys also probably have a decent SFP which they can use to service the price of a parlour and cows. Barley and wheat prices have flat-lined. These guys I reckon have struggled to make ends meet since beet went. It's a no brainer really especially for ppl the right side of 40 with a family to rear.

4 lads have left my beef discussion group to milk cows in the last 2 years. So it's happening around here too, just that it's beef not tillage lads converting.

K.G.

blue5000 wrote: »

I think you are in an arable area? Probably got big land blocks around a yard, these guys also probably have a decent SFP which they can use to service the price of a parlour and cows. Barley and wheat prices have flat-lined. These guys I reckon have struggled to make ends meet since beet went. It's a no brainer really especially for ppl the right side of 40 with a family to rear.

4 lads have left my beef discussion group to milk cows in the last 2 years. So it's happening around here too, just that it's beef not tillage lads converting.

In our area more guys leaving than starting.tendency towards second units rather than start ups but now numbers in every yard pushing up.before you could say this guy s milking X cows but now you wouldnt have a clue.maybe it is bubble but the only guys that will survive are people that work hard and realise its all about the margin and low fixed costs

Mooooo

Farmer Ed wrote: »

Thanks didn't realise that. But still the lines between liquid and manufacturing milk are more blurred now days than in the past. The fat issue still remains. The price is not reflecting the true value that fat is now adding to the overall value of the litre of milk at the moment. Surely the formula used for determining milk price should track the market returns?

And so the protein will drop in price negating any increase in fat composition value. The fact that milk price has gone up is reflecting the market return as otherwise it would still be down as protein product is stagnant.

alps

Farmer Ed wrote: »

Thanks didn't realise that. But still the lines between liquid and manufacturing milk are more blurred now days than in the past. The fat issue still remains. The price is not reflecting the true value that fat is now adding to the overall value of the litre of milk at the moment. Surely the formula used for determining milk price should track the market returns?

Originally when the formula was introduced, it was envisaged that it would change to reflect market trends. You are correct in this..

However , it it is to correctly reflect product mix and costs, the c quotient would need to increase to around 6c.....that would create some noise.....

Farmer Ed

alps wrote: »

Originally when the formula was introduced, it was envisaged that it would change to reflect market trends. You are correct in this..

However , it it is to correctly reflect product mix and costs, the c quotient would need to increase to around 6c.....that would create some noise.....

Agreed but the current formula is not reflecting the returns on product mix. That really is the issue I suppose. Plus as i think you have quite rightly pointed out before. It is pretty incredible given the variation in product mix that the price difference between different co ops is not more?

Farmer Ed

Mooooo wrote: »

And so the protein will drop in price negating any increase in fat composition value. The fact that milk price has gone up is reflecting the market return as otherwise it would still be down as protein product is stagnant.

Why pay for apples when the market is paying for oranges? That really was always supposed to be the logic behind the price formula. Actually put another way. Our current management is currently very focused on protein. By simple changes in management we potentially improve fat content and it would be a win win for everyone. But the price needs to reflect the new reality.

alps

Farmer Ed wrote: »

. By simple changes in management we potentially improve fat.

How?

Only way I know of is to go into more fibrous, maybe higher covers, but any way of increasing fat that I know of, will decrease protein and yield

Farmer Ed

alps wrote: »

How?

Only way I know of is to go into more fibrous, maybe higher covers, but any way of increasing fat that I know of, will decrease protein and yield

Yes the scoury cow would need to be avoided to increase fat I would imagine. Higher covers and more fiber. I'm sure if the price reflected the market the technical details of how to manipulate the diet would be looked at more closely. That's the thing though. There currently is a good market for fat and by not reflecting this in the price. Is an opportunity being missed?

Farmer Ed

72c/l !!

http://www.agriland.ie/farming-news/five-things-the-irish-dairy-industry-could-learn-from-iceland/?utm_content=buffer036ad&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

Mooooo

Received 34.789 @ 3.57p and 3.78bf.
Base 32 cent

Keepgrowing

Mooooo wrote: »

And so the protein will drop in price negating any increase in fat composition value. The fact that milk price has gone up is reflecting the market return as otherwise it would still be down as protein product is stagnant.

Will you stop wasting your time explaining that

Farmer Ed

Keepgrowing wrote: »

Will you stop wasting your time explaining that

Actually based on Moo's fat and protein levels he is producing more fat KGs than protein KGs so like most farmers would stand to gain more by having the Fat part of his milk properly valued.

alps

Farmer Ed wrote: »

Keepgrowing wrote: »

Will you stop wasting your time explaining that

Actually based on Moo's fat and protein levels he is producing more fat KGs than protein KGs so like most farmers would stand to gain more by having the Fat part of his milk properly valued.

Ed..that's an incorrect assumption....and until fat returns more than protein (which it doesnt) your reasoning is doubtful..

We are being paid what we are being paid for the current product mix. If our fat is going to rise in price., then the protein will fall a corresponding amount and milk will still be at 32c.
The only way you can then lift you milk price is to lift your fat %...A very difficult thing to do....
End of lactation will do that, but it also rises protein so no great advantage. We can however influence the protein% quiet considerably with the quality of grass we feed.

You could of course change to a pure jersey herd, but by the time you have changed....phat may again be a 4 lettered word....

Farmer Ed

alps wrote: »

Ed..that's an incorrect assumption....and until fat returns more than protein (which it doesnt) your reasoning is doubtful..

We are being paid what we are being paid for the current product mix. If our fat is going to rise in price., then the protein will fall a corresponding amount and milk will still be at 32c.
The only way you can then lift you milk price is to lift your fat %...A very difficult thing to do....
End of lactation will do that, but it also rises protein so no great advantage. We can however influence the protein% quiet considerably with the quality of grass we feed.

You could of course change to a pure jersey herd, but by the time you have changed....phat may again be a 4 lettered word....

Why then is butter that is only 80% fat returning more over €5 per kg to the processor and possibly a lot more and yet we are only being paid only €2.70 for pure 100% butterfat?

If you are correct in saying it doesn't really matter how the price is calculated as we will still only get the same amount. Then why bother at all with being paid on solids and just revert back to a flat rate milk price? In effect if the milk price does not reflect the return to the processor, then that is the argument you are making.

To put this in prospective if butter is 80% fat and returning €5 per kg. That is the equivalent of 21.6 cent per litre before processing costs just for the fat portion of the milk alone. based on just 3.6 fat. Are you saying that protein is still returning 2.5 times more than butter?

alps

Farmer Ed wrote: »

Why then is butter that is only 80% fat returning more over €5 per kg to the processor and possibly a lot more and yet we are only being paid only €2.70 for pure 100% butterfat?

If you are correct in saying it doesn't really matter how the price is calculated as we will still only get the same amount. Then why bother at all with being paid on solids and just revert back to a flat rate milk price? In effect if the milk price does not reflect the return to the processor, then that is the argument you are making.

The price may not exactly reflect the return to the individual parts to the processor....but you have to realise that the butter quotient that you keep on about only amounts to 80% of 4% of to the litre of milk you supply.....that 3.2% if your litre returns €5000 per tonne.....

How much is the other 96.8% of your litre bringing the price down by..?

Farmer Ed

alps wrote: »

The price may not exactly reflect the return to the individual parts to the processor....but you have to realise that the butter quotient that you keep on about only amounts to 80% of 4% of to the litre of milk you supply.....that 3.2% if your litre returns €5000 per tonne.....

How much is the other 96.8% of your litre bringing the price down by..?

That is not correct approximately 88% of milk is water regardless of what product you make of it. Lactose makes up over one third of the solids and as you have already eluded to we don't get paid for that. So that just leaves us with the fat and protein. Butter is approximately 80% fat the remaining 20% is just water and some protein solids that remained after separation and churning. So in effect when butter is made from milk, it accounts for well over 50% of the milk solids we are actually paid for. At €5000 per ton to the processor that is a return of 21.6 cent per litre to the processor just for the fat part of your litre of milk alone. Now if the current formula is correct as you are suggesting and protein is still worth 2.5 times more than fat. Then we are being seriously being under paid for milk.

mahoney_j

Farmer Ed wrote: »

That is not correct approximately 88% of milk is water regardless of what product you make of it. Lactose makes up over one third of the solids and as you have already eluded to we don't get paid for that. So that just leaves us with the fat and protein. Butter is approximately 80% fat the remaining 20% is just water and some protein solids that remained after separation and churning. So in effect when butter is made from milk, it accounts for well over 50% of the milk solids we are actually paid for. At €5000 per ton to the processor that is a return of 21.6 cent per litre to the processor just for the fat part of your litre of milk alone. Now if the current formula is correct as you are suggesting and protein is still worth 2.5 times more than fat. Then we are being seriously being under paid for milk.

Ed do u attend any arrabawn area meetings or agm??have u made any attempt to run for board or representative committee???with all your questions and conspiracy theories here I'd hope your bombarding Conor and co at meetings and asking awkward questions at board meetings ..........I've served on Rep committee and attend the agm and area meetings whenever on ,never heard any of questions asked that u pose here .

Farmer Ed

mahoney_j wrote: »

Ed do u attend any arrabawn area meetings or agm??have u made any attempt to run for board or representative committee???with all your questions and conspiracy theories here I'd hope your bombarding Conor and co at meetings and asking awkward questions at board meetings ..........I've served on Rep committee and attend the agm and area meetings whenever on ,never heard any of questions asked that u pose here .

Yes I have been at area meetings and yes I know Conor and I have good time for the man. His modest work like style is to very much to be admired. He doesn't seek headlines. He just gets on about his business. Personality I have done more for the development of Arrabawn than you realise and if you ask Conor, I am sure he will confirm that for you. I fail to see how my question has anything to do with that or how it could be considered a conspiracy theory or why you seem to take such offence from the question being asked?

The question I am posing here is one that has just become topical as a result of the increase in the price of fat. And its simply this? Why is the new reality of fat having a greater value again not being reflected in the milk price calculation formula? Clearly the current market returns of double the price we are being paid for fat, should be taken in to account and the formula revised accordingly? Clearly the fat content of the milk is no longer worth 2.5 times less than the protein content?

I totally get the argument of " we might end up with the same milk price and it doesn't really matter" . But OK if that is a valid argument. Why then just not save on the bother of milk testing at all and just pay a flat rate milk price? If the price formula is not reflecting the market. In effect that is the reality of the situation and we are not being paid properly for what the market is looking for at the moment. The other argument is, sure it doesn't matter really how the price is formulated as long as the money is divided out and everyone gets their fair share.

mahoney_j

Farmer Ed wrote: »

Yes I have been at area meetings and yes I know Conor and I have good time for the man. His modest work like style is to very much to be admired. He doesn't seek headlines. He just gets on about his business. Personality I have done more for the development of Arrabawn than you realise and if you ask Conor, I am sure he will confirm that for you. I fail to see how my question has anything to do with that or how it could be considered a conspiracy theory or why you seem to take such offence from the question being asked?

The question I am posing here is one that has just become topical as a result of the increase in the price of fat. And its simply this? Why is the new reality of fat having a greater value again not being reflected in the milk price calculation formula? Clearly the current market returns of double the price we are being paid for fat, should be taken in to account and the formula revised accordingly? Clearly the fat content of the milk is no longer worth 2.5 times less than the protein content?

I totally get the argument of " we might end up with the same milk price and it doesn't really matter" . But OK if that is a valid argument. Why then just not save on the bother of milk testing at all and just pay a flat rate milk price? If the price formula is not reflecting the market. In effect that is the reality of the situation and we are not being paid properly for what the market is looking for at the moment. The other argument is, sure it doesn't matter really how the price is formulated as long as the money is divided out and everyone gets their fair share.

Have u made attempts to get on rep committee ??,if u have don't see why u weren't elected (maby u are )as u ask so many questions and make so many statements here some of these should be discussed at that level ,on ur point re fat and payement etc moo in an earlier post explained it clear as day and that is also my take

Farmer Ed

mahoney_j wrote: »

Have u made attempts to get on rep committee ??,if u have don't see why u weren't elected (maby u are )as u ask so many questions and make so many statements here some of these should be discussed at that level ,on ur point re fat and payement etc moo in an earlier post explained it clear as day and that is also my take

You are perfectly entitled to your opinion as I am. But I would urge you to try and evaluate the situation before taking offence. If farmers are happy enough to have the money divided out any old way and not track what the market is looking for. Fair enough.

On the subject of the high moral ground and Arrabawn. I fail to see how dragging that in to this conversation has anything to do with anything? Can I remind you that as others were having wet dreams about being taken over by larger co ops. Some even continued sleep walking and brought in to the big is beautiful idea and probably just waking up from their dreams right about now. I actually did something proactive that helped Arrabawn in a way that Conor might be able to explain to you, but I certainty won't attempt to do.

K.G.

Well dan mac is retiring from carbery and just like to acknowlage his contribution to the farmers of west cork .

Farmer Ed

K.G. wrote: »

Well dan mac is retiring from carbery and just like to acknowlage his contribution to the farmers of west cork .

100% credit where credit is due. Their performance consistently been ahead of the field. Hope his replacement who ever he is can emulate his performance.

Water John

It's funny, 30 and more years ago, cheese was doing poorly. Carbery were always heavily reliant on cheese. They paid a leading price then. We were being told that they would fall flat and be delighted to be taken over by their larger neighbours.
There still paying a leading price. Cheese is again doing poorly.
Well done Dan Mc and Team. Wish Dermot and Co pick someone near as good. Keep Dan on a consultative capacity.

kowtow

alps wrote: »

Ed..that's an incorrect assumption....and until fat returns more than protein (which it doesnt) your reasoning is doubtful..

We are being paid what we are being paid for the current product mix. If our fat is going to rise in price., then the protein will fall a corresponding amount and milk will still be at 32c.
The only way you can then lift you milk price is to lift your fat %...A very difficult thing to do....
End of lactation will do that, but it also rises protein so no great advantage. We can however influence the protein% quiet considerably with the quality of grass we feed.

You could of course change to a pure jersey herd, but by the time you have changed....phat may again be a 4 lettered word....

Or you could have some of my 4+% black & white girls.

Although I'm not sure how they got like that.