Milk Price- Please read Mod note in post #1

frazzledhome wrote: »

Only bit of "cotton wool" is him predicting a price rise in 2016, backs up with no reasons why.

His point about Coops subbing price is correct and I've been saying it since April and getting lambasted for it. Simple fact all coops are subbing price and will need to continue to do so till price rises or money runs out.

My thoughts exactly.

When Coveney says "recover" what does he mean? Will prices recover to last years levels, to profitable levels, or will global prices just retrace a little of the recent falls? In a years time will he be patting himself on the back because the patient is "a bit less dead".

If he - and the other talking heads in the press lately - really can predict commodity prices with the certainty they pretend then I could give them any number of jobs on trading desks worldwide with salaries that would make even an Irish politician blush.

frazzledhome

WheatenBriar wrote: »

Not all coop's are subbing base price from their margin as you know
At least one of them is subbing base price from the farmers own money whilst protecting their own margin

Their own margin is the coops margin. How come you can't connect the two as they are in real life? Isn't it a great position to be in being able to protect members by subbing price while not compromising margin. Can any other coop stand up and say this?

Dividend due to share holders in 2018 and you can be sure that'll be paid as Plc are due 40% of it. Siobhan Talbot won't tolerate target not being met.

I know I'll be hit hard but them's the facts, we may not like it but we made the decision. Pulling down over 30c/litre while we're deep in crisis, I can only be happy with where we are compared to what was predicted.

The money is there to continue subbing next spring when it's really needed

frazzledhome wrote: »

Their own margin is the coops margin. How come you can't connect the two as they are in real life? Isn't it a great position to be in being able to protect members by subbing price while not compromising margin. Can any other coop stand up and say this?

Oh I think I've a clear sight of whats going on
Other co op's are subbing from margin
GII are not
I mean which do you think is worth more,the average glanbia dividend or 3c a litre extra to the average dairy herd?

The vast bulk of glanbia's plc profits are earned independent of the Irish dairy farmer

GII are not a real co operative and the evidence of that is how its subbing milk price under the direction of its financial markets slave and real ownership,the plc by not allowing gii's margin to drop a little (like other co op's do)

If it was a real competent co operative farmer controlled it would be foresaking some margin to protect milk price not raiding farmers dividends and shares earned mostly via the increasingly successful global conglomerate that is the plc
The latter is a giant ruse if you ask me

But how and ever for GII suppliers sake,I hope belview succeeds but to be brutally honest if its China we're chasing, those guys have an awful lot of form learning and then doing it at home themselves eventually

boggerman1

I see the president of macra wants the money from the EU to be given to young farmer cause they borrowed a lot of money to build fancy buildings.nobody put a gun to their heads to sink themselves to their necks on debt.

While I'm in the mood here is German & Ireland milk vs oil for the same period with some very rough rebasing.

Oil was left in dollars so not completely sensible but enough to see the relationship.

WheatenBriar wrote: »

GII are not a real co operative and the evidence of that is how its subbing milk price under the direction of its financial markets slave and real ownership,the plc by not allowing gii's margin to drop a little (like other co op's do)

If it was a real competent co operative farmer controlled it would be foresaking some margin to protect milk price not raiding farmers dividends and shares earned mostly via the increasingly successful global conglomerate that is the plc
The latter is a giant ruse if you ask me

Whether to sub from the balance sheet or the current year has very little relevance unless your membership is changing and old suppliers are in effect subbing new.

Either way, there is nothing heroic about a co-op keeping hold of a farmers earned profits and offering him them back (sometimes on terms) when times are hard. If you can run a dairy herd in today's market you can certainly operate a piggy bank, which is all that is happening here.

What is important is an element of transparency, which in this case GIIL seem to have achieved whether or not they intended to do so.

Because without transparency you simply don't know how good a job the co-op is doing of taking your milk to market. And in the end, they are the ones with the lorries, and that is what you want them to do.

kowtow wrote: »

Either way, there is nothing heroic about a co-op keeping hold of a farmers earned profits and offering him them back (sometimes on terms) when times are hard. If you can run a dairy herd in today's market you can certainly operate a piggy bank, which is all that is happening here.

With respect its not at all whats happening here,a farmers shares and dividends being for want of a better way of putting it,confiscated and then divied out as member support is not member support at all by any class of definition
Its subterfuge

Whats frightening or should be frightening for GII suppliers is,that without that subterfuge and noting its not behaving like a real co op so doesn't want to divvy out some margin, GII base price would be 4 to 6c behind most others and in truth already is because as I said the member support isn't member support at all

WheatenBriar wrote: »

With respect its not at all whats happening here,a farmers shares and dividends being for want of a better way of putting it,confiscated and then divied out as member support is not member support at all by any class of definition
Its subterfuge

Whats frightening or should be frightening for GII suppliers is,that without that subterfuge and noting its not behaving like a real co op so doesn't want to divvy out some margin, GII base price would be 4 to 6c behind most others and in truth already is because as I said the member support isn't member support at all

A farmers shares (his share of the co-ops assets) and his dividends are nothing more or less than the co-ops margin. It doesn't really matter where a "support fund" comes from because it has to be from either retained profits (assets) or current profits. Both of these already belong to the members.

Frankly if a co-op is retaining so much of the margin in a normal year, they shouldn't be, they should simply be paying a higher milk price and letting the farmer save his own money.

The real question is how much are better paying co-ops digging into balance sheets to pay inflated milk prices, if we knew that we'd know whether GIIL is incompetent, or just refreshingly transparent.

Co-ops with fat balance sheets are just takeover targets which is where the trouble starts in the first place.

kowtow wrote: »

The real question is how much are better paying co-ops digging into balance sheets to pay inflated milk prices, if we knew that we'd know whether GIIL is incompetent, or just refreshingly transparent.

I think its a reasonable assertion that the higher paying co op's could decide to pay what GII pay and the deduction in whats paid to their suppliers would be extra margin for them yes
They don't thankfully or are making more per litre than GII
The results when published tell that tale,it won't be a secret

I guess for me,the nubb of the matter here is sight has been lost of the true meaning of a co operative

WheatenBriar wrote: »

I think its a reasonable assertion that the higher paying co op's could decide to pay what GII pay and the deduction in whats paid to their suppliers would be extra margin for them yes
They don't thankfully or are making more per litre than GII
The results when published tell that tale,it won't be a secret

I guess for me,the nubb of the matter here is sight has been lost of the true meaning of a co operative

The results will tell, provided they are written clearly, but it'll be a bit late by then.

Or, more simply, we could demand that the co-ops disclose every quarter how much of any milk price they have paid in the last three months came from shareholders funds... That is the kind of thing which our politicians and supposed farmers leaders actually ought to be organising but they won't... so talk to your neighbours, call an EGM of each of the co-op and amend the constitution. It really is that simple, they are our co-ops.

If they knew that there was a danger of it they'd all publish voluntarily anyway.

You can't choose the co-op to milk for unless you know how much they are able to get for your milk, and the real problem here is that by geographical accident you can be forced to invest in, and work for, a processor whose risk profile and approach does not suit your own - simply because that is what your grandfather's co-operative decided to turn into somewhere along the way.

We should find a way to get back what should have been protected in the first place, force the co-ops to separate processing from distribution and oblige them to collect milk from local farmers, with the farmer choosing who gets the milk to process and buying shares / taking his profits or losses accordingly.

Then we'd have the most transparent milk market in the world, co-ops which work for farmers, producers would be able to spread their risk, and Ireland would be a fantastic environment in which to fund and grow value added farmer owned processing businesses.

We're supposed to be a forward thinking dynamic nation, that is forward thinking, so why not get on with it.

patsy_mccabe

You know oil prices going back up might be a blessing for Irish farmers. We are that less dependant on oil than our European friends.

freedominacup

kowtow wrote: »

While I'm in the mood here is German & Ireland milk vs oil for the same period with some very rough rebasing.

Oil was left in dollars so not completely sensible but enough to see the relationship.

I'd say you're a handy man with the oul function keys.

freedominacup wrote: »

I'd say you're a handy man with the oul function keys.

Bit rusty actually, keep shouting for an intern and only the dog turns up. Still.

Turns out that the EU isn't just for trashing countries & wrecking banks .. they also produce quite good graphs. This one is from the Milk Market Observatory (no doubt equipped with very expensive telescopes, capable of finding buyers for all the quota free milk)...

freedominacup

kowtow wrote: »

Bit rusty actually, keep shouting for an intern and only the dog turns up. Still.
]

The worst insult my wife can level against a useless coworker is that "they're as bad as you with a keyboard".

whelan2

jaymla627 wrote: »

In relation to glanbia making non - shared up suppliers buy shares in order to avail of top-ups, on milk and legality concerning it

Did anyone here go to the meeting?

frazzledhome

whelan2 wrote: »

Did anyone here go to the meeting?

The meeting for guys that feel they should benefit from an organisation that their not part of ?

The people at that meeting can get as mad as they like,they are at nothing
The 'member price support ' is a return on shares
Its relationship with milk delivered is made up by those who want to cod suppliers into thinking the gap between what other co op's pay for milk and what GII pay is smaller than what it is

There isn't even a legal problem with the fact dry shareholders didn't or don't receive it because it was voted on wasn't it?

On a slightly different topic I see Jack Kennedy outlining some slightly random thoughts on US margin protection programmes & futures markets following his world wind dairy tour in the US.

There is great danger in trying to cobble together these types of schemes in Ireland without really understanding them. The US margin protection programme is, afaik, a margin insurance policy with variable premia which is government sponsored, but which may well be hedged off in the markets by it's sponsors. It can operate this way because the US has already got - and they take decades to develop - highly liquid traded commodities markets.

The most important element of a margin protection scheme is that the insurance premium payable for protection needs to vary - quite rapidly - as conditions change. Farmers in the US will stop producing milk for the following season when the margin on that milk becomes "too expensive too insure"... that is the critical price signal which stops production and ensures the market remains in some kind of balance.

The insurance premium is actually no different to the premium on a combination of options - to sell (put) milk at price x and to buy (call) grains at price x minus the margin protected. Under the hood, that is what is going on, and it can't unfortunately happen without liquid traded commodity markets which we lack in Europe.

The first step to those markets is highly objective and transparent reporting. If every co-op in Ireland produced a calibrated subset of the Ornua PPI (or similar) and reported it every quarter that would not only be a very good start - we would lead the European field - but it would also end a good deal of the price support wrangling which is evidenced in the posts above.

Edit: come to think of it, Ireland has an additional problem in that form of margin protection because in a pasture such a large proportion of input cost relates to land, fertiliser, contractors labour etc. - none of these can be effectively hedged in any liquid market in the way that a straightforward feed vs. milk margin is protected in the US.

Sean o Sullivan on Newstalk now... Talking about MuuFri FRIGHTENING
Dairy farms have 10-15 yrs

kevthegaff

RightTurnClyde wrote: »

Sean o Sullivan on Newstalk now... Talking about MuuFri FRIGHTENING
Dairy farms have 10-15 yrs

Whqt did he say??

RightTurnClyde wrote: »

Sean o Sullivan on Newstalk now... Talking about MuuFri FRIGHTENING
Dairy farms have 10-15 yrs

Is that the milk made in the lab?

From what I heard the scientist behind it was definitely "grass fed".

kevthegaff wrote: »

Whqt did he say??

They're working on it in a Synthetic Biology Accelerator MuuFri in Cork
Producing milk is a relatively simple process .
BioPharma going to produced it in the same way insulin is produced.
Crops (grass) still needed for the fermentation process.
Dairy farmers still safe for 10-15 hrs but wouldn't invest heavily in dairy farming if he was a farmer.
(He was hinting at product being used not for the 2litre carton but more for industry where milk products/by-products are used. )

kowtow wrote: »

Is that the milk made in the lab?

From what I heard the scientist behind it was definitely "grass fed".

Is that scientist or science was grass fed.
What else did you oh hear about them.

RightTurnClyde wrote: »

Is that scientist or science was grass fed.
What else did you oh hear about them.

the scientist(s) !

... and vegan to boot so

They now have a chance of becoming the official milk of the UK labour party.

There's been press coverage for a year or more I think.

Somehow I can't imagine this as a realistic consumer product, but I suspect in the powder markets, low grade industrial etc. if the price was right there would be no reason not to use it.

I have no idea what their cost of production would be but - since milk powder is to a large extent a by product of liquid milk & fresh dairy product production they might find it tricky to generate a return on investment when powder would always be there to undercut them.

On the other hand there is a young lady in my house who prefers her milk freshly squeezed from almonds... she's half cracked and we make her sleep outside... but if there are others like her, who knows?

The sobering thought is that if our own industry's assumptions about the Chinese market (growing demand, largely powder, impossible to satisfy locally) were correct... and if this stood a chance of working... surely the Chinese would be already buying it or developing it lock stock and barrel?

kowtow wrote: »

The sobering thought is that if our own industry's assumptions about the Chinese market (growing demand, largely powder, impossible to satisfy locally) were correct... and if this stood a chance of working... surely the Chinese would be already buying it or developing it lock stock and barrel?

The Chinese would just do what they normally do...wait till the product is developed and then just turn on the photocopier.

The one thing that muu fri milk most certainly will not do is produce a decent cheese, so in theory our dairy industry is safe to some degree.

But then again, we'll probably have banned decent cheese altogether in the next 15 years.... in order to safeguard the purity of our dairy industry.

Wouldn't that be a terrible irony.

fepper

RightTurnClyde wrote: »

They're working on it in a Synthetic Biology Accelerator MuuFri in Cork
Producing milk is a relatively simple process .
BioPharma going to produced it in the same way insulin is produced.
Crops (grass) still needed for the fermentation process.
Dairy farmers still safe for 10-15 hrs but wouldn't invest heavily in dairy farming if he was a farmer.
(He was hinting at product being used not for the 2litre carton but more for industry where milk products/by-products are used. )

10-15 hrs!! That'd be some turnaround