Milk Price- Please read Mod note in post #1

mahoney_j · 22-10-2015 08:41PM

frazzledhome wrote: »

If 20% of your milk, is that correct?

Peak supply

Dawggone · 22-10-2015 08:42PM

frazzledhome wrote: »

Where do lads think the money's going to come from with Fonterra holding product to dump later.

Spot on Frazz.

Kowtow, myself and a few more have been questioning the business model of Irish dairy for quite a while now...

To me, and I'm the first to admit that I know squat about dairy, the model that has been

Edit.
Another load of bullshyte lost...
Anything I post from now will be short

RightTurnClyde · 22-10-2015 08:42PM

frazzledhome wrote: »

Agree, tone has changed totally now that the reality you spoke of has dawned. As I've said there'll be blood on the floor come spring time. The price being paid at the moment isn't sustainable and is needed next spring.

Where do lads think the money's going to come from with Fonterra holding product to dump later.

Irish Co ops are under water holding their breath in the hope that the cows will be fried off soon to stop them bleeding. The monies subbing milk price is draining them

Is it the case with all the coops. Genuine question.
Are the coops with a higher value product mix under that (as much) much pressure.

At a meeting on Tue and Conor Ryan told us that basically with the powders you're looking at 21c value. Butter you can add 6 to that (atm). There's the west cork coops knocking out plenty of cheese and as a result have 2-3 cent lead on others.
I'm wondering are the coops with a wider range of products under the same pressure as the ones gone down the powder for China route

frazzledhome · 22-10-2015 08:43PM

mahoney_j wrote: »

Peak supply

So it's cheap winter milk in other words "winter milk for slow learners"

I don't have to ask but I presume your not biting that one

RightTurnClyde · 22-10-2015 08:48PM

Dawggone wrote: »

Sorry to butt in...but where does that put Harvest 2020?
Belview and co selling into commodity markets?
Whats the business plan?

I'm on record here as being totally against lumping premium product onto world commodity markets like NZ's Fonterra. Poor (and lazy) model IMO.

I asked Pat Dillon that on Tuesday and got a rubbish answer.

frazzledhome · 22-10-2015 08:49PM

RightTurnClyde wrote: »

Is it the case with all the coops. Genuine question.
Are the coops with a higher value product mix under that (as much) much pressure.

At a meeting on Tue and Conor Ryan told us that basically with the powders you're looking at 21c value. Butter you can add 6 to that (atm). There's the west cork coops knocking out plenty of cheese and as a result have 2-3 cent lead on others.
I'm wondering are the coops with a wider range of products under the same pressure as the ones gone down the powder for China route

Of course the west corks are the exception but the cheese lag hits later. The more expansion they have at farm level the more exposed they become.

Ryan is correct but the basket has lots of products. Dead right on the powder one. WPI for instance is trading at about €10k a tonne but is only a small part of the litre right down to the animal feed fats.

mahoney_j · 22-10-2015 08:56PM

frazzledhome wrote: »

So it's cheap winter milk in other words "winter milk for slow learners"

I don't have to ask but I presume your not biting that one

Nope was going to milk till December 20 anyway (culls and March/April calvers ).ill achieve bonus that month ,supply no milk Jan and will achieve it for Feb also.part of plan is to get a more streamlined supply pulling some from peak other is there's a market for the milk..we have quite a bit of spare capacity as it is at peak and have taken in milk from others to process this year and last .some guys going milking the whole way through with little thought ..2 cent bonus is also on top of anyone with a liquid winter bonus

mahoney_j · 22-10-2015 09:01PM

frazzledhome wrote: »

Of course the west corks are the exception but the cheese lag hits later. The more expansion they have at farm level the more exposed they become.

Ryan is correct but the basket has lots of products. Dead right on the powder one. WPI for instance is trading at about €10k a tonne but is only a small part of the litre right down to the animal feed fats.

I've been critical of c Ryan previously but think he's weathered storm of last year(supplier strife and ****e price quite well )we had great price last back end due to a lot of product going into casein and this year efficiencies from plant been expanded to cater for more varied product mix

frazzledhome · 22-10-2015 09:05PM

mahoney_j wrote: »

Nope was going to milk till December 20 anyway (culls and March/April calvers ).ill achieve bonus that month ,supply no milk Jan and will achieve it for Feb also.part of plan is to get a more streamlined supply pulling some from peak other is there's a market for the milk..we have quite a bit of spare capacity as it is at peak and have taken in milk from others to process this year and last .some guys going milking the whole way through with little thought ..2 cent bonus is also on top of anyone with a liquid winter bonus

Ah very good ye don't have to supply right through. The whole focus is going to be flattening the curve to max efficiency of plant, need to be careful as it may not be best for the tit puller.

Isn't it ironic that schemes that certain schemes from another processor are being introduced.

Be careful what ye wish for

Dawggone · 22-10-2015 09:05PM

frazzledhome wrote: »

Of course the west corks are the exception but the cheese lag hits later. The more expansion they have at farm level the more exposed they become.

Could you explain that please Frazz?

frazzledhome · 22-10-2015 09:10PM

Dawggone wrote: »

Could you explain that please Frazz?

The West Cork coops are an example of how a co op should work. Fantastic product mix of hi value hi quality. Very strong balance sheet to help farmers as it should be.

I feel the more milk they process the more will have to go into commodities. I could be as wrong as hell as these guys know how to run a co op

Dawggone · 22-10-2015 09:14PM

frazzledhome wrote: »

The West Cork coops are an example of how a co op should work. Fantastic product mix of hi value hi quality. Very strong balance sheet to help farmers as it should be.

I feel the more milk they process the more will have to go into commodities. I could be as wrong as hell as these guys know how to run a co op

Gentlemen. I rest my case.

mahoney_j · 22-10-2015 09:24PM

RightTurnClyde wrote: »

Is it the case with all the coops. Genuine question.
Are the coops with a higher value product mix under that (as much) much pressure.

At a meeting on Tue and Conor Ryan told us that basically with the powders you're looking at 21c value. Butter you can add 6 to that (atm). There's the west cork coops knocking out plenty of cheese and as a result have 2-3 cent lead on others.
I'm wondering are the coops with a wider range of products under the same pressure as the ones gone down the powder for China route

Simple answer is no ,but there all under pressure .just look at bellview ,closed after costing millions cause it's producing what New Zealand is for Chinese market and that has gone tits up .when the upswing comes and China kicks on again(hooefully )Glanbia will probably lead the price increase ,albeit from a lower base.

What I wonder now ,New Zealand on back of 2 below cop seasons will they learn from it or just ride along again to the next slump,mass producing powder for Chinese market ???.ditto bellview .a lot of other coops seem to be looking at alternative markets and products that aren't as exposed to wildly fluctuating skim and wmp prices.......

frazzledhome · 22-10-2015 09:59PM

mahoney_j wrote: »

Simple answer is no ,but there all under pressure .just look at bellview ,closed after costing millions cause it's producing what New Zealand is for Chinese market and that has gone tits up .when the upswing comes and China kicks on again(hooefully )Glanbia will probably lead the price increase ,albeit from a lower base.

What I wonder now ,New Zealand on back of 2 below cop seasons will they learn from it or just ride along again to the next slump,mass producing powder for Chinese market ???.ditto bellview .a lot of other coops seem to be looking at alternative markets and products that aren't as exposed to wildly fluctuating skim and wmp prices.......

Mj, when did it close?
How much did GII lose?
You seem to have a lot of info or are you perhaps on a recruiting drive?

mahoney_j · 22-10-2015 10:27PM

frazzledhome wrote: »

Mj, when did it close?
How much did GII lose?
You seem to have a lot of info or are you perhaps on a recruiting drive?

Ears on the ground ,how much Gill list/are loosing fook knows .bellviews problems are well known ,u telling me it's still processing milk,reports in agriland and journal are wrong ???u interested in moving supply down the m7!!!!

darragh_haven · 22-10-2015 10:37PM

mahoney_j wrote: »

Ears on the ground ,how much Gill list/are loosing fook knows .bellviews problems are well known ,u telling me it's still processing milk,reports in agriland and journal are wrong ???u interested in moving supply down the m7!!!!

He could move it up the M7, M50, M1 and onto the Red Hand. Was talking to the boss man there on Tuesday on his site. Some amount of expansion happening and looking for milk!

wats the craic · 22-10-2015 11:04PM

mahoney_j wrote: »

Ears on the ground ,how much Gill list/are loosing fook knows .bellviews problems are well known ,u telling me it's still processing milk,reports in agriland and journal are wrong ???u interested in moving supply down the m7!!!!

belview has been closed for the last couple months

frazzledhome · 22-10-2015 11:09PM

wats the craic wrote: »

belview has been closed for the last couple months

Milk processed there last week, fact. Closing this week as all milk going to Ballyragget and Virginia.

darragh_haven · 22-10-2015 11:32PM

I don't understand why people make a big song and dance about bellviews shutting/shut down. Glanbia have to have capacity to process at peak. Therefore will shut down when there isn't a requirement/volume . It's all part of seasonal supply. Itll It'll happen every year.
Would a farmer continue to turn on the milking parlour twice a day if the cows were dried off?

frazzledhome · 22-10-2015 11:34PM

darragh_haven wrote: »

I don't understand why people make a big song and dance about bellviews shutting/shut down. Glanbia have to have capacity to process at peak. Therefore will shut down when there isn't a requirement/volume . It's all part of seasonal supply. Itll It'll happen every year.
Would a farmer continue to turn on the milking parlour twice a day if the cows were dried off?

+1 Same for all processors but imagine if I had said that

kowtow · 22-10-2015 11:44PM

frazzledhome wrote:

Dawg must be one of the farmers Kowtow's constantly referring to, working for free

I always assumed he was working for love...

frazzledhome · 22-10-2015 11:44PM

http://www.farmersjournal.ie/us-milk-prices-uncertain-192346/

So do ye still think first half of next year will be ok? Whistling past the graveyard

Positive, it's not till the yanks feel the heat that markets can improve

kowtow · 22-10-2015 11:48PM

frazzledhome wrote:

Would they handle another 150m litres?

Steady the buffs.

I think Frazz might have bought one of those diet feeders...

frazzledhome · 22-10-2015 11:52PM

kowtow wrote: »

Steady the buffs.

I think Frazz might have bought one of those diet feeders...

Solves all priblems

whelan2 · 23-10-2015 12:08AM

wats the craic wrote: »

belview has been closed for the last couple months

From the horses mouth tonight, belview is closing this week.They didnt want to discuss anything belview at all. Dont expect a price increase for a while, alot of very annoyed farmers there tonight and rightly so

kowtow · 23-10-2015 12:29AM

Been busy but..

1. Carbery didn't say how long they'd been subbing price, and others said nothing at all. As I've said before, at least giil has been transparent.

2. Giil / coop side in a uniquely disadvantaged position since overpaying even a cent for milk would automatically lower the price of the buyout. I suspect the boards hands are tied.

3. The real ripping off was almost certainly done when supply agreements between giil + plc etc. were drafted.. something I don't remember hearing discussed at all. Everyone was too busy wondering how many shiny shares there would be and how many farmers would be on the boards. I'd cheerfully give away 90% of the seats on a board if I get to draft the articles which limit it's actions.

4. All that said, I think one of the points that Frazz is making bears repeating.. that is that the more milk we all produce the greater the percentage that ends up as powder, all else being equal. Clearly when that happens the Irish average moves closer to the gdt... some coops will be affected more slowly, but unless we can add value faster than we can milk cows (which I doubt) then Glanbia won't be alone.

The deals that put GII together were harsh for farmers, and the milk supply agreements are obnoxious, but it may well be that when Glanbia promise a market leading price they are telling no more than the truth.

It's just that they are leading the way down, instead of up.

wats the craic · 23-10-2015 12:58AM

whelan2 wrote: »

From the horses mouth tonight, belview is closing this week.They didnt want to discuss anything belview at all. Dont expect a price increase for a while, alot of very annoyed farmers there tonight and rightly so

many turn up . are you tied into a msa with them

whelan2 · 23-10-2015 05:54AM

wats the craic wrote: »

many turn up . are you tied into a msa with them

yes tied in for the 5 years:mad::mad:, I asked the question about it at the very end, you can give 2 years notice to leave at the end of year 3. so basically the 5 years. A few lads I was talking to after are looking in to the legal end of things.

There was a good turn out considering the late notice, alot of very annoyed farmers. Think a few points came across and tbh Jim Bergin came across as very arrogant. The first thing he said was I will give you the reasons why I called for a 1cpl drop. So the board had nothing to do with the drop iykwim it was a 1 man decision. The main reason was 2015 profits have to be kept in line with 2014. 1 farmer made the point that we want to keep our profits in line with 2014 also.
He dazzled us with graph after graph. Alot of lads have borrowed to get shared up . Asked any idea on milk price for the next 3 months there was no commitment . Kept saying q1 2016 will be difficult, point was made we have to get through the end of 2015 before that. When other matters were raised the top table would say we are here to discuss milk price-wouldnt even discuss liquid milk which is milk price- The point someone brought up was they should have topped the september milk up by 2cpl from co-op funds and no drop. I also asked was there much money left in the kitty, cant remember the exact amount but there is still a good bit there. Drop in milk price has nothing to do with Bellview its all down to the markets. Point was made should they not be looking at other markets like they told us 4/5 years ago. They also said that 126 m litres over plan had been sent in this year and they had to find a home for this. I said we were told ye supply as much milk as ye can there are loads of markets out there....... if they had any proper contact with the farmers on the ground they would have had an idea of who was planning on producing what. Any way batten the hatches for the next 6 months

rangler1 · 23-10-2015 07:55AM

whelan2 wrote: »

yes tied in for the 5 years:mad::mad:, I asked the question about it at the very end, you can give 2 years notice to leave at the end of year 3. so basically the 5 years. A few lads I was talking to after are looking in to the legal end of things.

There was a good turn out considering the late notice, alot of very annoyed farmers. Think a few points came across and tbh Jim Bergin came across as very arrogant. The first thing he said was I will give you the reasons why I called for a 1cpl drop. So the board had nothing to do with the drop iykwim it was a 1 man decision. The main reason was 2015 profits have to be kept in line with 2014. 1 farmer made the point that we want to keep our profits in line with 2014 also.
He dazzled us with graph after graph. Alot of lads have borrowed to get shared up . Asked any idea on milk price for the next 3 months there was no commitment . Kept saying q1 2016 will be difficult, point was made we have to get through the end of 2015 before that. When other matters were raised the top table would say we are here to discuss milk price-wouldnt even discuss liquid milk which is milk price- The point someone brought up was they should have topped the september milk up by 2cpl from co-op funds and no drop. I also asked was there much money left in the kitty, cant remember the exact amount but there is still a good bit there. Drop in milk price has nothing to do with Bellview its all down to the markets. Point was made should they not be looking at other markets like they told us 4/5 years ago. They also said that 126 m litres over plan had been sent in this year and they had to find a home for this. I said we were told ye supply as much milk as ye can there are loads of markets out there....... if they had any proper contact with the farmers on the ground they would have had an idea of who was planning on producing what. Any way batten the hatches for the next 6 months

Can't be easy for them, the only way into 'other markets' is undercut the suppliers already there......maybe another irish processor....and then you would have a race to the bottom.
There must be some code of ethics between milk processors here as glanbia don't seem to be bullying in on the smaller processors, I think someone said that milk for cheese or something was a better price

kowtow · 23-10-2015 08:16AM

whelan2 wrote: »

The main reason was 2015 profits have to be kept in line with 2014.

Because the purchase option strike price, what farmers will have to pay for the remaining 40%, is a function of profits over these years - see my post above.

Not only is less paid now for milk, but when the buyout comes you get to buy each cent of extra profit back several times over.

They certainly knew what they were doing when they put the MSA in place.

Milk Price- Please read Mod note in post #1

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