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Milk Price- Please read Mod note in post #1

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Comments

  • #9092
    OverRide
    Closed Accounts Posts: 665 ✭✭✭OverRide


    kevthegaff wrote: »
    I'd imagine the banks would Red mark you too

    Ah no,not really,banks look at interest only,once you come to them first,as a facility
    At any rate if a loan is so big,that interest only was going to be the makings or breakings of a farm,that enterprise shouldn't be looking for any more loans but rather looking at preparing their business for going back to cap and interest so there's no need to concern oneself with a bankers notes
    Currently by the way,deals are being done on interest only up to 3 years,so if anyone here needs that,go in and discuss,have your plans all done out and do it


  • #9093
    kevthegaff
    Registered Users, Registered Users 2 Posts: 7,084 ✭✭✭kevthegaff


    The question is what will interest rate be in 3 yrs also the principle will be the same. Thats all and good if milk price follows inflation. I wonder with brexit/EU will inflation. Stand still. With current prices may be a good thing


  • #9094
    whelan2
    Registered Users, Registered Users 2 Posts: 30,788 ✭✭✭✭whelan2


    At least these people are realising there is a problem and going interest only.


  • #9095
    Farmer Ed
    Banned (with Prison Access) Posts: 4,617 ✭✭✭Farmer Ed


    kevthegaff wrote: »
    The question is what will interest rate be in 3 yrs also the principle will be the same. Thats all and good if milk price follows inflation. I wonder with brexit/EU will inflation. Stand still. With current prices may be a good thing

    Im sorry for repeating myself but on the point of milk price following inflation. £1.06 per gallon in 1989 would be 66cl today had milk price followed inflation. That I believe is the real elephant in the room. We are increasingly heading in the same direction as coffee bean producers if this problem is not addressed,


  • #9096
    Water John
    Registered Users, Registered Users 2 Posts: 21,397 ✭✭✭✭Water John


    What are the views on the ICMSA proposal for vol reduction in milk output?
    They put it to the others at the Dairy Forum, and it was roundly rejected.
    I think all the processors have seats on this quango.

    https://www.agriland.ie/farming-news/124890/

    Could some one arrange a poll on it?


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  • #9097
    Farmer Ed
    Banned (with Prison Access) Posts: 4,617 ✭✭✭Farmer Ed


    Water John wrote: »
    What are the views on the ICMSA proposal for vol reduction in milk output?
    They put it to the others at the Dairy Forum, and it was roundly rejected.
    I think all the processors have seats on this quango.

    https://www.agriland.ie/farming-news/124890/

    Could some one arrange a poll on it?

    Yes the processors and the ICOS make up the vast bulk of the membership of the dairy fourm. Very noticeable how the exact name's of the members have never been published. I wouldn't have thought they would be a need to protect the anonymity of the members. I know Ifa have the liquid and dairy chairman on it, macra have one on it, ICMSA have 2 on it. Ahi have 2 on it icos have 2 on it about 6 form the department including the minister, 2 from teagasc and board bia and the remainder are from the dairy processors, first man on the list representing them is Woulfe and I believe it could be Bergin representing Glanbia.

    Can't help but be reminded of haughys speech telling us we needed to tighten our belts.


  • #9098
    pedigree 6
    Closed Accounts Posts: 4,559 ✭✭✭pedigree 6


    Water John wrote: »
    What are the views on the ICMSA proposal for vol reduction in milk output?
    They put it to the others at the Dairy Forum, and it was roundly rejected.
    I think all the processors have seats on this quango.

    https://www.agriland.ie/farming-news/124890/

    Could some one arrange a poll on it?
    Of course it's a good idea.
    If we're being told the problem is oversupply. Voluntary scheme so a farmer can reduce supply based on last year and get paid for it and again voluntary if another wants to increase they can (not much incentive this year a lot of the expansion has already happened).
    But such a scheme would reduce supply and the farmer still gets paid. Win win.
    The only caveat you'd have to read the small print that it's not quota coming in the back door.


  • #9099
    OverRide
    Closed Accounts Posts: 665 ✭✭✭OverRide


    Seriously,in a very low milk price year ,people are going to reduce output,ending up with even lower income?
    I doubt that
    More realistic choices will be ending supplies of the hugely loss making winter milk and/or people getting out altogether and/or people with confidence and patience talking to their bank for support ahead of an inevitable upturn?


  • #9100
    Water John
    Registered Users, Registered Users 2 Posts: 21,397 ✭✭✭✭Water John


    That looks like a large quango. Its 30/40 in size?
    The three farm org have four. The processors and ICOS have a dozen.
    The Dept have 6 alone. 50% more than the farmers.

    I am putting the ICMSA proposal as an open question. It just seems to have got little hearing. Lets underline the word voluntary in it.


  • #9101
    Buford T. Justice XIX
    Closed Accounts Posts: 20,633 ✭✭✭✭Buford T. Justice XIX


    OverRide wrote: »
    Seriously,in a very low milk price year ,people are going to reduce output,ending up with even lower income?
    I doubt that
    More realistic choices will be ending supplies of the hugely loss making winter milk and/or people getting out altogether and/or people with confidence and patience talking to their bank for support ahead of an inevitable upturn?
    I wouldn't say the upturn was inevitable. Probable but not inevitable.

    And banks, despite all their chatter about 'backing brave' and supporting farmers, are in reality only lending to a small portion of farmers at interest rates far in excess of what they are getting the money for.

    Banks are almost totally focused on repairing their balance sheets and are not really interested in supporting farmers. A few lads I was talking to the other evening said they were being nudged towards selling shares rather than going interest only.


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  • #9102
    Water John
    Registered Users, Registered Users 2 Posts: 21,397 ✭✭✭✭Water John


    Some peoples bank have too much info on them, Buford.
    Good idea of some guys to open a post office acc for BPS.


  • #9103
    Buford T. Justice XIX
    Closed Accounts Posts: 20,633 ✭✭✭✭Buford T. Justice XIX


    Water John wrote: »
    Some peoples bank have too much info on them, Buford.
    Good idea of some guys to open a post office acc for BPS.
    Done 11 years ago.

    Found out the hard way:(


  • #9104
    kevthegaff
    Registered Users, Registered Users 2 Posts: 7,084 ✭✭✭kevthegaff


    Buford T. Justice V wrote:
    Found out the hard way


    Well?


  • #9105
    Water John
    Registered Users, Registered Users 2 Posts: 21,397 ✭✭✭✭Water John


    You want too much info there, Kev.


  • #9106
    Sacrolyte
    Registered Users, Registered Users 2 Posts: 923 ✭✭✭Sacrolyte


    Worse than a shaggin banker. :rolleyes:


  • #9107
    Buford T. Justice XIX
    Closed Accounts Posts: 20,633 ✭✭✭✭Buford T. Justice XIX


    kevthegaff wrote: »
    Well?
    My current account wouldn't give me any cash one day when I really needed it there and then as the renewal of my overdraft wasn't done despite getting it all sorted 2 weeks before.

    I had to go home to get bits and pieces and got stuck in traffic on the way back into town and missed my second child being born.:mad:

    But the following day I opened a current account in another bank and transferred my BFP details in there.

    The mouldy fekkers are still on to me to move it back to them:rolleyes:

    I have issues with banks, don't I:D


  • #9108
    Farmer Ed
    Banned (with Prison Access) Posts: 4,617 ✭✭✭Farmer Ed


    Buford T. Justice V wrote: »
    My current account wouldn't give me any cash one day when I really needed it there and then as the renewal of my overdraft wasn't done despite getting it all sorted 2 weeks before.

    I had to go home to get bits and pieces and got stuck in traffic on the way back into town and missed my second child being born.:mad:

    But the following day I opened a current account in another bank and transferred my BFP details in there.

    The mouldy fekkers are still on to me to move it back to them:rolleyes:

    I have issues with banks, don't I:D

    I was just in with my accountant today and had a very interesting conversation. I got the impression that farm borrowings levels are much higher than the official figure. He told me that it wouldn't be uncommon for farmers to have €200k mortgages on top of farm borrowings. He also said that generally speaking dairy farmers are much more exposed to risk as they are far more likely to have high levels of debt compared to dry stock farmers.


  • #9109
    whelan2
    Registered Users, Registered Users 2 Posts: 30,788 ✭✭✭✭whelan2


    Farmer Ed wrote: »
    I was just in with my accountant today and had a very interesting conversation. I got the impression that farm borrowings levels are much higher than the official figure. He told me that it wouldn't be uncommon for farmers to have €200k mortgages on top of farm borrowings. He also said that generally speaking dairy farmers are much more exposed to risk as they are far more likely to have high levels of debt compared to dry stock farmers.
    What did teagasc say a while back, the average dairy farmer had loans of 60k was it? Seemed small to me at the time


  • #9110
    Water John
    Registered Users, Registered Users 2 Posts: 21,397 ✭✭✭✭Water John


    Would believe that a significant number of dairy farms have fairly high borrowings. This has always been played down. The drystock sector does not have those. They would never be given them not could they service them.


  • #9111
    Farmer Ed
    Banned (with Prison Access) Posts: 4,617 ✭✭✭Farmer Ed


    whelan2 wrote: »
    What did teagasc say a while back, the average dairy farmer had loans of 60k was it? Seemed small to me at the time

    From what I gather mortgages are not included in that figure of 60k, I wouldn't be surprised if other debt was missing from that figure also.


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  • #9112
    whelan2
    Registered Users, Registered Users 2 Posts: 30,788 ✭✭✭✭whelan2


    Farmer Ed wrote: »
    From what I gather mortgages are not included in that figure of 60k, I wouldn't be surprised if other debt was missing from that figure also.
    where do they get their figures?


  • #9113
    Water John
    Registered Users, Registered Users 2 Posts: 21,397 ✭✭✭✭Water John


    But you pay for the mortgage from the salary which Teagasc says you don't draw. Nothing to do with the farm!!!


  • #9114
    Farmer Ed
    Banned (with Prison Access) Posts: 4,617 ✭✭✭Farmer Ed


    whelan2 wrote: »
    where do they get their figures?

    To be honest I'm not sure but I'm guessing they are depending on he good will of farmers to reveal at least some of that information to them. Question is where did they get the figures for cost of production? The problem seems to be human nature is that no one wants to be at the bottom of the class and things get exaggerated.


  • #9115
    OverRide
    Closed Accounts Posts: 665 ✭✭✭OverRide


    Farmer Ed wrote: »
    From what I gather mortgages are not included in that figure of 60k, I wouldn't be surprised if other debt was missing from that figure also.

    That would be it as a significant number have their primary farm loans secured on their homeloan mortgages aswell as the cost of the house,all of which is hidden from teagasc profit monitors
    Its farcical
    Good fodder for George Lee though to report how not so bad things are :rolleyes:


  • #9116
    Bass Reeves
    Registered Users, Registered Users 2 Posts: 20,431 ✭✭✭✭Bass Reeves


    Farmer Ed wrote: »
    From what I gather mortgages are not included in that figure of 60k, I wouldn't be surprised if other debt was missing from that figure also.

    When you say a mortgage I presume you mean a house Mortgage. A house mortgage is exactly a loan on a house it has nothing to do with farming. It is outside the farm profit and loss account and the interest is not allowable against farm income. No other business or worker can offset interest on borrowing for a house against income

    OverRide wrote: »
    That would be it as a significant number have their primary farm loans secured on their homeloan mortgages aswell as the cost of the house,all of which is hidden from teagasc profit monitors
    Its farcical
    Good fodder for George Lee though to report how not so bad things are :rolleyes:

    In this case if the money borrowed was transferred into the farm account or if part of it was then that part of the loan is allowable against tax. People do it all the time they give security of homes etc against loans for commercials ventures. As long as the borrowed money is transferred into the farm or business account then it is part of the profit and loss associated with that business.


    If a farmer went out and borrowed 100K for to buy a yacht should this be considered in the Teagasc profit monitor or would it be considered as farm borrowing. If a farmer has an external business and borrows for that is that farm borrowing.

    Slava Ukrainii



  • #9117
    Farmer Ed
    Banned (with Prison Access) Posts: 4,617 ✭✭✭Farmer Ed


    Bass Reeves wrote: »
    When you say a mortgage I presume you mean a house Mortgage. A house mortgage is exactly a loan on a house it has nothing to do with farming. It is outside the farm profit and loss account and the interest is not allowable against farm income. No other business or worker can offset interest on borrowing for a house against income




    In this case if the money borrowed was transferred into the farm account or if part of it was then that part of the loan is allowable against tax. People do it all the time they give security of homes etc against loans for commercials ventures. As long as the borrowed money is transferred into the farm or business account then it is part of the profit and loss associated with that business.


    If a farmer went out and borrowed 100K for to buy a yacht should this be considered in the Teagasc profit monitor or would it be considered as farm borrowing. If a farmer has an external business and borrows for that is that farm borrowing.

    As OverRide said some people would have mortgaged their houses in the past to invest on farm. I don't think it's possible since the crash but in the good old days it was common. I get you point about a true house mortgage being separate to the farm but like everyone else if a farmer loses his income he will go in to mortgage arrears and at very best it will damage his credit rating. So IMO it is relevant if a farmer finds himself in trouble.


  • #9118
    freedominacup
    Registered Users, Registered Users 2 Posts: 7,920 ✭✭✭freedominacup


    Farmer Ed wrote: »
    Bass Reeves wrote: »
    When you say a mortgage I presume you mean a house Mortgage. A house mortgage is exactly a loan on a house it has nothing to do with farming. It is outside the farm profit and loss account and the interest is not allowable against farm income. No other business or worker can offset interest on borrowing for a house against income




    In this case if the money borrowed was transferred into the farm account or if part of it was then that part of the loan is allowable against tax. People do it all the time they give security of homes etc against loans for commercials ventures. As long as the borrowed money is transferred into the farm or business account then it is part of the profit and loss associated with that business.


    If a farmer went out and borrowed 100K for to buy a yacht should this be considered in the Teagasc profit monitor or would it be considered as farm borrowing. If a farmer has an external business and borrows for that is that farm borrowing.

    As OverRide said some people would have mortgaged their houses in the past to invest on farm. I don't think it's possible since the crash but in the good old days it was common. I get you point about a true house mortgage being separate to the farm but like everyone else if a farmer loses his income he will go in to mortgage arrears and at very best it will damage his credit rating. So IMO it is relevant if a farmer finds himself in trouble.

    Not relevant at all. I got my house mortgage long before I took the reins on the farm. House mortgage has no more to do with the running of my business than my wife's salary ie nothing at all, the two are totally seperate.


  • #9119
    Farmer Ed
    Banned (with Prison Access) Posts: 4,617 ✭✭✭Farmer Ed


    freedominacup wrote: »
    Not relevant at all. I got my house mortgage long before I took the reins on the farm. House mortgage has no more to do with the running of my business than my wife's salary ie nothing at all, the two are totally seperate.

    In most cases you are correct, but if you remortgaged your hose to put up a milking parlour then that's a different story. Also regardless of what you make a living doing, if you can no longer make an income doing it it's going to cause you problems with your mortgage. What is happening to dairy farmers incomes at the moment could be potentially just as serious to farmers with mortgages as losing someones job is to a non farmer with a mortgage.


  • #9120
    OverRide
    Closed Accounts Posts: 665 ✭✭✭OverRide


    freedominacup wrote: »
    Not relevant at all. I got my house mortgage long before I took the reins on the farm. House mortgage has no more to do with the running of my business than my wife's salary ie nothing at all, the two are totally seperate.
    Well thankfully you're doing ok,but for the farmer , and there's an ever increasing number of them,who has to choose which gets paid,his/her home mortgage or the merchants,the house mortgage has everything to do with the farm


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  • #9121
    Waffletraktor
    Registered Users, Registered Users 2 Posts: 2,445 ✭✭✭Waffletraktor


    OverRide wrote: »
    Well thankfully you're doing ok,but for the farmer , and there's an ever increasing number of them,who has to choose which gets paid,his/her home mortgage or the merchants,the house mortgage has everything to do with the farm

    If they cant make it pay longerterm cash in the many hundred k"s worth and something else :).


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