Milk Price- Please read Mod note in post #1

frazzledhome · 12-08-2015 01:54PM

Blackgrass wrote: »

El Niño was highlighted 2+ months ago and they reckon this could be extremely severe and usually coincides with strengthening grain price

Barley needs to be trading at close to €200/ tonne to maintain milk price

Blackgrass · 12-08-2015 02:23PM

frazzledhome wrote: »

Barley needs to be trading at close to €200/ tonne to maintain milk price

,in Ireland.

whelan2 · 12-08-2015 02:25PM

frazzledhome wrote: »

Barley needs to be trading at close to €200/ tonne to maintain milk price

what is it at the moment?

WheatenBriar · 12-08-2015 02:27PM

whelan2 wrote: »

what is it at the moment?

Closer to 100 than 200 I'd say

Greengrass1 · 12-08-2015 03:05PM

WheatenBriar wrote: »

Closer to 100 than 200 I'd say

140 I think for feed.
170 for malting

kowtow · 12-08-2015 05:51PM

yosemitesam1 wrote: »

So would you need maybe five or six different powder contracts (whey,smp etc) and the co-op to guarantee some sort of a formula based minimum price? What sort of volumes would a contract need to be liquid enough?

The contract in this sense is just the specification and size of a "lot" - the minimum unit that can be bought or sold in a futures market.

The US milk futures contract is over about 90,000 litres (200K lbs I think).. all contracts are sized for the amount of product that will fit in a railway car - 5000 bushels for wheat, for example. Oddly on the floor of the exchange all contracts are referred to as "cars" - even the financial ones - although who decided how many T-bill futures would fit in a railway car is a complete mystery.

As far as a futures market is concerned the co-op wouldn't necessarily come into it - and yes, you would need a standard contract specification to cover a particular grade / makeup of milk powder which was capable of delivery. I suspect that the GDT has this addressed in one form or another as well.

trixi2011 · 12-08-2015 05:55PM

Got word this week that milk company are holding the price at 21.8 p for sep and dropping down to 21 in Oct lads that are protesting over here must be making some bit of an impact

Dawggone · 12-08-2015 05:58PM

kowtow wrote: »

Oddly on the floor of the exchange all contracts are referred to as "cars" - even the financial ones - although who decided how many T-bill futures would fit in a railway car is a complete mystery.

Thanks Kowtow, I could never understand the "car" terminology.

Dawggone · 12-08-2015 06:00PM

trixi2011 wrote: »

Got word this week that milk company are holding the price at 21.8 p for sep and dropping down to 21 in Oct lads that are protesting over here must be making some bit of an impact

"The squeaky wheel always gets the fat (grease)"...

Milked out · 12-08-2015 06:01PM

trixi2011 wrote: »

Got word this week that milk company are holding the price at 21.8 p for sep and dropping down to 21 in Oct lads that are protesting over here must be making some bit of an impact

The thing I saw in YouTube where farmers were in a supermarket asking consumers to pay more is the wrong way I reckon, it's the margin the supermarkets are taking is the problem. Is it Morrisons putting out a new branded milk with 10p extra towards the farmer? If that's more expensive than the stuff in the fridge next to it and consumers dont buy it the supermarket have their excuse done for em. Could have details wrong there but seems like it would backfire on the farmers.

kowtow · 12-08-2015 06:16PM

Dawggone wrote: »

Thanks Kowtow, I could never understand the "car" terminology.

funny isn't it, I could always follow floor audio with thick Chicago accents at warp speed while watching five screens full of prices and rarely miss a tick... but when I go to the local mart I sit beside the ring like a mesmerised puppy, totally unable to follow the action.

Takes practice.

Dawggone · 12-08-2015 06:21PM

kowtow wrote: »

funny isn't it, I could always follow floor audio with thick Chicago accents at warp speed while watching five screens full of prices and rarely miss a tick... but when I go to the local mart I sit beside the ring like a mesmerised puppy, totally unable to follow the action.

Takes practice.

Lol. That's it. Practice.

trixi2011 · 12-08-2015 06:34PM

Milked out wrote: »

The thing I saw in YouTube where farmers were in a supermarket asking consumers to pay more is the wrong way I reckon, it's the margin the supermarkets are taking is the problem. Is it Morrisons putting out a new branded milk with 10p extra towards the farmer? If that's more expensive than the stuff in the fridge next to it and consumers dont buy it the supermarket have their excuse done for em. Could have details wrong there but seems like it would backfire on the farmers.

I think them lads protesting are going about it the wrong way there putting so much energy into fighting the milk price when they should be at home figuring out how they could be lowering there costs .

Dawggone · 12-08-2015 06:42PM

trixi2011 wrote: »

I think them lads protesting are going about it the wrong way there putting so much energy into fighting the milk price when they should be at home figuring out how they could be lowering there costs .

Is it not possible to do both Trixi?

Milked out · 12-08-2015 06:47PM

trixi2011 wrote: »

I think them lads protesting are going about it the wrong way there putting so much energy into fighting the milk price when they should be at home figuring out how they could be lowering there costs .

Agree with that definately, but if they are to protest they should try to get pressure/ public opinion to bare on supermarkets instead asking consumers to pay more it would be better than what thye are at, particularly for liquid milk as it's a domestic market

Brown Podzol · 12-08-2015 08:13PM

trixi2011 wrote: »

I think them lads protesting are going about it the wrong way there putting so much energy into fighting the milk price when they should be at home figuring out how they could be lowering there costs .

I agree with them. I hope they tear up the f'n place. If politicians interfere with the price of milk by putting embargoes on Russia and the only people to pay are the primary producers then they must suffer the consequences. I didn't hear of any politician suffering a pay cut since the embargoes.

Buford T. Justice XIX · 12-08-2015 08:16PM

kowtow wrote: »

funny isn't it, I could always follow floor audio with thick Chicago accents at warp speed while watching five screens full of prices and rarely miss a tick... but when I go to the local mart I sit beside the ring like a mesmerised puppy, totally unable to follow the action.

Takes practice.

https://v.cdn.vine.co/r/videos/DAEF4A6B9D1158884140104732672_27d1302a331.5.1.8797355555200404019.mp4?versionId=c.0WBwpN1jxwVkloZnr9doOr2PVQvTWq

I still can't imbed vines:rolleyes:

kowtow · 12-08-2015 08:22PM

I think drawing the public's attention to the price of milk compared with cost of production is actually a very good starting point. "Fair Trade" products from coffee onwards have all worked pretty well given sufficient publicity, and attract a premium simply in respect of the relative sustainability of the farm income.

What is more difficult is figuring out the degree to which UK prices (or US prices for that matter) are becoming coupled to the global powder trade. My impression is that liquid milk prices in the UK are dropping because of the global glut into which the *surplus* manufacturing milk has to be sold... but I could be wrong.

In Ireland of course that global glut is our primary target market by volume, so hitting the supermarkets would be a complete sideshow (if it wasnt for the Euro disguising the drop pro tem).

Edit: have a feeling next week's Gdt might be important.

1. NZ farmers showing signs of capitulation after last week. When people suggest cancelling an auction because they don't like the prices then it won't be too long before an extreme is reached.

2. Chinese devaluation ought to be very bearish for Chinese dairy demand. Economy slowing faster and imports now more expensive. Any speculative chinese buyers should now run away fast.

3. Grains fell 5% today

All dreadful signs which suggest that if prices were to stabilise or even rise on decent volume next week we might be seeing the whites of the markets eyes and getting towards the end of a phase.

Of course they might well fall further. Worth watching closely.

Milked out · 13-08-2015 03:02PM

http://www.agriland.ie/farming-news/fonterra-to-cut-significantly-the-volume-of-product-sold-on-gdt/

Buford T. Justice XIX · 13-08-2015 03:31PM

Any news on the Lakeland price yet?

kowtow · 13-08-2015 04:06PM

Milked out wrote: »

http://www.agriland.ie/farming-news/fonterra-to-cut-significantly-the-volume-of-product-sold-on-gdt/

Concealing the price is the last refuge of the damned. It conceals the market clearing price;

They tried this tactic in December / January IIRC and there was a temporary pop in the price until buyers realised they were being gamed. Now they are going to do the same again, messing with the volume (which is why I added the caveat of decent volume in my post above) and what could have been a really informative GDT auction will be meaningless whether it rises or falls.

solwhit12 · 13-08-2015 04:27PM

Buford T. Justice V wrote: »

Any news on the Lakeland price yet?

Down a cent to 27

freedominacup · 13-08-2015 08:23PM

kowtow wrote: »

I think drawing the public's attention to the price of milk compared with cost of production is actually a very good starting point. "Fair Trade" products from coffee onwards have all worked pretty well given sufficient publicity, and attract a premium simply in respect of the relative sustainability of the farm income.

What is more difficult is figuring out the degree to which UK prices (or US prices for that matter) are becoming coupled to the global powder trade. My impression is that liquid milk prices in the UK are dropping because of the global glut into which the *surplus* manufacturing milk has to be sold... but I could be wrong.

In Ireland of course that global glut is our primary target market by volume, so hitting the supermarkets would be a complete sideshow (if it wasnt for the Euro disguising the drop pro tem).

Edit: have a feeling next week's Gdt might be important.

1. NZ farmers showing signs of capitulation after last week. When people suggest cancelling an auction because they don't like the prices then it won't be too long before an extreme is reached.

2. Chinese devaluation ought to be very bearish for Chinese dairy demand. Economy slowing faster and imports now more expensive. Any speculative chinese buyers should now run away fast.

3. Grains fell 5% today

All dreadful signs which suggest that if prices were to stabilise or even rise on decent volume next week we might be seeing the whites of the markets eyes and getting towards the end of a phase.

Of course they might well fall further. Worth watching closely.

Glanbia shareholders need to organise a whiparound and get kowtow enough shares to make him eligible to stand for a seat on the board and then get him onto it.

Greengrass1 · 14-08-2015 05:21PM

http://www.farmersjournal.ie/glanbia-cuts-base-milk-price-by-1c-l-for-july-187599/
Second last paragraph. Is that saying any suppliers that didn't get bonuses will get everything they would have gotten when they become a member

WheatenBriar · 14-08-2015 05:25PM

Aldi are committed now along with morrisons in the UK to paying 28 pence which is the equivalent of 36 cent...

Glanbia are a co operative?

Me arse

kowtow · 14-08-2015 05:39PM

freedominacup wrote: »

Glanbia shareholders need to organise a whiparound and get kowtow enough shares to make him eligible to stand for a seat on the board and then get him onto it.

Don't think they'd like me. I'd be inclined to sell the board room seats and hold meetings standing up in the yard.

Rather than whingeing on about price supports and EU intervention why don't the farmers organisations insist that co-ops publish transparent figures on a quarterly basis - the Glanbia price move today suggests that 25c is the underlying manufacturing price for July. We need to know, precisely, what value the co-ops are receiving for our milk when it goes out the door.

So what is happening to the balance sheets of other co-ops who end up paying 25c or greater for July? Or is GIIL actually receiving less in the marketplace for all the added value? Or is it now the case that Glanbia expect the farmers who *havent* signed an MSA to fund their investment programme by effectively discounting the milk price via a round robin with the loyalty bonus.

Edit: and as for the IFA they have NO business whatsoever advising co-ops to consider mergers. The co-ops & processors are quite greedy enough to think this one through on their own. The IFA is a farmers organisation not a corporate consultancy or an investment adviser. Whether or not a co-op merges is the business of it's shareholders, the fact that they happen to be farmers is a coincidence.

Those who represent farmers should have a cold towel on their heads figuring out the *dangers* to milk producers from bad mergers rather than the supposed advantages and working out how to ensure that every dairy farmer in this country is able to have his milk brought to a competitive marketplace in a completely transparent manner.

kevthegaff · 14-08-2015 06:10PM

kowtow wrote: »

Don't think they'd like me. I'd be inclined to sell the board room seats and hold meetings standing up in the yard.

Rather than whingeing on about price supports and EU intervention why don't the farmers organisations insist that co-ops publish transparent figures on a quarterly basis - the Glanbia price move today suggests that 25c is the underlying manufacturing price for July. We need to know, precisely, what value the co-ops are receiving for our milk when it goes out the door.

So what is happening to the balance sheets of other co-ops who end up paying 25c or greater for July? Or is GIIL actually receiving less in the marketplace for all the added value? Or is it now the case that Glanbia expect the farmers who *havent* signed an MSA to fund their investment programme by effectively discounting the milk price via a round robin with the loyalty bonus.

Edit: and as for the IFA they have NO business whatsoever advising co-ops to consider mergers. The co-ops & processors are quite greedy enough to think this one through on their own. The IFA is a farmers organisation not a corporate consultancy or an investment adviser. Whether or not a co-op merges is the business of it's shareholders, the fact that they happen to be farmers is a coincidence.

Those who represent farmers should have a cold towel on their heads figuring out the *dangers* to milk producers from bad mergers rather than the supposed advantages and working out how to ensure that every dairy farmer in this country is able to have his milk brought to a competitive marketplace in a completely transparent manner.

I had a few guys persuading me to join glanbia in the beginning of the yesr, all i heard was higher end products, bellview, the future etc. I asked who was paying for belview... i have nothing against glanbia but i agree with kowtow how come with higher end products its not trickling down to the supplier.
1. Shareholders dividents
2. Major Plant
3.dilution of shares
What will the ifa do if there is only 1 co op in the country, say a need for fragmentation! We do need different co ops to set benchmarks for prices however bad they are.

jaymla627 · 14-08-2015 07:24PM

kevthegaff wrote: »

I had a few guys persuading me to join glanbia in the beginning of the yesr, all i heard was higher end products, bellview, the future etc. I asked who was paying for belview... i have nothing against glanbia but i agree with kowtow how come with higher end products its not trickling down to the supplier.
1. Shareholders dividents
2. Major Plant
3.dilution of shares
What will the ifa do if there is only 1 co op in the country, say a need for fragmentation! We do need different co ops to set benchmarks for prices however bad they are.

I have nearly six grand put towards belview at this stage after today's cuts, but I shouldn't be complaining I'm going to get shares in lieu of it, it's like a lad pissing on your cornflakes and telling you its milk

Buford T. Justice XIX · 14-08-2015 07:25PM

kowtow wrote: »

Don't think they'd like me. I'd be inclined to sell the board room seats and hold meetings standing up in the yard.

Rather than whingeing on about price supports and EU intervention why don't the farmers organisations insist that co-ops publish transparent figures on a quarterly basis - the Glanbia price move today suggests that 25c is the underlying manufacturing price for July. We need to know, precisely, what value the co-ops are receiving for our milk when it goes out the door.

So what is happening to the balance sheets of other co-ops who end up paying 25c or greater for July? Or is GIIL actually receiving less in the marketplace for all the added value? Or is it now the case that Glanbia expect the farmers who *havent* signed an MSA to fund their investment programme by effectively discounting the milk price via a round robin with the loyalty bonus.

Edit: and as for the IFA they have NO business whatsoever advising co-ops to consider mergers. The co-ops & processors are quite greedy enough to think this one through on their own. The IFA is a farmers organisation not a corporate consultancy or an investment adviser. Whether or not a co-op merges is the business of it's shareholders, the fact that they happen to be farmers is a coincidence.

Those who represent farmers should have a cold towel on their heads figuring out the *dangers* to milk producers from bad mergers rather than the supposed advantages and working out how to ensure that every dairy farmer in this country is able to have his milk brought to a competitive marketplace in a completely transparent manner.

The value added dividend in Kerry is paid out by the PLC while the farmers are paid commodity prices for their product from which the value added is derived.

It's no different to Glanbia, just another PLC paying all the dividends of the value added to the owners/shareholders while those they purchase the raw materials from get the lowest possible price they can afford to pay so they can bump up the dividends.

kowtow · 14-08-2015 07:33PM

It's a bit like the Fonterra announcement that they were holding back volume so they could sell it through their "value added" channels.

If there was demand for it at a higher price, why hadn't they acted before this?

On the other hand how do we know that Glanbia aren't actually the worst offender? The others seem to be paying a loyalty bonus (i.e. supporting the price from retained profits) without being explicit about the extent of it.

Not being subject to this regime myself I have no idea whether or to what extent they come clean about things at the end of the year but it strikes me that things are opaque enough to make things uncomfortable for producers when co-ops keep talking about investment (and presumably paying salaries) while producing farmers face a year with - potentially - no personal drawings at all.

If co-ops need to take the food out of farming families mouths in order to invest for the future, they owe us complete transparency over how our milk is valued throughout the system and what the sales levels are. Only then can members see what is investment, and what is inefficiency or market weakness and make decisions accordingly.

Milk Price- Please read Mod note in post #1

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