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Milk Price- Please read Mod note in post #1

delaval

24/6/16

Recently we saw three posters close their accounts over disagreements in the dairy threads. While there is a lot of frustration and discontent with current milk prices and the processing industry, the recent tendency for dairy threads to become tit-for-tat arguments isn’t tolerable for those not involved.

All farming sectors go through difficult periods and during such times there may need to be changes in how threads are moderated.

Dairy threads are going to be more closely monitored and subject to stricter moderation for a while.

To that end we won’t tolerate baiting of posters, constantly reviving old arguments, posters with agendas or crusading for a cause.

Whether it’s discussion of the business or politics of the dairy or other sectors, we expect civility and tolerance toward each other and other opinions as diversity of opinion is needed as a source of different ways of looking at a situation.

"The aim of argument, or of discussion, should not be victory, but progress." - Joseph Joubert

Also please be aware that what you may post as light-hearted banter can be read totally differently by someone adversely affected by the subject matter and evoke a reaction you hadn’t intended.

The ‘Off-Season’ forum, and its anonymous posting, is available for anyone to chat about their situation.

The Mod Team.

I was wondering would it be a help if we posted our milk prices. I would hope that if someone is low that help could be given, on the other hand if high perhaps your tips could help us all.

I would suggest posting your processors base inc Vat for comparison
Post your Nett price for others to help or be helped
I think that solids should be included.
I suggest any seasonal/liquid contract price be excluded or seperated.

I feel that we as farmers do a lot of bitching about processor prices and rightly so IMO. I also feel that we should not worry about it as we can do nothing about base price but we certainly do something about it at farm level.

What do you all think?

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RightTurnClyde

On milk production Germany and Netherlands powering ahead. UK,France and Ireland pulling back
http://www.agriland.ie/farming-news/uk-milk-production

kowtow

For anybody interested I managed to find the fao datasets and i extracted the real and nominal price forecast for SMP through to 2025, which is the baseline forecast of the report referenced above.

I don't have time to try and figure out a blend of dairy commodities which reflects our milk prices, but if you are lazy like me you will observe that the SMP dollar price, divided by 1000, looks uncannily close to the highs and lows we have seen in Ireland in recent years, so while it could hardly be a true guide to farmer returns it might give some idea of what the FAO landscape looks like and how it relates to Ireland.

And given that Harvest 2020 was based on a fag packet analysis of the previous FAO report, this seems like the best set of figures to use for comparison.

The red line is real powder prices (adjusted for expected inflation) and the blue line is nominal prices (what powder is worth in dollars).

The actual price, of course, will cycle back and forth much more than the forecasted model suggests, the question is whether these forecasts have any meaning for those trying to make predictions about average / mid cycle prices... the forecast line would be about 20 (real) and 25 (nominal) in 2020, 24 (real) and 32 (nominal) in 2025...

pedigree 6

I was just thinking what we need is a high oil price that would lead to higher costs on highly mechanised farms.
It would also lead to increased ethanol production taking corn out of feed supply.
Which would increase corn prices and cause intensive farms to reduce milk supply. Thereby causing milk price to increase.

I wonder should we declare war on Saudi Arabia and Iran and also when we're at it shut down the shale gas fields in America.:D

I am watching the tv series "The men who built America" atm and john d Rockefeller had the right idea. Don't get involved with the boom and bust oil wells but concentrate on refining the crude oil. Let the grunters take all the risk.:p

Water John

I think Ped, you must become a milk processor, not a producer. is that lesson.

alps

pedigree 6 wrote: »

I am watching the tv series "The men who built America" atm and john d Rockefeller had the right idea. Don't get involved with the boom and bust oil wells but concentrate on refining the crude oil. Let the grunters take all the risk.:p

Too many of us signed up as grunters at this stage Ped.....

Gonna take some ingenuity at this stage to swing it around.....but who knows....

alps

RightTurnClyde wrote: »

On milk production Germany and Netherlands powering ahead. UK,France and Ireland pulling back
http://www.agriland.ie/farming-news/uk-milk-production

Netherlands have pushed on hard for environmental reasons. They have had a retrospective environmental stocking rate limit imposed on them which goes back to July 2 last year. There effective sticking rate is set from that date. They increased stock numbers as hard as possible over the last few yrs to get as high a reference as possible.

This had quiet a detrimental effect on their profitability figures, but they suffered it short term to get their base up.

Their plan now is to remove all young stock from their farms, and replace them or hold milking the increased cow numbers. As Holland has such a high stocking rate, the next move is to have the young stock contract reared in Germany and other nearby countries. ..

einn32

I was reading that the number of oil tankers docked off oil refineries/ports around the world is higher than normal. It's usually a method of storing oil for a while and selling it when oil price is high but the reason these days is that it can't be refined quick enough there is such a glut.

kowtow

alps wrote:

Their plan now is to remove all young stock from their farms, and replace them or hold milking the increased cow numbers. As Holland has such a high stocking rate, the next move is to have the young stock contract reared in Germany and other nearby countries. ..

As always, good intentions + more regulation = unintended consequences.

alps

kowtow wrote: »

As always, good intentions + more regulation = unintended consequences.

Yep...its incredible really the output from these Dutch farms. 80%grassland now, gone away to a large extent from cropping so that all these farms can get into derogation.

This really for dairy chit chat so ill move there

whelan2

How did Glanbia fare out in the kpmg milk price table in today's journal. Link won't open on phone

kevthegaff

I see rabbo an are predicting slow rise in 17, jes they're 2 years back on their last prediction

mahoney_j

Milk markets have bottomed out and price stabilised ,stable price for rest of year and rise to come early 2017 but don't expect anywhere near 40 c .

freedominacup

mahoney_j wrote: »

Milk markets have bottomed out and price stabilised ,stable price for rest of year and rise to come early 2017 but don't expect anywhere near 40 c .

Where do I bring this post to cash it.

I hope you're right mj. I think you might be. The mood music seems to be changing.

whelan2

freedominacup wrote: »

Where do I bring this post to cash it.

I hope you're right mj. I think you might be. The mood music seems to be changing.

Any indication on June milk price, surely they cant drop anymore?

Bass Reeves

freedominacup wrote: »

Where do I bring this post to cash it.

I hope you're right mj. I think you might be. The mood music seems to be changing.

Best thing to cure low prices are low prices

[Deleted User]

Bass Reeves wrote: »

Best thing to cure low prices are low prices

Sure thats not getting intervention to save the day, after supposedly being set free

:rolleyes:.

Water John

http://www.whio.com/news/news/local/milk-category-dairy-takes-gold/nrsGC/

Now that's where milk should be in the scheme of things, an elite product.
Recently, I was thirsty and picked up a 500ml bottle of 7 up Free, cost was €1.75. This did not even have sugar. If I had gone to Lidl I could have bought 2ltrs for about €1.40 low fat milk, or about €.35 cent for the 500ml.
That's really sad.

newacc2015

Water John wrote: »

http://www.whio.com/news/news/local/milk-category-dairy-takes-gold/nrsGC/

Now that's where milk should be in the scheme of things, an elite product.
Recently, I was thirsty and picked up a 500ml bottle of 7 up Free, cost was €1.75. This did not even have sugar. If I had gone to Lidl I could have bought 2ltrs for about €1.40 low fat milk, or about €.35 cent for the 500ml.
That's really sad.

7up has a massive marketing budget to convince people to drink it. The marketing behind milk and any other dairy product in Ireland is horrific. I know plenty of people who dont drink milk as they either think Dairy Farming is super cruel or that milk is full of artificial chemicals and hormones.

I know this seems mad, but a lot of people growing up in cities have never been to a farm. I have Dublin friends who are vegetarians as they think farms are cruel, as all they know about farms is seeing big massive 50,000 acre ones in Texas that you see on the TV or some PETA propaganda film on youtube. Very few non-farmers seem to understand that most Irish farms are pretty tiny compared to other countries farms and that most Farmers adore their animals.

More needs to be done by milk/meat companies in Ireland to address concerns that consumers have over animal welfare/product quality. Instead of having 30 seconds of drink whatever generic brand of milk, show 30 seconds of an actual typical dairy farm or that Irish milk is not American milk and not full of chemicals/hormones.

If Irish milk was marketed properly like 7up. People will pay a higher price. Germans have been so heavily marketed to by the Kerry group for the last 30 years, that Kerrygold is the no 1 butter in Germany and Germans pay almost twice as much for Kerrygold as other Butters. I have been to the cheapest of cheap supermarkets in Germany, where there is literally no brand names. Yet there is a package of Kerrygold somewhere in the fridges and low income people are buying it.

Water John

Lots in what you say New. Just to point out that The Kerrygold brand is owned by Ornua (Irish Dairy Board) not Kerry Group. The Kerry Group ironically own Dairygold the best selling spread on the Irish market. Can be confusing.

Farmer Ed

newacc2015 wrote: »

7up has a massive marketing budget to convince people to drink it. The marketing behind milk and any other dairy product in Ireland is horrific. I know plenty of people who dont drink milk as they either think Dairy Farming is super cruel or that milk is full of artificial chemicals and hormones.

I know this seems mad, but a lot of people growing up in cities have never been to a farm. I have Dublin friends who are vegetarians as they think farms are cruel, as all they know about farms is seeing big massive 50,000 acre ones in Texas that you see on the TV or some PETA propaganda film on youtube. Very few non-farmers seem to understand that most Irish farms are pretty tiny compared to other countries farms and that most Farmers adore their animals.

More needs to be done by milk/meat companies in Ireland to address concerns that consumers have over animal welfare/product quality. Instead of having 30 seconds of drink whatever generic brand of milk, show 30 seconds of an actual typical dairy farm or that Irish milk is not American milk and not full of chemicals/hormones.

If Irish milk was marketed properly like 7up. People will pay a higher price. Germans have been so heavily marketed to by the Kerry group for the last 30 years, that Kerrygold is the no 1 butter in Germany and Germans pay almost twice as much for Kerrygold as other Butters. I have been to the cheapest of cheap supermarkets in Germany, where there is literally no brand names. Yet there is a package of Kerrygold somewhere in the fridges and low income people are buying it.

You are correct apart from the owner of the brand but yes very confusing.

I honestly think with German retailers going down the GM free dairy route we could be in trouble if we don't address it. Far bigger issue than filling up forms and quality assurance but we are burying our heads in the sand.

whelan2

Farmer Ed wrote: »

You are correct apart from the owner of the brand but yes very confusing.

I honestly think with German retailers going down the GM free dairy route we could be in trouble if we don't address it. Far bigger issue than filling up forms and quality assurance but we are burying our heads in the sand.

Alot of schools dont do school milk anymore and this needs to be addressed too.

rangler1

whelan2 wrote: »

Alot of schools dont do school milk anymore and this needs to be addressed too.

Surely money would be better spent on education in schools than food.....there's very few hungry nowadays

alps

rangler1 wrote: »

Surely money would be better spent on education in schools than food.....there's very few hungry nowadays

Don't agree....and so many kids go to school without breakfast......and the level of understanding about nutrition is abysmal....

alps

newacc2015 wrote: »

7up has a massive marketing budget to convince people to drink it. The marketing behind milk and any other dairy product in Ireland is horrific. I know plenty of people who dont drink milk as they either think Dairy Farming is super cruel or that milk is full of artificial chemicals and hormones.

At a dinner one night back in the day that our marketing departments felt it correct to advertise milk with "Full Fat Milk" on the Carton. ...All it signaled to the consumer was don't buy me..

Anyway, conversation got on to Milk and it's health benefits or otherwise and I put the question to the group as to how much fat they thought was in the milk...

The answers ranged from 40 to 80%

I asked them would they buy milk if it was 96.5% fat free?

Of course they would...

Farmer Ed

The problem with everyone thinking milk is full of hormones ect is largely coming from articles written in the US. We really need to educate the public and not just in ireland that we don't use hormones. We need to protect our image big time

kowtow

rangler1 wrote:

Surely money would be better spent on education in schools than food.....there's very few hungry nowadays

"There is no finer investment for any community than putting milk into babies" - Winston Churchill

rangler1

kowtow wrote: »

"There is no finer investment for any community than putting milk into babies" - Winston Churchill

50c/child/day would pay for a lot of extra teachers, 95%+ of families are well able to pay for their own milk and not take my taxes

kowtow

Must look up the figures but I wonder whether milk consumption went downhill when they started homogenisation.

newacc2015

alps wrote: »

At a dinner one night back in the day that our marketing departments felt it correct to advertise milk with "Full Fat Milk" on the Carton. ...All it signaled to the consumer was don't buy me..

Anyway, conversation got on to Milk and it's health benefits or otherwise and I put the question to the group as to how much fat they thought was in the milk...

The answers ranged from 40 to 80%

I asked them would they buy milk if it was 96.5% fat free?

Of course they would...

Americans call milk by the percentage of fat as milk is as you said pretty low fat. Fat is a horrible word even if it is low fat. 2% Milk is far better than low fat milk. America markets the health benefits of milk etc. Yet all most companies market on here is either being locally produced or Ireland's favourite milk. Both tell consumers nothing about the product or the quality of it.

When Donegal Investment group which is a tiny PLC worth €55m versus Kerry Group market cap of over €13bn has better advertising and brand packaging you know there is something serious wrong with marketing by food processor in Ireland. It is not a Irish problem by any mean. American and other European food processors are having similar issues.

But it is just lazy competing for market share purely on price, when most consumers dont care about the price of milk. Milk is a staple. You arent going to stop buying it as it is 85c instead of 75c

kowtow

newacc2015 wrote: »

But it is just lazy competing for market share purely on price, when most consumers dont care about the price of milk. Milk is a staple. You arent going to stop buying it as it is 85c instead of 75c

You wouldn't think that the price of milk has a big impact on willingness to buy, but it has always been an item of prime importance in the supermarket.

The reason the dairy shelves are at the back of the store is that people have to pass all the high value high margin processed foods in order to get at the bottle of milk they came in for... that is where the money is made.

Look carefully in a big supermarket with a tiled floor and you'll see that in the aisles with the highest margin goods the floor tiles are narrower than the rest of the store. People navigate their trolleys by the sound and feel of the grout line between the tiles (the bump... bump... bump...) and when the tiles get closer together they instinctively slow down, giving them more time to look at all those processed, high value, high profit margin goods the retailer wants them to buy on the way to that bottle of milk.

Using milk as a loss leader to sell a trolley full is the oldest trick in the book, but to be fair supermarkets are well able to subsidise that loss themselves without making farmers pick it up. No reason why farmers should contribute to the marketing costs of the multiples.

On the other hand - I know that in the UK at least there was some legislation discussed which attempted to restrict the use of loss leaders. It is just possible (have never looked into it) that doing this would effectively force the loss from the supermarket on to the farmer - another example of unintended consequences of well meaning legislation.

In Switzerland as a matter of corporate policy even large supermarkets carry local dairy goods (very local, i.e. the village they are in) alongside the national branded products on the shelves. I have often been told that UK stores can't do this due to logistics, but if Migros or CoOp can manage to do it 1200 metres up an Alp which is covered in six feet of snow for five months a year I really don't see why Tesco or Sainsbury can't...