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Dairy Chit Chat- Please read Mod note in post #1

Timmaay

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.

10 away from the 10000 posts! Frazz I think it's fair to say this thread has been a success!

Indeed it was! First thread can be found here- http://www.boards.ie/vbulletin/showthread.php?t=2056872221

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kowtow

yosemitesam1 wrote: »

I dont know anything about coop shares and supply rights so might be missing something, but if milk for powder is worth less than 20c/l atm and an existing supplier/new entrant can supply extra milk to the coop for a base price above this are they not watering down a longterm suppliers (who didn't expand) share of the higher value products?

I think the answer is yes and no.

To the extent that there is a fixed amount of premium high priced sales available to a co-op, then every additional litre supplied moves the price for everyone down inexorably towards the lowest price - the "powder price" - perhaps. The most effective way to escape this would be some form of internal pool a+b+spot milk or whatever which reflected the co-ops external sales of product - I think the ship has probably sailed for that as it would be very difficult to establish a reference year, but that's about the measure of it.

FWIW as I have said here before I'd be absolutely in favour of a transparent traded market for all milk contracts, with the co-ops back in their proper role as farmer's agent but that is a different discussion.

The question as I originally read it was about the share out of price support of the type that has been added to the milk price by various co-ops in the recent past - since this comes from shareholders funds, it follows that additional shares issued and sold to match the volume of supply increase the capital base and therefore there is already an equitable division of sorts if the regime is properly followed.

You are absolutely right on the price dilution aspect though, unless and until powder is more valuable than everything else that is a new fact of life for suppliers who aren't expanding.

kowtow

JeffKenna wrote: »

I'm not sure how you're coming to this conclusion.

If the Co-Op is subsidising by, we'll say a cent, for every litre then surely this is transferring money directly from smaller farmers to bigger ones. Why not leave it all in the Co-op and redistribute it as dividends at the end of the year. Surely that would be fairer as opposed to subsidising big expanding farms?

If sufficient shares are held by the expanding supplier to match volume then whether he gets it as dividend or alongside supply makes no odds surely? - aside from price dilution which is a problem per my post above.

freedominacup

kerry cow wrote: »

Hi lads .
Don't know if ye saw my thread of taking the big step .
I was back home weekend in kerry and was telling a few lads that I was going to return to milking .
The mood was that milk suppliers feel why should a new entrant be given a contract to supply milk when there is over supply and the guys who have support the manufacturer all their life is entitled to a price per litre before kerry take on any new milk .what's ye feeling ??

They have a cheek. We have co-op shares since the forties. We have been milk suppliers for three different periods over that time. As far as I'm concerned new suppliers should be able to buy the shares they need at the nominal value the same as any other supplier over the past century. New entrants shouldn't expected to find the retirement of older guys getting out.

freedominacup

JeffKenna wrote: »

. Surely that would be fairer as opposed to subsidising big expanding farms?

It's a co-op. Smaller and bigger suppliers always pulled together to get a better deal in the overall. If you take your point to it's ultimate conclusion bigger suppliers should take their milk and do their own deal/put their own processing in place to get a better deal for themselves. How much do you think milk assembly costs would rise by if instead of 3×8000l stops and 3×3000l stops to fill a truck you had only guys with 3000l for collection. Co-ops always involve swings and roundabouts. If all you're focused on as a co-op member is whatever deal exactly suits you at this precise moment you haven't much business maintaining your membership.

Panch18

freedominacup wrote: »

They have a cheek. We have co-op shares since the forties. We have been milk suppliers for three different periods over that time. As far as I'm concerned new suppliers should be able to buy the shares they need at the nominal value the same as any other supplier over the past century. New entrants shouldn't expected to find the retirement of older guys getting out.

New entrants shouldn't also get a free ride with regards to the use of assets that have been built up over years

They should be allowed buy in at the appropriate price

Water John

Yes Panch, they share up. Generally ranges from 1.5 to 4 cent/litre.
The Board sets this figure. Complain to your Directors if you are unhappy with the rate.

OverRide

I miss read that as complain to your doctors

Water John

Override, possibly a better option. Might listen or appear to any way.

kerry cow

Well lads , you can see from the feeling on here .a lot of surpliers out there do not want new entrants suppling to co ops diluting their value .It was said to me even if I had to share up the farmers don't want new entrants because kerry plc keep saying they don't want the milk .that it is marginal . And existing guy feel we only add to the problem .kerry don't do a share up , sign contract and supply away
Plc don't care about farmers . And no other co op will encroach their ground
That where the centimen comes from

freedominacup

Panch18 wrote: »

They should be allowed buy in at the appropriate price

Which as far as I'm concerned is the same price my family bought their shares at over the years. Fair is fair. It's a co-op.

6270red

kerry cow wrote: »

Hi lads .
Don't know if ye saw my thread of taking the big step .
I was back home weekend in kerry and was telling a few lads that I was going to return to milking .
The mood was that milk suppliers feel why should a new entrant be given a contract to supply milk when there is over supply and the guys who have support the manufacturer all their life is entitled to a price per litre before kerry take on any new milk .what's ye feeling ??

If it's Kerry your supplying there is no need to have shares to supply you only have to sign the msa which ties you in for ten years. Could be wrong so open to being corrected on this.

Buford T. Justice XIX

Did anyone go to the IGA summer daity tour today in Cork/Kerry?

Two very interesting farms and farmers growing grass and improving their farms on challenging soils, to say the least.

Some very interesting points made by both farms, I'll stick up a few points tomorrow on them, if anyone is interested.

I met frazzled as well, he's an able operator.:D

White Clover

Buford T. Justice V wrote: »

Did anyone go to the IGA summer daity tour today in Cork/Kerry?

Two very interesting farms and farmers growing grass and improving their farms on challenging soils, to say the least.

Some very interesting points made by both farms, I'll stick up a few points tomorrow on them, if anyone is interested.

I met frazzled as well, he's an able operator.

Where was that on Buford?
Didn't see anything about it.

Brown Podzol

Buford T. Justice V wrote: »

Did anyone go to the IGA summer daity tour today in Cork/Kerry?

Two very interesting farms and farmers growing grass and improving their farms on challenging soils, to say the least.

Some very interesting points made by both farms, I'll stick up a few points tomorrow on them, if anyone is interested.

I met frazzled as well, he's an able operator.

Would have attended but we're fooling around with bits of silage. Be interested on your take. Has frazzled any notion in coming back here, 'it's a lot poorer for his absence.

I met a friend and neighbour today as he was helping his son put cows across the road after milking. He thought I wouldn't stop for a chat as everyone is in such a hurry now, with extra cows and all that goes with it. They're working from morning till night and according to him no better off and even if they were making lots of money they wouldn't have time to spend it. He's over eighty now and remembers back when every one had time to socialise. They've expanded, built a new milking parlour and extra accommodation. He says the son is always quoting teagasc about the need to drive on, teagasc this and teagasc that. His new name for teagasc is shagus&#55357;&#56832;. Gave me something think about and smile about for the day.

Wildsurfer

Yeah great day out today at Grassland walk... Seriously burned now though! I was really impressed with Conor Creedons clarity and focus on his enterprise. He knows exactly how his business is performing and knows exactly where he wants to go. Growing 15.5t grass on that farm is a good reason to re evaluate performance on our own farms. We saw the farms at their best today but it must be bleak at times there in spring

Buford T. Justice XIX

Wildsurfer wrote: »

Yeah great day out today at Grassland walk... Seriously burned now though! I was really impressed with Conor Creedons clarity and focus on his enterprise. He knows exactly how his business is performing and knows exactly where he wants to go. Growing 15.5t grass on that farm is a good reason to re evaluate performance on our own farms. We saw the farms at their best today but it must be bleak at times there in spring

Yeah, some operator, that fella.

It was interesting when he focused on the maintenance SI in the EBI and only picked bulls of 30 or more so he would only get cows of a smaller bodyweight with low maintenance.

He also had only 6 bulls to chose from so it makes breeding decisions fairly easy I suppose:(

Sean O'Riordan wasn't as far along the development road as Conor but his farm is way more challenging, I think. He is supposed to be an absolute mine of information about soils too. 3,400 euro/ha drainage costs and getting full payback in 5 years with the extra grass grown and utilised is some return on investment.

yewtree

At the IGA walk aswell a very good day well worth the drive.
Agree with other posters regarding Creedon's farm seriously impressive when you look what's around the farm. Gave me a few ideas regarding breeding strategies for my herd aswell.
ORiordans farm is probably more difficult both lads are recording in excess of 1800mm of rain annually. Farming in mayo here and local met station only records 1250mm.
I though both guys were doing a good job taking info from research and adapting to suit their farms.

trixi2011

Sounds like a good day out . Was there much talk about phs ? Saw something on twitter stating that correction of ph was worth 2 tons of grass on one of these farms????

yewtree

trixi2011 wrote: »

Sounds like a good day out . Was there much talk about phs ? Saw something on twitter stating that correction of ph was worth 2 tons of grass on one of these farms????

Ya big focus on soil fertility on both farms particularly soil ph. What I took from it was.
Target ph 6.3-6.5, get lime on quickly spreading up to 2t/acre on heavy soils will have no effect on soil trafficability.
Don't use high molybdenum as an excuse not to spread lime. Soil ph will have to be above 6.2 for this to become an issue
Follow cows in spring with lime. Paddocks are usually well grazed out and longer rotation lenght between grazings
Move towards soil sampling every year.
Increasing soil ph, better n efficiency, release of P and perennial ryegrass will last longer in the sward.

Dawggone

Just reading online about the Irish grassland day on the Cork/Kerry mountains. Can the figure of €3400/ha for draining mountain, paid back by more grass production, be explained by anybody that attended?

Buford T. Justice XIX

Dawggone wrote: »

Just reading online about the Irish grassland day on the Cork/Kerry mountains. Can the figure of €3400/ha for draining mountain, paid back by more grass production, be explained by anybody that attended?

An extra 3.5t of utilised grass costed at €200 a tonne every year for 5 years. Some 5t extra grown.

Edit. Shallow drains about 1m deep filled to 15cm of the top and regular subsoil ingredients as well.

jaymla627

Buford T. Justice V wrote: »

An extra 3.5t of utilised grass costed at €200 a tonne every year for 5 years. Some 5t extra grown.

Edit. Shallow drains about 1m deep filled to 15cm of the top and regular subsoil ingredients as well.

The maths don't add up with milk at 20 cent a litre, if your saying the extra 3.5 ton grass dm is worth 700 which it isn't. ...
3500 kg/dm would feed say 200 cows for a day allocated 17 kg, If you average out the grass will be worth say 15 litres across the year that means It's value is 600 euros worth of milk a year without adding any other variable our fixed costs

Dawggone

Buford T. Justice V wrote: »

An extra 3.5t of utilised grass costed at €200 a tonne every year for 5 years. Some 5t extra grown.

Edit. Shallow drains about 1m deep filled to 15cm of the top and regular subsoil ingredients as well.

I don't have time to crunch those numbers, maybe Kowtow will.

To take in a wider perspective...I can freely *buy* top class highly productive land for €3k/ha with irrigation...grow anything you like.
If the same money was invested to return that land to a productive grouse moor...

Just saying.

jaymla627

Buford T. Justice V wrote: »

An extra 3.5t of utilised grass costed at €200 a tonne every year for 5 years. Some 5t extra grown.

Edit. Shallow drains about 1m deep filled to 15cm of the top and regular subsoil ingredients as well.

kowtow

Buford T. Justice V wrote: »

An extra 3.5t of utilised grass costed at €200 a tonne every year for 5 years. Some 5t extra grown.

If his grass is costing €200 / t dm grazed he has bigger problems than drains surely... ?

Or is he valuing the grass based on it's output at a given milk price, sounds more likely?

In which case I think Jay's analysis below makes more sense but as he says it appears to be based only on milk sales from the extra grass ignoring other costs. Have inputs gone up on an annual basis or is this extra grass from identically managed land? The devil is in the detail with these comparisons.

I suppose the objective accounting way of doing it might be to express the saving over concentrate of the extra grass grown taking into account all costs, but everyone would fall asleep if we did that.

And in any event - if it's grass you want to grow and graze and the drainage does the job, on a given land base, he is to be congratulated regardless of the exact payback... God (Teagasc?) gave him lemons, and he made lemonade. A lot of it.

Keepgrowing

It cant be over emphasised how difficult Sean o Riardons land is.

He can also buy the best of land for 3500/ha but would have to move to France or Eastern Europe. He didn't mention having any plans to do so. He has a wet farm and is doing a fantastic job where many would've walked off after planting it.

The 3500 spent on draining brought this piece of ground from his worst, wettest and least grazed paddock to a paddock producing 12t of dm and the first paddock he goes to in spring, even this spring the wettest he has recorded. This paddock will get 10/11 grazings, I'm wondering will the guys on the best of land achieve this but that's another discussion.

To buy in 3.5 tonne of DM onto his farm in his area would be an expensive proposition. I think that 200 per tonne would be a fair stab at the replacement cost. Another point worth making is that in my opinion is that this paddock will most likely grow 15 tonne when soil index is corrected.

The 3500 is a gross figure before Vat reclaim and tax relief coupled with adding value to the ha reclaimed.

One point people seem to forget is that this isnt being paid for in 1 year but rather over several years.

I'd love to hear what value ye'd put on extra grass grown.

Lastly nothing pays at current mik price but every investment has to be viewed over more years than 1!!

kowtow

Keepgrowing wrote: »

I'd love to hear what value ye'd put on extra grass grown.

Lastly nothing pays at current mik price but every investment has to be viewed over more years than 1!!

I don't think anybody is questioning the performance or the remarkable turnaround in production - just the numerical value attributed to extra grass and the headline "payback period". I suspect most would feel if it took 12 years to wash it's face it would still be a good investment.

Dairy commentators have a habit of reducing figures to bite size pieces "to help the poor farmer", while substituting cash accounting and accrual accounting principles to suit the agenda of the speaker - if we are to grow up as an industry this game of ducks and drakes with figures has to stop. I think people are getting cynical and reading in themselves, and I think that's a great thing.

If people in this thread - upon seeing a headline payback figure - start digging out what is or isn't behind the figure, instead of just heading down to the bank to borrow money for track machines and corri pipe, then there is hope for us yet.

yewtree

jaymla627 wrote: »

The maths don't add up with milk at 20 cent a litre, if your saying the extra 3.5 ton grass dm is worth 700 which it isn't. ...
3500 kg/dm would feed say 200 cows for a day allocated 17 kg, If you average out the grass will be worth say 15 litres across the year that means It's value is 600 euros worth of milk a year without adding any other variable our fixed costs

Not sure on these figures, well managed grass worth a lot more than 15 litres across the year. What UFl values/ intakes are you assuming to get such a low value? Your right on much slower return with low milk price but drainage cap ex so should be looked at over longer term.
The figures used were based on replacing the extra feed grown on the farm with bought in feed, €200 tonne/ utilised seems fair enough. On a heavy farm is there anything outside of soil fertility that would give a better return on investment?

Keepgrowing

jaymla627 wrote: »

The maths don't add up with milk at 20 cent a litre, if your saying the extra 3.5 ton grass dm is worth 700 which it isn't. ...
3500 kg/dm would feed say 200 cows for a day allocated 17 kg, If you average out the grass will be worth say 15 litres across the year that means It's value is 600 euros worth of milk a year without adding any other variable our fixed costs

put a value on a tonne of dm

yosemitesam1

Keepgrowing wrote: »

put a value on a tonne of dm

If he doesnt need protein which he is unlikely to with that cow type id value the grass at .5 to .65 the price of barley or maize.