Milk Price III

whelan2 · 13-09-2017 07:54AM

It's only a few weeks ago that lads were on here blowing about the great allocations they got in the latest scheme, what loss would they be incurring now? I know it's swings and roundabouts but must be a fair sickner all the sme

orm0nd · 13-09-2017 08:28AM

whelan2 wrote: »

It's only a few fews ago that lads were on here blowing about the great allocations they got in the latest scheme, what loss would they be incurring now? I know it's swings and roundabouts but must be a fair sickner all the sme

when arrabawn announced their's I said it was too little and too late, so far i'm right

was very suspicious about a statement CR made last back end re milk price

on hindsight was it to flush people into the FPS ?

alps · 13-09-2017 09:25AM

Fixing price in the US and fixing here is very different.

If you fix here, you agree to fix an amount to be determined by someone else, while also committing your full supply for the duration of that fix, at a price to be freely determined by the processor.

US farmers can fix an agreed amount for an agreed price through the trading mechanisms they have, and trade the rest elsewhere.

This difference should not be overlooked when assessing at what price you commit your full supply...

kowtow · 13-09-2017 09:27AM

mf240 wrote: »

Think you can fix the price of coke and hookers over five years in the next sceme:D:D

Yes but you have to agree to use their detox facilities and STD clinic, which some say are not the best in the market.

There is a small rebate on repeat visits.

kowtow · 13-09-2017 09:39AM

Keepgrowing wrote: »

There's serious heat coming into the milk price with only one main product leading this sharp rise. Butter is widely used by food companies but they'll be looking to substitute soon.

Perhaps the base price of butter has risen but I'm not sure and I'll certainly be hedging from here on, by that I mean fixing as the price rises to cover my costs if it falls. If it doesn't I'll view it as an insurance.

I think there is a real possibility that "butter is back" and will be back for the long term - now that today's middle aged consumers have begun to realize that the polyunsaturated manufactured rubbish sold to their parents as a healthy alternative to butter might well have killed as many as it cured.

Also with sugar and fat content under pressure in processed foods manufacturers will also be turning to "natural" fats as clean label alternatives and - like honey - butter might fit the bill I think in some cases.

If I am right - that is all good news for the longer term and especially for Ireland since butter is the one place where our quality, production profile & price meet our cultural history - but however good it may be in future, it isn't going to keep the WMP reference prices up all on it's own, and sooner or later the milk price will drop back. Plenty of countries, not least UK & US, able to supply a lot more profitably than us and in quantity given the state of currency markets and input prices.

The real question is, given a possible structural shift in the dairy fat market which would appear to suit Ireland, have we got the flexibility and intelligence to respond?

Water John · 13-09-2017 09:46AM

Can't we convert some of the costly cyclone dryers into butterchurns!!!

Farmer Ed · 13-09-2017 09:53AM

Fixed or not fixed in a properly run Co Op at the moment the fixed price milk is subsidising the price of the milk that's not fixed. In the event of a downtown it would be the other way around. It could be argued that while fixed pricing will guarantee a price for the amount of milk fixed it will also ad to the volatility in price for the remaining milk. The pie will always be the same size the only difference is the way the pie is divided. Just smoke an mirrors in the absence of a co op having forward sold on the back of a fixed price scheme. This is not the case.

Also I am reliably told that some co ops forward sold butter and as those contracts run out we should see even more of a return for butter in the coming months.

mahoney_j · 13-09-2017 10:39AM

orm0nd wrote: »

when arrabawn announced their's I said it was too little and too late, so far i'm right

was very suspicious about a statement CR made last back end re milk price

on hindsight was it to flush people into the FPS ?

It didn't work as uptake was well below expected. I fixed a good portion and happyveith decision even though in in negative atm

Farmer Ed · 13-09-2017 11:04AM

Water John wrote: »

Can't we convert some of the costly cyclone dryers into butterchurns!!!

Maybe they could be used to remove some of the moisture from the hot air that was released when announcing their construction.

greenfield21 · 13-09-2017 11:07AM

So are we going to see a new phase of butter plant construction or is that a mad idea.

whelan2 · 13-09-2017 11:09AM

Where is the 1 cpl top up coming from?

Farmer Ed · 13-09-2017 11:18AM

greenfield21 wrote: »

So are we going to see a new phase of butter plant construction or is that a mad idea.

They must have plenty capacity for that as a lot seems to have been diverted in to butter already. All the milk going in to plants is separated already. Only extra investment is butter churns and Ornua has plenty of those.

alps · 13-09-2017 11:39AM

Is it true that glanbia are paying a top up of 1c/l on fixed price milk?

Does this mean that there was a floating or reserve 1c leftover somewhere in the system when a specific amount of producers milk was matched to a customers demand?

Did the company not achieve the maximum at that time for its producer under the agreement?

Or, is this an admission, of many farmers suspicions, that there never was a customer?

Interesting

George Sunsnow · 13-09-2017 11:47AM

alps wrote: »

Is it true that glanbia are paying a top up of 1c/l on fixed price milk?

Does this mean that there was a floating or reserve 1c leftover somewhere in the system when a specific amount of producers milk was matched to a customers demand?

Did the company not achieve the maximum at that time for its producer under the agreement?

Or, is this an admission, of many farmers suspicions, that there never was a customer?

Interesting

Glanbia make their own rules
Most of the council members are in Big to the fixed schemes
There would have been holy war if they were left out of the top up
Especially with it meaning a 5c plus differential
On a million litres that's a lot of money in a year
Your last sentence is possible too

freedominacup · 13-09-2017 12:11PM

whelan2 wrote: »

Where is the 1 cpl top up coming from?

Out of the budgets for milk purchasing from 2019-2024. Kind of a pay it forward job.

kowtow · 13-09-2017 01:00PM

freedominacup wrote:

Out of the budgets for milk purchasing from 2019-2024. Kind of a pay it forward job.

Are they signalling that they want less new suppliers in future?

K.G. · 13-09-2017 02:05PM

Even at current butter prices which is enevitably going to lead to subsitution,butter/skim is not the highest returning use for a litre of milk.until someone finds a solution to the skim milk problem at the moment butter is going to contribute nothing to increased milk prices

freedominacup · 13-09-2017 02:10PM

kowtow wrote: »

Are they signalling that they want less new suppliers in future?

Honestly it's impossible to be cynical in relation to glanbia.

Farmer Ed · 13-09-2017 02:27PM

K.G. wrote: »

Even at current butter prices which is enevitably going to lead to subsitution,butter/skim is not the highest returning use for a litre of milk.until someone finds a solution to the skim milk problem at the moment butter is going to contribute nothing to increased milk prices

There is a solution for skim, split it in to casein and whey.

My source in a Co Op tells me we haven't even seen the full benefit of the butter recovery passed back to the farmer yet as the co ops had too much forward sold before the upturn. What could save us is the distinction being made between grass fed butter and indoor butter. The health claims are all stressing the importance of grass fed. That is where we can compete as cheap grain is not a real competitor.

mahoney_j · 13-09-2017 02:43PM

Farmer Ed wrote: »

There is a solution for skim, split it in to casein and whey.

My source in a Co Op tells me we haven't even seen the full benefit of the butter recovery passed back to the farmer yet as the co ops had too much forward sold before the upturn. What could save us is the distinction being made between grass fed butter and indoor butter. The health claims are all stressing the importance of grass fed. That is where we can compete as cheap grain is not a real competitor.

I agree but butter is scarce and dear ,buyers want butter do they care if grass fed or tmr fed ,if grass fed more in demand then we in this country should be receiving a premium .........don't think we are

Water John · 13-09-2017 02:52PM

Any one who has ever studied marketing will know about differentiation and USP to gain your premium.
Certainly in the infant formula business we have given all that advantage and return, to the brands.

Farmer Ed · 13-09-2017 02:55PM

mahoney_j wrote: »

Farmer Ed wrote: »

There is a solution for skim, split it in to casein and whey.

My source in a Co Op tells me we haven't even seen the full benefit of the butter recovery passed back to the farmer yet as the co ops had too much forward sold before the upturn. What could save us is the distinction being made between grass fed butter and indoor butter. The health claims are all stressing the importance of grass fed. That is where we can compete as cheap grain is not a real competitor.

I agree but butter is scarce and dear ,buyers want butter do they care if grass fed or tmr fed ,if grass fed more in demand then we in this country should be receiving a premium .........don't think we are

Yes we should be receiving a premium and I once all the forward sold contracts run out hopefully we will be. The funny thing now is the only question hanging over milk price is what will the protein element of the milk be worth? How times have changed in such a short space of time.

kowtow · 13-09-2017 06:56PM

mahoney_j wrote: »

I agree but butter is scarce and dear ,buyers want butter do they care if grass fed or tmr fed ,if grass fed more in demand then we in this country should be receiving a premium .........don't think we are

It would be interesting to see a full year of like for like Kerrygold results, especially splitting out new markets... i.e. to isolate the organic growth from the pat-on-the-back international new market strategies. I don't doubt for a moment that our ministers, departments, and quangos, as well as Ornua are doing sterling work opening up new markets but just this once I'd like to understand whether Irish butter is actually walking off the shelves of it's own accord in a way it hasn't done for a while.

If it is, by all means keep up the market development, but it might be a sign of a changing climate for butter and potential for a real premium for Irish milk - not one which relies on a laboratory taking out all the elements which make the milk uniquely Irish.

If butter is about to enter a new era I'd like to see less talk of innovation and more joined up work between bord bia and bord failte.

Then we'd be on the right road.

mf240 · 13-09-2017 07:38PM

I wouldn't like them to go all out butter and lose concentration on other options. But I don't think butter is a bubble either. It's now seen as healthier than the alternatives and rightly so.

rangler1 · 13-09-2017 07:44PM

kowtow wrote: »

It would be interesting to see a full year of like for like Kerrygold results, especially splitting out new markets... i.e. to isolate the organic growth from the pat-on-the-back international new market strategies. I don't doubt for a moment that our ministers, departments, and quangos, as well as Ornua are doing sterling work opening up new markets but just this once I'd like to understand whether Irish butter is actually walking off the shelves of it's own accord in a way it hasn't done for a while.

If it is, by all means keep up the market development, but it might be a sign of a changing climate for butter and potential for a real premium for Irish milk - not one which relies on a laboratory taking out all the elements which make the milk uniquely Irish.

If butter is about to enter a new era I'd like to see less talk of innovation and more joined up work between bord bia and bord failte.

Then we'd be on the right road.

Any one that tried selling milk locally around here thinking their milk is something different have gone out of business.
Hence, milk is just milk

Buford T. Justice XIX · 13-09-2017 07:45PM

mf240 wrote: »

I wouldn't like them to go all out butter and lose concentration on other options. But I don't think butter is a bubble either. It's now seen as healthier than the alternatives and rightly so.

Two years is a long time in Health studies.

Two years ago few would have thought we would see a day where butter was hailed as an extremely healthy option so two years again could see butter or some other constituent branded as a curse with a drop in price again.

Water John · 13-09-2017 07:50PM

The lads selling Connemara Lamb are wasting their time so, Rangler.
Family on, This Farming Life tonight, in Scotland doing home milk deliveries. Charging £1.90/two litres. A lot dearer than the shops, go figure?

mf240 · 13-09-2017 07:50PM

rangler1 wrote: »

Any one that tried selling milk locally around here thinking their milk is something different have gone out of business.
Hence, milk is just milk

Someday you'll post something positive and we'll have to send someone to check on you.:D:D

rangler1 · 13-09-2017 07:57PM

Water John wrote: »

The lads selling Connemara Lamb are wasting their time so, Rangler.
Family on, This Farming Life tonight, in Scotland doing home milk deliveries. Charging £1.90/two litres. A lot dearer than the shops, go figure?

Paying €1.50ltr for milk at the door here....and it's just milk, just got fed up of getting up in the morning and thinking f..k I forgot to get milk

Water John · 13-09-2017 07:59PM

Organic milk was north of 40 cent last year when milk was in the low 20s.
But sure, milk is milk.
Milk is worth what the consumer decides it's worth. But we also have influence on what the consumer thinks.

€1.50 per litre? Are you sure it's milk and not poitin, at that price.

Milk Price III

Comments