Milk Price- Please read Mod note in post #1

Dawggone · 23-07-2016 12:23PM

Keepgrowing wrote: »

Curious to know have many here experience of farming through the '80's. I mean with money borrowed and paying massive interest.

We had high interest and high inflation, an absolute killer combination. Now I do recognise that not farms were heavily borrowed but those that were really struggled.

I'm a product of that time and what's happening now as regards price while difficult is a walk in the park in comparison. We managed to get through without selling any land despite savage pressure from our lender. In a kinda perverted way it made us stronger despite the fact it took us till the mid 90's to get going properly again.

Having been there I know that this downturn will pass but they are now going to come more frequently. When we get through this if we're not better prepared for the next trough it's been a wasted experience however if it prepares us better it will be a great life lesson.

I am including all stakeholders in the dairy industry from the relief milker to the strategists in our processors. There needs to be a see change in how we do business from product mix to flattening the supply curve. Despite what many believe winter milk is very doable on a grass based system with the right cow and hitting big growths mid summer in order to conserve bales to feed during housed period. I think we need to move away from the belief that maize, beet and expensive rations are necessary.

This flattening can't happen without the processors changing their product mix and thus paying the necessary premium for HIGH QUALITY winter milk.

I won't forget the 80s.

Milk was the *only* farming enterprise that made money post '84.

kevthegaff · 23-07-2016 12:27PM

Maybe us milk men are getting what we deserve:-)

blackdog1 · 23-07-2016 02:32PM

Dawggone wrote:

Coupled production?? Explain.

Dawggone wrote:

That 14cpl that you've been offered for nothing was organised by the French German and Polish. Any handouts organised by rioting French farmers have been for all states. For the record I didn't even qualify for the ski holiday hand out.

Dawggone wrote:

I've put up on the harvest thread my exact yields and today's prices...makes milk at 20cpl look like a lotto win.

Think people should applaud the French farmers for putting so much pressure on Europe to look after its farmers. I've had a load of french students here over the years who were bankers,pharmacy sons and daughters who ended up in the credit agricol bank or food processing sector and everyone of them had to milk cows and get their hands dirty at ground level before progressing. They have fierce respect for the hard work farmers do because of it. It's a formula that should be copied everywhere. God help us if the French weren't in Europe because nobody else cares about farming.

OverRide · 23-07-2016 06:17PM

Waffletraktor wrote: »

Roll over money from the by-pass?

I'd imagine that's well gone at this stage
Decent Land has not made less than 12k an acre in the area in the last decade and longer that I'm aware of

Farmer Ed · 23-07-2016 07:36PM

freedominacup wrote: »

The first time the oul boy and his brothers got 3 tonne s.barley crops they were paying around a half a tonne per acre in rent and a tonne of barley was worth around the same as a weeks wages for the guys they were employing. Money made those years.

A 100 acre farm near here was purchased back in the day near here with the proceeds of the sale of 50 heifers. How much land would 50 heifers buy for you today? At the risk of repeating myself again. The price milk made in 1989 when inflation is taken in to account is the equivalent of 66cl in today's money. That's a very startling figure IMO

newacc2015 · 23-07-2016 11:09PM

Keepgrowing wrote: »

Curious to know have many here experience of farming through the '80's. I mean with money borrowed and paying massive interest.

We had high interest and high inflation, an absolute killer combination. Now I do recognise that not farms were heavily borrowed but those that were really struggled.

Actually high inflation and high interest isnt a bad thing. High inflation erodes the real value of money ie what you can buy with your money. If inflation is 10% per annum, you debt will be technically be 10% less of a burden than last year. Likewise your savings will have lost 10% of their value

Ireland had interest rates of like 22% on prime banks loans at some stages in the 1970s/1980s which seems massive, until you realise inflation was close to 25% at the same time. Meaning banks will still losing money on these loans

High inflation is scary. But the situation we are in at the moment of deflation and no inflation is horrific. We have never known more about how economies work and modern economics is nearly an art form. Yet we are still clueless on how to get out this deflationary hole we are in. Without a fair amount of inflation, people will have massive borrowings which will not will reduce in burden in anyway for decades unlike the 1980s. This economic period we are in is something that has never been experienced ever. The yields on US bonds (basically the interest) is the lowest since the 1700s.

Keepgrowing · 24-07-2016 07:40AM

newacc2015 wrote: »

Actually high inflation and high interest isnt a bad thing. High inflation erodes the real value of money ie what you can buy with your money. If inflation is 10% per annum, you debt will be technically be 10% less of a burden than last year. Likewise your savings will have lost 10% of their value

Ireland had interest rates of like 22% on prime banks loans at some stages in the 1970s/1980s which seems massive, until you realise inflation was close to 25% at the same time. Meaning banks will still losing money on these loans

High inflation is scary. But the situation we are in at the moment of deflation and no inflation is horrific. We have never known more about how economies work and modern economics is nearly an art form. Yet we are still clueless on how to get out this deflationary hole we are in. Without a fair amount of inflation, people will have massive borrowings which will not will reduce in burden in anyway for decades unlike the 1980s. This economic period we are in is something that has never been experienced ever. The yields on US bonds (basically the interest) is the lowest since the 1700s.

Agreed but then massive deflation hit land values when people were forced to sell causing debt to linger.
Your comment about banks losing money sums it up as they were the ones piling on the pressure.

kowtow · 24-07-2016 10:50AM

Keepgrowing wrote:

Agreed but then massive deflation hit land values when people were forced to sell causing debt to linger. Your comment about banks losing money sums it up as they were the ones piling on the pressure.

Yup .. and although bond rates at historical low I would add there are very obvious parallels between present economic situation and the 1930's .. as well as some periods in 19th century.

In many ways land is a proxy for treasury bonds. Like a bond, you hold it only against the obligation of the state where it is located. It represents a claim upon the future prosperity of the country it belongs to.

The current bond bubble can partly be explained by the politics of QE... and like all bubbles must eventually burst. Whether and to what extent land prices will do the same must be a valid question.

blackdog1 · 28-07-2016 05:17PM

Dairygold supplier

3.5 p 3.9 fat

25.318 c litre.

kevthegaff · 28-07-2016 08:16PM

blackdog1 wrote:

3.5 p 3.9 fat

blackdog1 wrote:

Dairygold supplier

blackdog1 wrote:

25.318 c litre.

Fixed?

blackdog1 · 28-07-2016 08:44PM

Yeah 15%. But that 15% is over 18 months so works out about 10%.

Buford T. Justice XIX · 29-07-2016 10:45AM

Just seen the spot price in UK hit 30p/l yesterday, for a small quantity but still an eye watering figure:eek:

Also big increases in B quota prices and some companies getting rid of B quota altogether.

And with WMP being the biggest part of the GDT, it's rise in demand and price is looking good for milk prices for the tailend of this year and most of next years production.

mahoney_j · 29-07-2016 10:51AM

Buford T. Justice V wrote: »

Just seen the spot price in UK hit 30p/l yesterday, for a small quantity but still an eye watering figure:eek:

Also big increases in B quota prices and some companies getting rid of B quota altogether.

And with WMP being the biggest part of the GDT, it's rise in demand and price is looking good for milk prices for the tailend of this year and most of next years production.

Seen that positive signs at last which have been gathering pace for last 6 weeks but looking for price rise before next Feb/March ,don't think it'll happen ,all coops have been supporting price for a long time now so any market bounce now will take a few months before end producer sees it .also a mountain of intervention product to shift

stretch film · 29-07-2016 11:52AM

mahoney_j wrote: »

Seen that positive signs at last which have been gathering pace for last 6 weeks but looking for price rise before next Feb/March ,don't think it'll happen ,all coops have been supporting price for a long time now so any market bounce now will take a few months before end producer sees it .also a mountain of intervention product to shift

There is a notable exception in giil .
Any improvement in market returns needs to be paid out straight away .the company has rigidly stuck to protecting its margin and then paid out what's left.

That rigidity must be of benefit to the supplier when markets turn

freedominacup · 29-07-2016 12:11PM

stretch film wrote: »

There is a notable exception in giil .
Any improvement in market returns needs to be paid out straight away .the company has rigidly stuck to protecting its margin and then paid out what's left.

That rigidity must be of benefit to the supplier when markets turn

Yes but you haven't applied the appropriate corporate accountancy rules to your calculations stretch. I'm sure some cheap suit will turn up at the appropriate forum shortly to explain using GII logic how your figures are up your arse.

Buford T. Justice XIX · 29-07-2016 12:32PM

freedominacup wrote: »

Yes but you haven't applied the appropriate corporate accountancy rules to your calculations stretch. I'm sure some cheap suit will turn up at the appropriate forum shortly to explain using GII logic how your figures are up your arse.

He's a rich Nigerian Prince who will gladly pay you a hefty handling fee once you forward your account details to him so he can access the money his uncle is keeping him from drawing down!

:pac:

freedominacup · 29-07-2016 12:33PM

Buford T. Justice V wrote: »

He's a rich Nigerian Prince who will gladly pay you a hefty handling fee once you forward your account details to him so he can access the money his uncle is keeping him from drawing down!

:pac:

I thought Jim's lad was in Kenya?

Buford T. Justice XIX · 29-07-2016 12:38PM

freedominacup wrote: »

I thought Jim's lad was in Kenya?

I thought he was in Nigeria!

It doesn't work as well with a Kenyan Prince, though:)

stretch film · 29-07-2016 12:56PM

No need for cynicism lads with such a "transparent " pricing structure exclusively in place .

kowtow · 29-07-2016 01:40PM

Buford T. Justice V wrote:

Just seen the spot price in UK hit 30p/l yesterday, for a small quantity but still an eye watering figure

Presumably 2p or more of that is down to recent currency moves...

Timmaay · 31-07-2016 07:45PM

http://www.agriland.ie/farming-news/current-greenfield-us-dairy-projects-could-add-200000t-of-milk-powder-to-market/

Hmmm. May keep the belt buckle well tightened for now. 2bh unless I can get costs comfortably under 20c/l I may start looking more seriously at the plan B.

Buford T. Justice XIX · 31-07-2016 08:40PM

Timmaay wrote: »

http://www.agriland.ie/farming-news/current-greenfield-us-dairy-projects-could-add-200000t-of-milk-powder-to-market/

Hmmm. May keep the belt buckle well tightened for now. 2bh unless I can get costs comfortably under 20c/l I may start looking more seriously at the plan B.

Isn't a lot of that new processing being put up to comply with more stringent specs from buyers and replacing ageing processing plants?

Reading from that article, anyway, a lot of the current processing capacity will be taken out of operation so it will be significantly less than 200k tonnes?

Water John · 31-07-2016 08:52PM

All I see Buford, are plants in Macroom, Charleville, Wexford and soon Belview producing premium infant formula. It is premium because it is being made from milk produced by Irish farmers from grass, but they are the ones not getting any premium for it.
Our share, please.

Buford T. Justice XIX · 31-07-2016 09:10PM

Water John wrote: »

All I see Buford, are plants in Macroom, Charleville, Wexford and soon Belview producing premium infant formula. It is premium because it is being made from milk produced by Irish farmers from grass, but they are the ones not getting any premium for it.
Our share, please.

Listowel, not Charleville, produces the Beingmate milk powder for China but I more or less agree with your point.

PLCs buy the quality assured milk with a wide reputation as being a premium product for commodity prices and sell it at a premium price.

We do get some of it back but only as dividends on any shares we own so in Kerry about a third of the premium is returned to farms.

I doubt we are going to change the system they have in place for paying us but very few are willing to do anything to change the status quo. As it stands, we are little more than indentured servants to milk, beef and sheep processors. We feed on the scraps we are thrown and count ourselves lucky:(

Water John · 31-07-2016 09:43PM

Buford, others don't have shares even.
I thought I saw Charleville credited with the infant formula plant? Minor issue, all in the family.
Like producing free range eggs and not getting any premium for them.

Buford T. Justice XIX · 31-07-2016 10:15PM

https://twitter.com/Tenantfarmer1/status/759334556768010240

Interesting tweet. First time they have seen 3 changes in milk price in a month, thankfully upwards.

whelan2 · 02-08-2016 11:38AM

Fingers crossed http://www.agriland.ie/farming-news/futures-markets-point-to-a-strong-rise-in-todays-global-dairy-trade/

mf240 · 02-08-2016 12:21PM

Water John wrote: »

All I see Buford, are plants in Macroom, Charleville, Wexford and soon Belview producing premium infant formula. It is premium because it is being made from milk produced by Irish farmers from grass, but they are the ones not getting any premium for it.
Our share, please.

I wonder will all these bucket reared children be more docile adults than suckled children!!

flutered · 02-08-2016 01:05PM

there is reports hereabouts of farmers getting a letter saying that the farmers fith 50-100 cowss are to get a premium not to supply milk during oct nov dec, sorry if it has been discussed before

Keepgrowing · 02-08-2016 03:19PM

https://twitter.com/ronh999dairy/status/760478146193924096

Milk Price- Please read Mod note in post #1

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