Glanbia's new winter milk ,liquid contract Scheme

Mortelaro

mahoney_j wrote: »

Spread workload and take a massive pressure point away from spring will also allow every cow to be milked to 300/310 days ,more milk and more milk solids sold .infrastructure all in place it will also allow me make better use (and hold onto )the guy I already have .

Lots to think about
Feb to Xmas is 300+ days
But being Autumn you've the flexibility to move late spring calved to Autumn milk and milk them beyond 310 days if theyre late in calf
These are problem cows though so against that they should be culled which is also money when you've adequate replacements
This is the first year ever I didn't have cows out in February and most of March
So not a good year as a template to decide on this

stretch film

mahoney_j wrote: »

Not changing simply adding ,decision will be made on strength and volume of contract offered

Fair enough.
In 25 yrs supplying liquid I've only seen erosion of premium and liquid contract held as a collective.
The most organised bunch of liquid suppliers in the country are unable to halt quota and price cuts.
Their processor is as plain as day saying its not turning anything on own brand and will pursue other winter products through its manufacturing arm.
Naturally at a reduced amount of money ending up in farmers pockets compared to the original liquid quotas held.

Calving in August Sept has its own cost .
Mid Oct to early Dec calving means a breeding season coinciding with the spring flush of work.
More groups= more jobs (work) any day of the year.

I agree on the value of being able to give cows fuller lactations and actually you'll get great milk out of your empties.

stretch film

whelan2 wrote: »

I calve around 45 in the autumn all outside weather permitting, bought in an extra 8 fresh calved ones too. Calved 125 last spring and it near killed me. Autumn calving is so much more relaxed for me anyway.

Joe Patton would say you pay a big price for the luxury of doing it as early as you do.
Leaving calf health aside do you need to increase mikk production that early in autumn to meet quota .

yewtree

mahoney_j wrote: »

Spread workload and take a massive pressure point away from spring will also allow every cow to be milked to 300/310 days ,more milk and more milk solids sold .infrastructure all in place it will also allow me make better use (and hold onto )the guy I already have .

I never got the idea of moving a % of cows out of spring calving. When cows are calving compactly it is the same difference to calve 7 as 5/ day. Good facilities are key obviously.
Have been offered different winter schemes over the years by coop, but they were only for a fixed number of years and the volumes were too small to bother with.
Another issue is the pricing of late latactation milk, lads with good solids will be in the low 40s now. If that milk is been used to fill a liquid contract on a flat price you are giving the milk at a discount to the coop. It looks like most like prices will be 38-40 cent this year

Mortelaro

You get paid for your solids on your liquid contract
I've had 52c/l for liquid when solids are high
Late lactation 60% of the herd helping
To get that in October and November albeit in a good price year makes liquid milk a good proposition

whelan2

stretch film wrote: »

Joe Patton would say you pay a big price for the luxury of doing it as early as you do.
Leaving calf health aside do you need to increase mikk production that early in autumn to meet quota .

Mostly labour. Here most of the time on my own. No bedding for calving etc. Will probably move it on a week or 2 this year. Fresh cows are milking well off grass. None housed yet

yewtree

Mortelaro wrote: »

You get paid for your solids on your liquid contract
I've had 52c/l for liquid when solids are high
Late lactation 60% of the herd helping
To get that in October and November albeit in a good price year makes liquid milk a good proposition

That's only in Glanbia not all coops have the same payment structure.

Keepgrowing

MJ
I’d totally agree that WM should be considered very seriously for many reasons including the developing issue is seasonal peak.

The only caution I’d make if being allocated contract is that you get a commitment that volumes and bonus won’t be cut for 5 year periods.

The nature of the liquid market is such that there’s a bloodbath every time major supermarket contracts are up for tender. This is fine from a commercial POV but never serves the primary producer.

Liquid contracted farms supplying Glanbia have taken a 5% haircut on volumes due to this.

Lastly, any analysis of farm profitability will always put WM ahead spring milk from a profitability view point.

Mortelaro

Keepgrowing wrote: »

The nature of the liquid market is such that there’s a bloodbath every time major supermarket contracts are up for tender. This is fine from a commercial POV but never serves the primary producer.

Liquid contracted farms supplying Glanbia have taken a 5% haircut on volumes due to this.

.

Cuts both ways
2 years ago liquid contracts in glanbia were increased thanks to an increase in liquid sales

The new deal effectively is a 5 year contracted supply with a 3 year review so although I haven't seen the contract yet,must mean a contracted supply figure for at least 3 years

It seems bonus wise also to be on a par with the current contract with the summer element gone fully into the winter 6 months

atlantic mist

do liquid lads not have a quota - was it not 15 euro a litre to buy not so long ago, how can they drop quota, who compensates for loss of quota?

i thought the way they were structuring the liquid suppliers when they lost the big contract (after only building a new bottling plant) was to direct their milk to consumer foods products which reduced the allocation us winter and spring suppliers had.

easy to improve competitiveness in local milk market just ban selling to supermarket own branded products across the board. highlight any supermarket importing to meet own branded products, all our processors sit around the table at ornua meetings tis easy done if they put their heads together, they seem to have no problem dealing with each other when they want to shift raw milk around but seem to have a big issue when it comes to selling the finished product

Timmaay

mahoney_j wrote: »

Spread workload and take a massive pressure point away from spring will also allow every cow to be milked to 300/310 days ,more milk and more milk solids sold .infrastructure all in place it will also allow me make better use (and hold onto )the guy I already have .

And your 100% sure you'll be hanging onto that guy for like the next few years? Zero fun at all if you went all the effort of winter milk and ended up having to do most it yourself? What your plan B in that case? (just asking the question ha!)

Mooooo

Keepgrowing wrote: »

MJ
I’d totally agree that WM should be considered very seriously for many reasons including the developing issue is seasonal peak.

The only caution I’d make if being allocated contract is that you get a commitment that volumes and bonus won’t be cut for 5 year periods.

The nature of the liquid market is such that there’s a bloodbath every time major supermarket contracts are up for tender. This is fine from a commercial POV but never serves the primary producer.

Liquid contracted farms supplying Glanbia have taken a 5% haircut on volumes due to this.

Lastly, any analysis of farm profitability will always put WM ahead spring milk from a profitability view point.

Just on your last point, what caveats would you put on that, level of bonus etc?

blackdog1

whelan2 wrote:

Mostly labour. Here most of the time on my own. No bedding for calving etc. Will probably move it on a week or 2 this year. Fresh cows are milking well off grass. None housed yet

I was just about to say its easy for Joe to talk when teagasc regularly could have up to 6 lads minding a 150 cow herd. Seasonal labour is nearly impossible to find. Most young lads prefer to sit infront of a computer instead of earning a few pound.

stretch film

blackdog1 wrote: »

I was just about to say its easy for Joe to talk when teagasc regularly could have up to 6 lads minding a 150 cow herd. Seasonal labour is nearly impossible to find. Most young lads prefer to sit infront of a computer instead of earning a few pound.

A general comment ...most liquid farms have increased their spring calving portion so early calving only dilutes the value of this milk if the volumes are already being met.
If a small quota is present that optimum date gets pushed deeper into the winter.
Never mind the extra unnecessary costs

yewtree

stretch film wrote: »

A general comment ...most liquid farms have increased their spring calving portion so early calving only dilutes the value of this milk if the volumes are already being met.
If a small quota is present that optimum date gets pushed deeper into the winter.
Never mind the extra unnecessary costs

Talking to a few lads in my group who have left liquid milk production in my DG and one of the main drivers was as the spring business expanded their quota remained static so as a proportion total of turn over the liquid bonus was very small. it came to a point that the extra work calving a few cows in winter wasn't worth the hassle. liquid works well where there is a bit of scale and there is a worthwhile bonus.
winter milk farmers should be huge advocates of tight spring calving systems so the vast majority of lads will dry off and create a shortage of high quality milk in December and January. At least then it might make coops commit to their winter milk suppliers. at the moment their is ever increasing amounts of uncontracted milk produced in January and December

stretch film

yewtree wrote: »

Talking to a few lads in my group who have left liquid milk production in my DG and one of the main drivers was as the spring business expanded their quota remained static so as a proportion total of turn over the liquid bonus was very small. it came to a point that the extra work calving a few cows in winter wasn't worth the hassle. liquid works well where there is a bit of scale and there is a worthwhile bonus.
winter milk farmers should be huge advocates of tight spring calving systems so the vast majority of lads will dry off and create a shortage of high quality milk in December and January. At least then it might make coops commit to their winter milk suppliers. at the moment their is ever increasing amounts of uncontracted milk produced in January and December

Worse again lads calving in autumn without contracts at all.

mahoney_j

stretch film wrote: »

Worse again lads calving in autumn without contracts at all.

I know of 2 farmers that are supplying liquid milk on contract for last 2winters but no more,they are still calving a winter block but they would of and will this winter got more at the seasonal base plus solids simply because they had excellent solid components the contract it’s volume, timeframe are crucial considerations before taking the plunge .i still have my doubts and above scenario would apply to me ,final decision will all boil down to what and how much is offered

whelan2

Anyone go to the local meetings yet. No word of our one

whelan2

Meeting on here tonight. Fmp don't have a recent list of members so if you're waiting on notification they might not have your number. Might be worth contacting local milk advisor.

Mortelaro

Glanbia collect a sub from every Fmp member so they should look for that list and an up to date contact number off Glanbia
Its not rocket science
Haven't been to a meeting yet,it is pretty much as said on here from talking to others who have
Be interesting to hear what is said at your meeting Whelan2

whelan2

Very informative meeting. Letters will go out to each supplier next week of their individual figures. Glanbia rep will call to each farm to discuss.

whelan2

They were saying last night that there's lads calving in the autumn that are not in any scheme. Liquid or winter. Why would you bother?

stretch film

whelan2 wrote: »

They were saying last night that there's lads calving in the autumn that are not in any scheme. Liquid or winter. Why would you bother?

"Cashflow" :rolleyes:

whelan2

stretch film wrote: »

"Cashflow" :rolleyes:

But the margin must be very small.

Mortelaro

whelan2 wrote: »

But the margin must be very small.

Older farmers mainly
None of the new entrants I know are interested in winter milk schemes (yet)
That says a lot
But it has been an undermining situation that dairies have been able to get lots of milk at cut price like that
Why pay the farmer a fair margin when enough will produce for little reward?
We are our own worst enemy

If you have the milking block,your cow should give the same milk no matter what 9 months she milks
So the farmer has 2 questions
Can he/she pay him/herself a living wage after costs from spring milk and does 8c affray extra winter costs (8c on allowed volume at that)

jaymla627

Mortelaro wrote: »

Older farmers mainly
None of the new entrants I know are interested in winter milk schemes (yet)
That says a lot
But it has been an undermining situation that dairies have been able to get lots of milk at cut price like that
Why pay the farmer a fair margin when enough will produce for little reward?
We are our own worst enemy

If you have the milking block,your cow should give the same milk no matter what 9 months she milks
So the farmer has 2 questions
Can he/she pay him/herself a living wage after costs from spring milk and does 8c affray extra winter costs (8c on allowed volume at that)

Different way of looking at is, with massive capitial investment after occurring on farm be it parlours/cubicles etc, diluting these fixed costs over more litres per cow with a longer lactation, financially makes sense once you can keep feed costs under control, and maintain good production per cow....
It gets rehashed every year but any cows milking here over the winter months are usually leaving 4 euro a day after all feed and associated milking costs are covered, lads sneering about cash-flow and how you’d have a nest-egg if you where doing the spring calving job right are a lot quieter this year, the Teagasc podcast advising to leave non-essential creditors swinging for money till next summer was hard to take in

Mooooo

Could have your longer lactation by finishing calving in March, but may end up paying for it in higher replacement rate. Are there many people that only have a 10/11 week calving period?

stretch film

jaymla627 wrote: »

Different way of looking at is, with massive capitial investment after occurring on farm be it parlours/cubicles etc, diluting these fixed costs over more litres per cow with a longer lactation, financially makes sense once you can keep feed costs under control, and maintain good production per cow....
It gets rehashed every year but any cows milking here over the winter months are usually leaving 4 euro a day after all feed and associated milking costs are covered, lads sneering about cash-flow and how you’d have a nest-egg if you where doing the spring calving job right are a lot quieter this year, the Teagasc podcast advising to leave non-essential creditors swinging for money till next summer was hard to take in

Difference in milking on spring calvers and calving in autumn for no premium which was the original comment

Timmaay

jaymla627 wrote: »

lads sneering about cash-flow and how you’d have a nest-egg if you where doing the spring calving job right are a lot quieter this year, the Teagasc podcast advising to leave non-essential creditors swinging for money till next summer was hard to take in

I really don't see how being in spring or all year around will make the dam of a different if you have big merchant bills racking up, the only difference with ayr is that you'll be able to pay them off a small bit of a time month by month but they will still be there. The reality is both systems do work, the spring only in general leaves more margin per litre, but will deliver less per cow, however require less workload, in both systems you need a rainy day fund, whether that be simply a cash reserve, putting off investment (which I did this winter by not building a planned shed), or likes of going interest only or stretching out a mortgage (this only only as a last resort tho!). I'm very happy here moving to spring only, only ending up with 10k total across the jan/Feb cheques, and the significantly lower overall workload as a result. I could of stuck with the HOs and split calving but I'd have to be jumping alot higher for very little financial benefit, and definitely more work.

Mortelaro

Timmaay wrote: »

I really don't see how being in spring or all year around will make the dam of a different if you have big merchant bills racking up, the only difference with ayr is that you'll be able to pay them off a small bit of a time month by month but they will still be there. The reality is both systems do work, the spring only in general leaves more margin per litre, but will deliver less per cow, however require less workload, in both systems you need a rainy day fund, whether that be simply a cash reserve, putting off investment (which I did this winter by not building a planned shed), or likes of going interest only or stretching out a mortgage (this only only as a last resort tho!). I'm very happy here moving to spring only, only ending up with 10k total across the jan/Feb cheques, and the significantly lower overall workload as a result. I could of stuck with the HOs and split calving but I'd have to be jumping alot higher for very little financial benefit, and definitely more work.

Taking the restructuring and getting 10k for your liquid contract is a no brainer for you given you've already nearly fully switched
Add it to the volatility fund and use next winters 6c restructuring premium to finally get the last out of any late calved you have before selling them
After 2020 you're free to stop milking for 8 winter weeks or so as all bonuses end
But do use the transition bonuses if it makes financial sense while theyre there