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

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.

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.

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

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.

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

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 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.

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 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.

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