Milk Price III

kowtow

Farmer Ed wrote: »

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.

I think what people are trying to say is that if you wish to be paid properly for your fat kg, you might have to hold on to the protein yourself and do with it what you will.

Presumably the nearest proxy for a protein price is SMP? 2000 Euro per tonne at 1.25% butterfat (which is some of the cream gone). Given the cost of drying what does that give you per litre?

Or am I confused?

Farmer Ed

kowtow wrote: »

I think what people are trying to say is that if you wish to be paid properly for your fat kg, you might have to hold on to the protein yourself and do with it what you will.

Presumably the nearest proxy for a protein price is SMP? 2000 Euro per tonne at 1.25% butterfat (which is some of the cream gone). Given the cost of drying what does that give you per litre?

Or am I confused?

Exactly. But I don't think anyone is suggesting that to be fair. But there are other uses for protein in spite of all the hype about state of the art drying plants, SMP is probably just one step away from feeding skim to pigs.

However surely it is not unreasonable that the milk price calculation shouldn't reflect the true return form the end product? Otherwise farmers are just being encourage not to produce what the market wants?

Farmer Ed

Ball park figures smp is around 35% protein 50% lactose and 1% fat in about 96% total solids. Note fat level almost non existent as it is measured on a dry matter basis as apposed to whole milk.

Farmer Ed

This is a very rough estimate but ball park , skim at 2000 per ton is returning somewhere in the region of 20c/l and butter at 5000 per ton 22 cent per litre give or take. Total return to the co op before processing costs 42c/l. But to be fair I doubt if many are selling of that much product as skim? But equally it shows the value of fat in the current product mix. Can't see how fat can be valued at 2.5 times less than protein ?

Water John

Am I right so in thinking 20 litres of milk could give 1kg butter and 2 kg SMP?

So the 20 litres makes €5 +(€2 x 2)4 = €9

9/20 = 45 cent/litre
Processing cost 6 cent
Net 39 cent/litre

The Processing cost is probably a t bit higher now.

Anything wrong with my sums and assumptions?

Ha! Ed, fools seldom differ. We were both looking at this at the same time. Near enough in conclusion.

Farmer Ed

Water John wrote: »

Am I right so in thinking 20 litres of milk could give 1kg butter and 2 kg SMP?

So the 20 litres makes €5 +(€2 x 2)4 = €9

9/20 = 45 cent/litre
Processing cost 6 cent
Net 39 cent/litre

The Processing cost is probably a t bit higher now.

Anything wrong with my sums and assumptions?

Ha! Ed, fools seldom differ. We were both looking at this at the same time. Near enough in conclusion.

My figure's are a bit rough. Will be the fist to admit that. But even rough as they are, it just gives you an idea of what kind of returns we are looking at.

Honestly not sure what processing costs are but the - c part of the a+ b- c calculation is something over 3 cent. So I'm guessing that is the drying and transport cost of the water element of the milk?

whelan2

Isnt it amazing how farmer ed and water john always seem to agree and thank each other

Farmer Ed

whelan2 wrote: »

Isnt it amazing how farmer ed and water john always seem to agree and thank each other[/quote

As John said fools seldom differ.
Actually we were 3 cent off in our calculations. But still it is no harm to look at how our milk is paid for. It is a milk price thread after all.

Your obviously easily amazed.

Water John

Whelan, enjoy your trip to France. Don't forget to order, la lait frois, with your tea. Support the farmer, home or abroad.

alps

I can't believe the Barryroe bonus payment from Carbery, of 1c/l, being dependent on the supplier buying inputs through the coop equating to 8c/l..

Did the journal get that correct?

FFS.....8c/l would nearly equate to your total variable costs.....

Have west cork farmers let this happen?

Water John

Don't know Alps. This was floated by a number of the processors around the time of, end of quotas. Drinagh, I know floated it.
Of the 4 West Cork Coops, Barryroe tends to be the most bolshoi. When the quota transfer issue from Lee Strand cropped up, Lisavard acted. Barryroe farmers, who asked questions were told, to go home and milk your cows.

Some of the floated ties would have meant a very high % on fertiliser and ration. Should be challenged, in court if necessary.
IFA challenged this strongly in the late 1960s when the Irish Sugar Company tied the purchase to inputs to the purchase of the sugar beet. It was a fight that was won.

Farmer Ed

alps wrote: »

I can't believe the Barryroe bonus payment from Carbery, of 1c/l, being dependent on the supplier buying inputs through the coop equating to 8c/l..

Did the journal get that correct?

FFS.....8c/l would nearly equate to your total variable costs.....

Have west cork farmers let this happen?

I wonder what the competition authority would have to say about this? I'm not talking about the Irish competition authority, we all know what they would say. I'm talking about Europe? It may have to come to that. I could see private merchants in the west cork area challenging this. Totally anti competitive!

Water John

Well, Barryroe seem to have no problem selling inputs to farmers supplying other coops with milk.
Such ideas could come back to bite them.

Brown Podzol

IFCN milk price prediction.


http://mobile.dairyreporter.com/R-D/IFCN-conference-looks-at-milk-price-cycle?utm_content=bufferd9afa&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Water John

I think most people would accept a stable price. As long as the farmer is getting his , fair share.

Buford T. Justice XIX

100T of skim sold out of intervention this week, stocks were 18m old.

http://www.farmersjournal.ie/100t-of-smp-sold-out-of-intervention-287873

Just the start, I hope. There will be more demand for skim now that the sale has started.

Farmer Ed

Buford T. Justice V wrote: »

100T of skim sold out of intervention this week, stocks were 18m old.

http://www.farmersjournal.ie/100t-of-smp-sold-out-of-intervention-287873

Just the start, I hope. There will be more demand for skim now that the sale has started.

As someone already mentioned here a lot of the older product could even be out of date already so in effect will not help flood the market as it will not be used for human consumption. A lot of cheese for example was given away for free last year before it ran out of date.

On the other hand someone will have to pick up the cost of having to dump it. So I'm not sure how that will work out? It would also appear that skim is only being made as a last resort as it is one of the lowest returning commodity's at the moment.

Buford T. Justice XIX

Interesting article in the Journal on Friesland-Campina milk prices. Fat at €3 a kilo and protein at €6 a kilo.

http://www.farmersjournal.ie/dutch-co-op-frieslandcampina-lifts-its-july-milk-price-288515

Water John

That's a simple 2:1 price ratio. The premium of 35% for organic looks interesting.

whelan2

What's the story with the on/off protest by fmp on Dunnes stores?

Keepgrowing

whelan2 wrote: »

What's the story with the on/off protest by fmp on Dunnes stores?

IFA: Liquid Milk Protest Friday 30th June Portlaoise cancelled as top level meeting with Dunnes secured

blue5000

Keepgrowing wrote: »

IFA: Liquid Milk Protest Friday 30th June Portlaoise cancelled as top level meeting with Dunnes secured

Does this mean I won't be able to buy 6L for €4 anymore?:(

Buford T. Justice XIX

blue5000 wrote: »

Does this mean I won't be able to buy 6L for €4 anymore?:(

No but it's being replaced by 20kg of sirloin/fillet steak for 2.99:p

Water John

And free lamb barbeque, courtesy of Rangler.

Buford T. Justice XIX

GDT quarterly bulletin.

https://www.globaldairytrade.info/assets/Uploads/resources/GDT-Quarterly-June-2017-final-v3.pdf

Buford T. Justice XIX

Futures market predicting a drop in GDT tomorrow. WMP expecting a fall and market surprised by EU selling skim at less than €2k.

http://www.farmersjournal.ie/dairy-markets-milk-powder-market-softens-ahead-of-this-week-s-gdt-290103

hatrickpatrick

Seeing as this has been in the news lately, out of interest how much would dairy farmers regard as a reasonable end-price in the supermarket, from their own point of view? I tend to buy semi skimmed "super milk" at e2 for a 1.75L carton (think this used to be 2L in the past but supermarkets have gone with shrinkflation, IE reduce product size rather than increase price) - is this reasonable for dairy farmers, and if not, in an ideal world how much would end-consumers be paying?

freedominacup

hatrickpatrick wrote: »

Seeing as this has been in the news lately, out of interest how much would dairy farmers regard as a reasonable end-price in the supermarket, from their own point of view? I tend to buy semi skimmed "super milk" at e2 for a 1.75L carton (think this used to be 2L in the past but supermarkets have gone with shrinkflation, IE reduce product size rather than increase price) - is this reasonable for dairy farmers, and if not, in an ideal world how much would end-consumers be paying?

We're getting around 55 cent for that 1.75litres. On that basis I'd love to see you paying around 2.70 if my pro rata payment would go to 70 cent for 1.75l. This never happens though. You tell me what you think the rest of the chain between my bulk tank and your shopping basket should be taking. I find it hard to see how a process that actually strips value from my product justifies such a markup.

mf240

freedominacup wrote: »

We're getting around 55 cent for that 1.75litres. On that basis I'd love to see you paying around 2.70 if my pro rata payment would go to 70 cent for 1.75l. This never happens though. You tell me what you think the rest of the chain between my bulk tank and your shopping basket should be taking. I find it hard to see how a process that actually strips value from my product justifies such a markup.

If it's semi skimmed its less than 2% fat so it would be also making butter .

I agree there is little or no corelation between farm gate price and shop shelf price.

whelan2

mf240 wrote: »

If it's semi skimmed its less than 2% fat so it would be also making butter .

I agree there is little or no corelation between farm gate price and shop shelf price.

What % ends up on the shop shelf though