Milk Price- Please read Mod note in post #1

frazzledhome · 22-01-2016 10:00PM

kowtow wrote: »

Ah yes, but it's quite possible to make good trade with a bad broker.

My point wasn't about the wisdom of having fixed a price - that's a judgement call which your guy can rightfully be pleased with - rather my concern was the basis upon which fixed price opportunities are shared out amongst theoretically equal members of the same cooperative.

I.e. Are the rest of us taking a lower price to provide the funds for the fixed?

Your point is valid, however it's backed with contracts on the other side

Milked out · 22-01-2016 10:48PM

frazzledhome wrote: »

At our DG profit monitor meeting and the guy with 75% of his milk fixed wiped out asses on price.

He and the rest of us certainly thought it was a great scheme. Not all DG members are GII suppliers either

In dairygold the max % is 15 of 2015 supply so it's too small an amount to make a massive difference imo. Having the option to fix 75% is a different kettle of fish

frazzledhome · 22-01-2016 10:58PM

Milked out wrote: »

In dairygold the max % is 15 of 2015 supply so it's too small an amount to make a massive difference imo. Having the option to fix 75% is a different kettle of fish

Not many would have 75%, they'd needed to have taken their allowance in every scheme to date

Timmaay · 22-01-2016 11:28PM

frazzledhome wrote: »

At our DG profit monitor meeting and the guy with 75% of his milk fixed wiped out asses on price.

He and the rest of us certainly thought it was a great scheme. Not all DG members are GII suppliers either

Hard question to answer here given how farms evolve I know, but how does their price compare in other years? Were they behind much in previous years when the milk price was ahead of the fixed price?

mahoney_j · 22-01-2016 11:29PM

frazzledhome wrote: »

Not many would have 75%, they'd needed to have taken their allowance in every scheme to date

The wise cute whores !!!!!

Milked out · 22-01-2016 11:41PM

frazzledhome wrote: »

Not many would have 75%, they'd needed to have taken their allowance in every scheme to date

Do you think that as you need to partake in every scheme to be able to have the option to put in a larger amount in the next scheme that it's an effort to encourage people in and do you think that approach is necessary to maintain contracts on the other side of these schemes? Ideally it would be nice to have an opt in or out of any scheme regardless of historical participation but I guess you have to be realistic as well unless there is a proper futures type market here for it its easier said than done

alps · 22-01-2016 11:46PM

atlantic mist wrote: »

by buying the inputs i.e meal fertiliser we are helping the income statement of the plc, as the plc owns agri business its reported in the income statement, its not a joint venture like gii which only gets reported in the balance sheet, worth remembering the margin on agri business vrs milk so were paying the higher margin for goods but its ok cause its shared between everyone including external plc st

Mist.....are you sure about this? You're saying that the agri business is owned by the plc!!! And we discussed here a few weeks back about glanbia stating that future fixed price schemes would be linked to feed purchase!!!!
You're saying that the coop will make its members fix their input choices and prices to a plc.....

I'm beginning to disbelieve in the whole industry...We had Boherbue farmers vote to allow farmers to be removed as shareholders if they do not purchase enough inputs through the coop, ....What's going to be next...

Apologies if I've been reading these situations incorrectly, as not involved in either "coop"

atlantic mist · 23-01-2016 01:05AM

well 51% is the magic number for control in business,
coop owns 60% of gii, coop owns 36% of plc
agribusiness under plc control were shareholders

dont think we need the contracts with orna nua and consumer foods they always went in the pot and averaged out with everyone, need it to be balanced with other products in the mix which we have difficulty selling the ones going into intervention if possible to balance the hedge

Farmer Ed · 23-01-2016 02:12AM

alps wrote: »

Mist.....are you sure about this? You're saying that the agri business is owned by the plc!!! And we discussed here a few weeks back about glanbia stating that future fixed price schemes would be linked to feed purchase!!!!
You're saying that the coop will make its members fix their input choices and prices to a plc.....

I'm beginning to disbelieve in the whole industry...We had Boherbue farmers vote to allow farmers to be removed as shareholders if they do not purchase enough inputs through the coop, ....What's going to be next...

Apologies if I've been reading these situations incorrectly, as not involved in either "coop"

To be fair from talking to someone I know supplying Boherbue, they have been way ahead on milk price. I think that might have helped soften people up a bit. But you are totally correct. And who was at the heart of this bright idea? I'm told the ICOS of course. Yes the same people who would not allow farmers who moved to Botherbue to become shareholders, because they still had shares in Dairygold.

Where do these guys get off? They are simply pushing an agenda for the management of the big Co Ops. You can bet it's only a matter of time before the Botherbue rules will be used as a template for other Co Ops.

It's disgraceful the amount of Co Op managers that are driving around in new E class mercedes at a time when they are telling farmers that they could be looking at a milk price of 22c. Does anyone even know how much these geniuses are being paid? Kind of topical I would think given the type of revelations that have been rocking the agri sector.

jaymla627 · 23-01-2016 03:00AM

Farmer Ed wrote: »

To be fair from talking to someone I know supplying Boherbue, they have been way ahead on milk price. I think that might have helped soften people up a bit. But you are totally correct. And who was at the heart of this bright idea? I'm told the ICOS of course. Yes the same people who would not allow farmers who moved to Botherbue to become shareholders, because they still had shares in Dairygold.

Where do these guys get off? They are simply pushing an agenda for the management of the big Co Ops. You can bet it's only a matter of time before the Botherbue rules will be used as a template for other Co Ops.

It's disgraceful the amount of Co Op managers that are driving around in new E class mercedes at a time when they are telling farmers that they could be looking at a milk price of 22c. Does anyone even know how much these geniuses are being paid? Kind of topical I would think given the type of revelations that have been rocking the agri sector.

Have it from a good source that the next glanbia fixed price schemes will have a fert/feed clause in them, it's basically looking like these schemes will be printing presses for the agricultural sales sides of the businesses....
Glanbia especially is positioning itself in a position that will give it immense power over suppliers that lock in feed and fert.
They might seem to be giving you some stability with milk price etc, but their simply giving it to you in one hand and taking it out of the other when your forced to buy overpriced feed/fert with strict terms and conditions that will end up costing you a few cent extra per litre as opposed to dealing with independent suppliers

Farmer Ed · 23-01-2016 06:38AM

And what will the competition atorithy have to say about all this? Apart from giving it their blessing. Nothing!
If farmers had any leadership we should be directing our anger at the ICOS and the competition atorithy. Between them they have been really taking us for fools.

Farmer Ed · 23-01-2016 06:38AM

Double post

rangler1 · 23-01-2016 09:27AM

Farmer Ed wrote: »

And what will the competition atorithy have to say about all this? Apart from giving it their blessing. Nothing!
If farmers had any leadership we should be directing our anger at the ICOS and the competition atorithy. Between them they have been really taking us for fools.

Is it really an issue for Competition Authority if there's not risk of putting up the price to the consumer, Their main agenda is to protect the consumer....that's the reason that they were involved with Ryanair/Aer lingus to ensure that Ryanair don't get the opprtunity to fleece those very important consumers.
It's obvious at this stage they have no interest in protecting farmers/ small businesses supplying big businesses/ supermarkets etc.
Again I see you're demanding to know managers salaries, Salaries of a few isn't going to make any difference to the profit of these companies whereas their performance will make many multiples of their salary if they;re the right person.....and if they're not you know what to do, but this quest to know the salary is going to make sure that the good operators will avoid farmer coops like the plague.

kowtow · 23-01-2016 10:45AM

Yes I'd thought that from a previous discussion.

FWIW I think everyone is probably doing their best here - but we are easily sold to, and I think caution is warranted. I wouldn't like to see a few half baked fixed price deals combined with input purchase passed off as the grand solution to volatile markets.

Reminds me too much of third world textile factories switching to piecework, only difference for the workers was they took more risk.... but they did get badges to signify that they were "self employed business people"

Edit : and why is participation in a fixed price scheme tied to previous participation? That's not a hedge at all. I I don't expect a bookie to refuse my money on the basis that I haven't bet on the horse every year.

alps · 23-01-2016 11:04AM

Farmer Ed wrote: »

And who was at the heart of this bright idea? I'm told the ICOS of course. Yes the same people who would not allow farmers who moved to Botherbue to become shareholders, because they still had shares in Dairygold.

.

I think we need to stop blaming the Wolf....The wolf will do what the wolf has always done...

When do we think the chicken has to carry some of the blame. .. You can't blame the wolf if the chickencontinues to sleep on the ground with the door wide open....

atlantic mist · 23-01-2016 11:13AM

its gii director of strategy who came up with the scheme, its actually someone job to come up with these methods of creative accounting with suppliers split into liquid, balies, manufacturing and now split further into ornaua and consumer foods contracts, they ll be drawing diagrams of our splintered supply base manage us by groups

sure were getting badges for sustainability, buzz word of 2015, must get it embroidered onto the wellies can get fair trade for the other wellie next year

just getting fed up of the line since our new company was set up, its ok to pay you poor milk, and grain prices sure isnt your coop getting a dividend from the profit you should be grateful

kowtow · 23-01-2016 11:57AM

freedominacup wrote: »

Can you explain exactly what you mean by insert themselves further into the co-ops p&l?

Sure..

When the co-op owns the customer relationship, selects & controls the product to be manufactured, it is a processor. All very well as long as the farmer has a free choice of processors to supply, to keep them honest by making them compete for milk.

If the co-op also owns the farmer relationship, by means of a milk supply agreement (so he can't leave) and in due course by mandating that the farmer buys inputs from them - then the farmer moves from being a supplier to being an outsourced worker in a chain.

The farmer is subcontracted by the co-op to provide the labour and the land for the co-ops grass to grow on and the cows to eat it (the grass seed & the fert and any other concentrates will be the co-ops) and being paid on a piecework basis for the milk he sends back.

Now it may well be that the farmer is a shareholder in the co-op, just as those on the factory floor at Amazon are employee share scheme participants, but the balance of value and control has changed utterly from what the co-operative movement fundamentally exists to do - which the minimum necessary, at low cost shared between farmers, to take peoples milk to those who will pay most for it at any given time.

If that's what people want then let them choose it.

But by concern is that rather than being an free market, voluntary, option to help those farmers who wish to take them, fixed price contracts are being used to further change this balance of control in favour of the processor / piecework model without people really seeing what is happening.

kevthegaff · 23-01-2016 02:39PM

What's yer predictions with price for the year?.Looks like a very very slow recovery

Milked out · 23-01-2016 03:22PM

kevthegaff wrote: »

What's yer predictions with price for the year?.Looks like a very very slow recovery

I'd say 25/26 base average to the end of the year. Oil price, Chinese stock market etc all conspiring against us I reckon. If the rain would ever feckin stop it might give us half a chance.

Farmer Ed · 23-01-2016 05:46PM

kowtow wrote: »

Sure..

When the co-op owns the customer relationship, selects & controls the product to be manufactured, it is a processor. All very well as long as the farmer has a free choice of processors to supply, to keep them honest by making them compete for milk.

If the co-op also owns the farmer relationship, by means of a milk supply agreement (so he can't leave) and in due course by mandating that the farmer buys inputs from them - then the farmer moves from being a supplier to being an outsourced worker in a chain.

The farmer is subcontracted by the co-op to provide the labour and the land for the co-ops grass to grow on and the cows to eat it (the grass seed & the fert and any other concentrates will be the co-ops) and being paid on a piecework basis for the milk he sends back.

Now it may well be that the farmer is a shareholder in the co-op, just as those on the factory floor at Amazon are employee share scheme participants, but the balance of value and control has changed utterly from what the co-operative movement fundamentally exists to do - which the minimum necessary, at low cost shared between farmers, to take peoples milk to those who will pay most for it at any given time.

If that's what people want then let them choose it.

But by concern is that rather than being an free market, voluntary, option to help those farmers who wish to take them, fixed price contracts are being used to further change this balance of control in favour of the processor / piecework model without people really seeing what is happening.

You are absolutely correct in everything you say. To be fair I don't think the problem is as evident in the smaller Co Ops, but as in the example given here earlier of Botherbue, the smaller Co Ops are continuously coming under pressure from ICOS to implement the latest and best "great idea". We all saw what happened when the two big Co Ops started to lose suppliers this year. Like a bat out of hell, the ICOS were to the rescue to implement a new code of conduct preventing any supplier from moving without three months notice. They did not seem to have any problem with suppliers moving from small to big Co Ops, but when it backfired the big Co Ops had to get their protection.

Also I disagree with Ranglers view that the competition authority has no role in investigating MSAs. I am not 100% sure about the Gill MSA but I am in possession of a letter from the competition authority stating that, having investigated the dg MSA, on the advice of Ger Fitzgerald,they did not find it to be anti competitive. Not that surprising as the contract was drawn up by McCann Fitzgerald a firm of solicitors that Ger was a former partner in. My understanding is that the function of the competition authority should be to protect the rights of all citizens. Why would they even bother to be seen to investigate an MSA if this is not part of their remit?

As a sheep farmer how would Rangler feel if he was forced to sign a contract that forced him to sell all his lambs to one supplier for a minimum of seven years with no mention of price?

On the point that should we dare to be as cheeky as to question pay levels of Co Op executives? Personally I think some of the better Co Op executives we have in this country are infact running some of the smaller Co Ops and quite likely are not getting paid excessively. The idea that if pay levels were more transparent there would be a mass exodus of talent does not really have any evidence to back it up. For example as we head into a general election. We can all find out what the Taoiseach gets paid and it certainly doesn't stop people applying for that job. At the end of the day a lot of Co Op executives are dairy science graduates. No disrespect but understanding to chemical composition of milk is a totally different skill set to managing a multi million euro business. A lot of these people are not as special as they would have us believe. Alps is correct as farmers we need to stop acting like chickens IMO we need to get over the tipping our hat to the creamery manager stage.

If not then I'm afraid every problem you have correctly highlighted here will only continue to get worse.

rangler1 · 23-01-2016 06:35PM

Farmer Ed wrote: »

You are absolutely correct in everything you say. To be fair I don't think the problem is as evident in the smaller Co Ops, but as in the example given here earlier of Botherbue, the smaller Co Ops are continuously coming under pressure from ICOS to implement the latest and best "great idea". We all saw what happened when the two big Co Ops started to lose suppliers this year. Like a bat out of hell, the ICOS were to the rescue to implement a new code of conduct preventing any supplier from moving without three months notice. They did not seem to have any problem with suppliers moving from small to big Co Ops, but when it backfired the big Co Ops had to get their protection.

Also I disagree with Ranglers view that the competition authority has no role in investigating MSAs. I am not 100% sure about the Gill MSA but I am in possession of a letter from the competition authority stating that, having investigated the dg MSA, on the advice of Ger Fitzgerald,they did not find it to be anti competitive. Not that surprising as the contract was drawn up by McCann Fitzgerald a firm of solicitors that Ger was a former partner in. My understanding is that the function of the competition authority should be to protect the rights of all citizens. Why would they even bother to be seen to investigate an MSA if this is not part of their remit?

As a sheep farmer how would Rangler feel if he was forced to sign a contract that forced him to sell all his lambs to one supplier for a minimum of seven years with no mention of price?

On the point that should we dare to be as cheeky as to question pay levels of Co Op executives? Personally I think some of the better Co Op executives we have in this country are infact running some of the smaller Co Ops and quite likely are not getting paid excessively. The idea that if pay levels were more transparent there would be a mass exodus of talent does not really have any evidence to back it up. For example as we head into a general election. We can all find out what the Taoiseach gets paid and it certainly doesn't stop people applying for that job. At the end of the day a lot of Co Op executives are dairy science graduates. No disrespect but understanding to chemical composition of milk is a totally different skill set to managing a multi million euro business. A lot of these people are not as special as they would have us believe. Alps is correct as farmers we need to stop acting like chickens IMO we need to get over the tipping our hat to the creamery manager stage.

If not then I'm afraid every problem you have correctly highlighted here will only continue to get worse.

The CA might investigate if there was a risk of putting up the price to the consumer, otherwise I;d be surprised of they had any interest in looking after farmers.
Don't know if you were aware how our grain protest finished up .
and the pointlessness of any protesting until there's something sorted with THE CA
http://www.ccpc.ie/enforcement-mergers-criminal-enforcement-cartels/grain-blockade-convictions

Farmer Ed · 23-01-2016 06:57PM

rangler1 wrote: »

The CA might investigate if there was a risk of putting up the price to the consumer, otherwise I;d be surprised of they had any interest in looking after farmers.
Don't know if you were aware how our grain protest finished up .
and the pointlessness of any protesting until there's something sorted with THE CA
http://www.ccpc.ie/enforcement-mergers-criminal-enforcement-cartels/grain-blockade-convictions

I totally agree with you. So as farmers should we not be focusing our attention on the CA? I honestly think it has let farmers down badly. We are citizens of the state also and should have the same rights as everyone else.

Apart from one Co Op who were in difficulty and had to sell the family silverware, has any farming body with the resources to do so, ever appealed any decision taken by the CA?

rangler1 · 23-01-2016 07:16PM

Farmer Ed wrote: »

I totally agree with you. So as farmers should we not be focusing our attention on the CA? I honestly think it has let farmers down badly. We are citizens of the state also and should have the same rights as everyone else.

Apart from one Co Op who were in difficulty and had to sell the family silverware, has any farming body with the resources to do so, ever appealed any decision taken by the CA?

,

Don't know, I'm sure it was defended in the courts in that grain case and the beef protest fines as well.

Farmer Ed · 23-01-2016 07:35PM

rangler1 wrote: »

,

Don't know, I'm sure it was defended in the courts in that grain case and the beef protest fines as well.

I wonder how French farmers for example would react to such decisions?

atlantic mist · 23-01-2016 09:09PM

im going for 27.50c base for year, might be a little optimistic but the freeze in us might reduce supply, new Zealand found homes for all product so no stock pile over there plus estimated 5% reduced supply expected from culling, small mountain of powder in eu, belview coming on stream, diesel being cheap so can ship/transport product cheaper, exports competitive with exchange rate even though we take hit on price, bulk product in fixed price schemes across the country gives the "sales teams" extra time spent to be finding new homes for extra product

they can be so cute with the schemes anyone find a way to get product into russia???

jaymla627 · 23-01-2016 11:19PM

atlantic mist wrote: »

im going for 27.50c base for year, might be a little optimistic but the freeze in us might reduce supply, new Zealand found homes for all product so no stock pile over there plus estimated 5% reduced supply expected from culling, small mountain of powder in eu, belview coming on stream, diesel being cheap so can ship/transport product cheaper, exports competitive with exchange rate even though we take hit on price, bulk product in fixed price schemes across the country gives the "sales teams" extra time spent to be finding new homes for extra product

they can be so cute with the schemes anyone find a way to get product into russia???

Wouldn't be betting on Russia coming in like they done pre exports ban, oil tanking like it has is seriously going to curtail they're buying power, seen a article where Algeria cut their spend on dairy imports by over a billion euros in 2015 compared to 2014, cheap oil is a serious worry when linked in with dairy, entering a phase that no one can really call, but the best case scenario would be milk holding at a base above 25 cent for 2016....
I reckon sub 20 cent is on the cards the way things are looking, once intervention warehouses filll up and it's closed off as a outlet

keep going · 24-01-2016 12:22AM

jaymla627 wrote: »

Wouldn't be betting on Russia coming in like they done pre exports ban, oil tanking like it has is seriously going to curtail they're buying power, seen a article where Algeria cut their spend on dairy imports by over a billion euros in 2015 compared to 2014, cheap oil is a serious worry when linked in with dairy, entering a phase that no one can really call, but the best case scenario would be milk holding at a base above 25 cent for 2016....
I reckon sub 20 cent is on the cards the way things are looking, once intervention warehouses filll up and it's closed off as a outlet

its veryhard to a pin on the exact number but you re on the ball with info so i see a full 12 months of s**t price with a rise in 2017.signed up for fixed price scheme yesterday of 28.5base for 18 months and reckon the worse ill do is break even.if it goes near 20 for long beef prices will crash as well

jaymla627 · 24-01-2016 01:06AM

keep going wrote: »

its veryhard to a pin on the exact number but you re on the ball with info so i see a full 12 months of s**t price with a rise in 2017.signed up for fixed price scheme yesterday of 28.5base for 18 months and reckon the worse ill do is break even.if it goes near 20 for long beef prices will crash as well

It's going to be a clusterf**k by the looks of it, all indications are unless a severe weather event occurs in America/Europe/new Zealand that suddenly cuts 4-5 % of the excess of world supply of what's already floating the game is up, all the spiel about weathering volatility and using grass won't count for f**k all with what's coming down the tracks , basically their too many cows worldwide for the milk their throwing out and nobody seems to be willing to blink first in curtailing supply just keep running up the overdraft and hope for better days

Timmaay · 24-01-2016 01:49AM

jaymla627 wrote: »

It's going to be a clusterf**k by the looks of it, all indications are unless a severe weather event occurs in America/Europe/new Zealand that suddenly cuts 4-5 % of the excess of world supply of what's already floating the game is up, all the spiel about weathering volatility and using grass won't count for f**k all with what's coming down the tracks , basically their too many cows worldwide for the milk their throwing out and nobody seems to be willing to blink first in curtailing supply just keep running up the overdraft and hope for better days

Supposedly us Europeans doing the worst of the damage also ha, all well up with no quotas now, NZ took a serious battering already with weather and greater exposure to the world prices. Next year or so certainly just about staying afloat.

Farmer Ed · 24-01-2016 09:06AM

But lads did ye not see George on to telly a while back? He seems to think we're all going to be rich. And didn't Simon predict last week that they'd be 5000 extra of us milking cows in a couple of years.
I suppose he must be including the farmers supplying the dairy boards new plant in China in his calculations . I wonder if those boy's will have to sign up to the same quality assurance scheme as us? Or will our milk be mixed with theirs and sold under the kerrygold brand?

Milk Price- Please read Mod note in post #1

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