Milk Price- Please read Mod note in post #1

mahoney_j · 13-06-2015 01:23PM

Looking from outside in re Glanbia can't figure out why guys have such a gripe with the msa.at the moment yet have fixed price schemes which means there's a truck load of money there (Arrabawn don't and don't have cash reserves to enable them to).and it is also able to support milk price by 3 c per litre in a deflating market .once we (Arrabawn) start dropping milk price id be fearful of where it could end up as we ain't adequately fuelled up with money to cushion it.also for any Glanbia guys or whoever looking to join us on back of no msa to sign think long and hard ,we can't carry on with current situation of supplying with no contracts.if and when our price drops below Glanbia/dairy gold there is nothing stopping us leaving once a new supplier agrees to take us in.i think that carrot is just there to hold onto suppliers over last 8/10 months as board and management know we can't afford to loose a big base of suppliers .madness going on at moment with arra trucks driving around Wexford,Carlow,Kilkenny north cork etc collecting milk and dg and Glanbia trucking milk from our area back to their bases .id bet there will be meeting between all 3 before long to discuss options

frazzledhome · 13-06-2015 01:26PM

orm0nd wrote: »

AFAIK .& ( could completely off the ball )

milk pool 2014 was 280m ltrs

there would have been additional milk processed for other co ops

Can non shareholders supply?

mahoney_j · 13-06-2015 01:28PM

frazzledhome wrote: »

Base 27.5

Fook so its 27.5! Plus solids rather than 30.5 plus solids for suppliers with msa signed

mahoney_j · 13-06-2015 01:31PM

frazzledhome wrote: »

Can non shareholders supply?

No requirement to share up,though 2500 shares per 100k supplied.so 2500 per 100 k milk

jaymla627 · 13-06-2015 01:32PM

mahoney_j wrote: »

Fook so its 27.5! Plus solids rather than 30.5 plus solids for suppliers with msa signed

Sure is .27 for each .1 of bf and .63 for each .1 of pr on milk at 28.5 cent you'd want a herd of pure bred jerseys to be getting 6-7 cent over glanbia base price the way things are going at the mineute

kevthegaff · 13-06-2015 01:38PM

I dont know the ins and outs, jerry is more in the know;-), but arrabawn dont require major investment in processing(like belview), 2004 was the last processing facility in kilconnell and we still have 40% more capacity( correct me if im wrong). No plc to pay out!!!, i think kowtow summed it up i think arrabawn were tight on price in the naughties due to investments and maybe wer reeping it now but for how long...

kevthegaff · 13-06-2015 01:42PM

In fairness to c ryan dictator and all jerry you couldnt count on your fingers how many senior managers were on high salarys in the naughties, theyre has been a complete revamp in staff numbers!

mahoney_j · 13-06-2015 01:43PM

kevthegaff wrote: »

I dont know the ins and outs, jerry is more in the know;-), but arrabawn dont require major investment in processing(like belview), 2004 was the last processing facility in kilconnell and we still have 40% more capacity( correct me if im wrong). No plc to pay out!!!, i think kowtow summed it up i think arrabawn were tight on price in the naughties due to investments.

Truck load of money spent last year Kev,and more spent this year on plant in kilconell to double capacity of bottling plant ..lot of money spent from reserves which now leaves us relatively cash poor .hence no fixed price scheme etc

Brown Podzol · 13-06-2015 01:54PM

Ornua CEO Kevin Lane says there is 3c/lt available in savings if the industry would shrink from 18 processors to 5 or 6. Why do we perceiver in maintaining all these co-ops, at the end of the day it's the farmer thats going to pay for all the duplication.

kowtow · 13-06-2015 02:37PM

Brown Podzol wrote: »

Ornua CEO Kevin Lane says there is 3c/lt available in savings if the industry would shrink from 18 processors to 5 or 6. Why do we perceiver in maintaining all these co-ops, at the end of the day it's the farmer thats going to pay for all the duplication.

The farmer will almost certainly pay even more if and when a total monopoly is created upon which he is utterly dependent.

These are very dangerous waters indeed, involving the sort of conflicted corporate interests where Ireland has a very poor track record.

An interesting question to ask yourself is - how much has / will / would co-op shareholding make a difference to your own supply decisions either recently, or in the future? Owning processing assets is not the same business as producing milk, and yet I get the feeling that the line is continually blurred and re-blurred. Suddenly finding yourself a shareholder with a valuable pot of money is all very well, but the decisions made when those investments are crystallised often carry a very big long term price.

It is absolutely vital that value added processors make Ireland their home - no question. But can (or should?) farmers own all of them? I can see a case for volume processing into SMP for example, enabling the farmers own product to be exported, absolutely the same for butter and block cheese - but complex protein extraction, sports nutrition brands? These are, and will increasingly be, high risk high capital ventures which although potentially highly profitable may not actually account for a significant volume of the additional milk we are all hoping to produce.

Dairy farmers have to be sure where their own risk and reward begins and ends, it's no good being told "promise to supply all your milk to us, we've got a secret up our sleeve"...

In the end the business of the dairy farmer is to maximise the price he gets for his milk at the farm gate, and the immediate purchaser (co-op for example) should really be there to guarantee that he can do that in a competitive and transparent way. The only way to do this is to be able to deliver the basic product, at high volume, to the maximum number of competing buyers.

Glanbia & others are great and exciting businesses, with huge potential no doubt. They are potentially interesting investments, and I love them dearly just as I love my local baker.. but when I choose to buy bread from my baker he doesn't demand that I sign up to his bread for years to come, and then make me buy the oven he bakes it in.

kowtow · 13-06-2015 03:08PM

In the interest of not being *too* negative, I'll outline here what would be a truly transparent system and would - should - guarantee the maximum price to farmers within our current infrastructure:

1. Separate the actual milk collection (acquisition & quality testing) process and make it a legal obligation for the co-ops for all farmers in their catchment. Whatever your shareholding relationship with a co-op, the local one will come and get your milk, quality test it, certify status & cell count etc.

2. Let all those who wish to process or purchase milk (including the co-ops themselves of course) bid in real time for the milk supply, in volume lots of a known quality (SCC etc.) at whatever price they need to pay. If they wish to offer a premium price or terms to certain qualified farms (shareholders for example) in return for their investments or input purchases, they can do this. Likewise third parties can bid for premium quality milk, operate supplier pools for known farms, or whatever.

3. If a processor buyer wants to offer a fixed price contract for a set term he can do so transparently, obviously farmers milk will go first to any contract they are obliged to supply under.

4. The co-ops only need to transfer the balance of milk at the end of each day (or week or whatever) between them, in the same way a bank clears foreign exchange or a telephone company clears call minutes with it's competitors. A few lorry loads of milk would shift between the major processors.

This way every farmer would have transparent access to every buyer, the milk collection business would be optimal, traceability would be maintained, the processors (farmer owned or otherwise) would be forced to organise their own affairs to be as efficient as they could be, the co-ops could incentivise input purchases etc. and all sorts of other opportunities would arise along the way - for example it would be possible to provide a *very* effective hedging service to offer farms insurance against price volatility because access to the terminal market would make synthetic contracts possible.

The downside, I suppose, is that a portion of your milk might go unsold (or sell at the clearing price) to the extent that you hadn't signed up to contracts of one sort or another. In times of low demand that milk might be worth very little - but that is a price that we are already paying one way or another, whether it is obvious or not, so what loss is there?

Panch18 · 13-06-2015 06:15PM

kowtow wrote: »

The downside, I suppose, is that a portion of your milk might go unsold (or sell at the clearing price) to the extent that you hadn't signed up to contracts of one sort or another. In times of low demand that milk might be worth very little - but that is a price that we are already paying one way or another, whether it is obvious or not, so what loss is there?

In my opinion you are hugely underestimating the amount of times farmers would get caught with milk in their tank and nobody to buy it, and that would be a complete nono i believe

a hugely risky move for farmers with little or now reward

frazzledhome · 13-06-2015 08:28PM

wats the craic wrote: »

not when people this time last yr were sign thier msa , they said there was no need to share up . they clearly lied to people to sign the msa . they are about to reap wat the sow in the near future .

There is still no need to share up. Your milk will be collected and processed. It was as obvious as hell that shares were required to partake of any wealth generated by co op. Not too long ago that any amount of them could be bought at €1 each.

I totally agree that 27.5c is a shocking price and I raise this at every opportunity, we're all in the same boat. It's not long since we had monies stopped from our milk cheques to deal with the debt in the co op.

We are now at a stage where €102 million has been shared out to members. We now have a co op worth €1.9 billion.

Anyone complaining (not you other poster) about buying shares in this organisation needs to have a chat with themselves.

One massive problem that needs attention are long term suppliers who aren't members. These people are losing badly ATM. Another major issue is parents holding shares instead of passing to the person supplying the milk. While these shares had no value there was no problem passing them on but now its a different story

kowtow · 13-06-2015 09:01PM

Panch18 wrote:

In my opinion you are hugely underestimating the amount of times farmers would get caught with milk in their tank and nobody to buy it, and that would be a complete nono i believe

What happens to that milk now?

orm0nd · 16-06-2015 09:15AM

@ M_J any word of arrabawn price for may ?

mahoney_j · 16-06-2015 09:40AM

orm0nd wrote: »

@ M_J any word of arrabawn price for may ?

Will know later in day lads and post here

Deepsouthwest · 16-06-2015 10:18AM

jaymla627 wrote: »

Moving the goal posts from 5000 euros worth of shares been the qualifying amount irrespective of milk supply to then 10,000 and linked to milk supply is my biggest bug bear, milk manager says on 400,000 thousand litres I will need 13,000 euros worth of shares and as I increase supply will have to increase share holding...
18 months ago they where peddling the line to new entrants how no share holding was needed and boasting about dropping the 1 cent a litre levy on milk to fund belview, they're accounts department must of re done the sums and decided to shaft new suppliers instead of established lads.
Good ploy on their part to alienate the smallest group of suppliers who haven't a leg to stand on once they have the contract signed along with their agreement with the other bigger co-ops not to take uncontracted glanbia suppliers who want to move they simply can't lose no matter what policies they implement this group

Can't understand why new entrants have such an issue with having to share up to supply milk to their chooses co-op.
Just out of a partnership here, so have to buy a lot of shares, which I have no issue with, having already bought nearly €10k worth of shares a few yrs ago due to a depopulation that kept me out of milk production at a time when shares were given out based on milk supplied.
Why should established farmers who funded the development of these coops over the yrs just let in new entrants to now use their facilities to manufacture and market their milk at no extra cost?

Buford T. Justice XIX · 16-06-2015 10:45AM

Strong rumours that Kerry are holding the price for the month but expect a big drop next month.

And Kerry expect to be leading the milk price for the rest of the year*

*may involve turning milk price league upside down

arctic8dave · 16-06-2015 11:11AM

Dairygold expected to drop by 2 cent minimum price to set on Friday

Buford T. Justice XIX · 16-06-2015 12:53PM

Buford T. Justice V wrote: »

Strong rumours that Kerry are holding the price for the month but expect a big drop next month.

And Kerry expect to be leading the milk price for the rest of the year*

*may involve turning milk price league upside down

Well you're some gobdaw.

2c cut!

whelan2 · 16-06-2015 12:55PM

Buford T. Justice V wrote: »

Well you're some gobdaw.

2c cut!

whats it at now?

KCTK · 16-06-2015 01:00PM

Buford T. Justice V wrote: »

Well you're some gobdaw.

2c cut!

Trust Kerry.....

kevthegaff · 16-06-2015 01:05PM

Cant see the great arrabawn holding

Buford T. Justice XIX · 16-06-2015 01:57PM

whelan2 wrote: »

whats it at now?

That's a good question!

From last months statement

@Standard constituents F 3.840, P3.357 31.482c

@ Average constituents F 3.781, P3.283 30.791c

No idea how to translate that to 3.6/3.3, which is probably the whole point of it:mad:

degetme · 16-06-2015 02:12PM

Buford T. Justice V wrote: »

That's a good question!

From last months statement

@Standard constituents F 3.840, P3.357 31.482c

@ Average constituents F 3.781, P3.283 30.791c

Standard is the base price at those solids

Average constituents is what the average
milk supplier received for the month at those solids

Buford T. Justice XIX · 16-06-2015 02:15PM

degetme wrote: »

Standard is the base price at those solids

Average constituents is what the average
milk supplier received for the month at those solids

Aye, but translating that to prices at 3.6, 3.3 to compare to what others are paying is made unnecessarily difficult with a different base constituents levels to 3.6/3.3

slippy wicket · 16-06-2015 02:20PM

You'd think any issues with Glanbia connect would've been sorted out by now.
On agrilink you could check your statement for the previous month from midnight on 16th.
On the new 'simplified' website you cannot see your own net price as of now, let alone a statement.

atlantic mist · 16-06-2015 06:12PM

Deepsouthwest wrote: »

Can't understand why new entrants have such an issue with having to share up to supply milk to their chooses co-op.

timing and cost is what has me in a bit of a heap over shares,
was originally told sharing up wouldnt b required so planned on that basis had our coop been transparent on the issue i would have planned different,
i would much prefer to put the money into my business not to be tied up in financially sound coop as ballyragget and belview are serious facilities cant say the same at home thou
how did farmers fund the coops over the years? lower prices
understand the need to share up as without it i am going to get paid lower prices and need the investment vehicle dividends to top up my low product price

frazzledhome · 16-06-2015 07:12PM

http://www.farmersjournal.ie/kerry-aurivo-carbery-cut-may-milk-price-183303/

jaymla627 · 16-06-2015 07:51PM

Deepsouthwest wrote: »

Can't understand why new entrants have such an issue with having to share up to supply milk to their chooses co-op.
Just out of a partnership here, so have to buy a lot of shares, which I have no issue with, having already bought nearly €10k worth of shares a few yrs ago due to a depopulation that kept me out of milk production at a time when shares were given out based on milk supplied.
Why should established farmers who funded the development of these coops over the yrs just let in new entrants to now use their facilities to manufacture and market their milk at no extra cost?

No issue whatsoever, but can't understand why this share issue thing wasn't flagged last year and mechanisms put in place that suppliers who werent shared up where given the opertiunity to do so and thus avail of price supports this year.
Our maybe they might have the decency to issue shares to suppliers and start deducting said monies for shares when milk price rebounds goes above say 30 cent a litre, down 5k at present on april/may milk and with milk price only going one way it would of want a long way towards filling a few gaps that combined with superlevy fines it's going to leave us working of a very abysmal base price for the year with a lot of other lads in the same boat...
Luckily not solely reliant on dairying here but lads who are with big borrowings on top of superlevy fines are going to be under fair pressure to keep the wolf from the door and this share issue isn't going to help them one bit

Milk Price- Please read Mod note in post #1

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