Milk Price- Please read Mod note in post #1

Dawggone · 30-04-2016 01:42PM

kowtow wrote: »

Unfortunately there's nothing else it could be tied to as long as we are determined to produce so much of it that we can't drink or turn into premium food products......

FWIW I don't buy the idea of a knowing conspiracy by China at all... unknowing, perhaps - the Chinese government is constantly trying to fool it's own markets in order to prevent the mother of all meltdowns, witness the current activity of off balance sheets vehicles in Chinese domestic commodity markets which is driving a strong retracement in metals for example...

Every time they try this the consequences are disastrous... but it takes time to learn free markets and the populace isn't often prepared to allow governments that time.

The Chinese are holding a lot of western paper and wondering what the hell to do with it while trying to keep the hopes and expectations their own population of "new capitalists" in a place where the elites can retain their traditional power.

Frankly they have much bigger things to worry about than milk.

It's a bit like us trying to solve the Irish banking crisis by manipulating the price of wasabi.

+1.

freedominacup · 30-04-2016 02:08PM

WheatenBriar wrote: »

Is there any point?
They usually agree with you on the phone and then go off to the board meetings to vote against you citing the law on fiduciary duties regarding board decisions

In two words Brendan Hayes. There's no law on fiduciary duties afaik. I don't think there's even stock market rules governing tbh.

WheatenBriar · 30-04-2016 02:26PM

freedominacup wrote: »

In two words Brendan Hayes. There's no law on fiduciary duties afaik. I don't think there's even stock market rules governing tbh.

That's incorrect,Glanbia Plc board members have fiduciary responsibilities which prevent them promoting farmers interests versus the plc's interests

https://www.cro.ie/conversions/companies-act-2014/directors-duties

Specifically:

Fiduciary Duties

The principal fiduciary responsibilities of a director are set out in Part 5 of the Companies Act 2014.

There is a requirement on a director to act in good faith, to act honestly and responsibly and to act according to the company’s constitution. There is a requirement for the directors to have regard to the interests of the company’s employees as well as to the interest of the members. Under section 231 of the Act, there is a duty on directors to disclose any interest they have in contracts made by the company. The duties set out in the Act are not exhaustive and will still require directors to consider obtaining legal advice concerning compliance with their duties.

Section 228 states: 1) A director of a company shall—

(a) act in good faith in what the director considers to be the interests of the company;
(b) act honestly and responsibly in relation to the conduct of the affairs of the company;
(c) act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law;
(d) not use the company’s property, information or opportunities for his or her own or anyone else’s benefit unless—
(i) this is expressly permitted by the company’s constitution; or
(ii) the use has been approved by a resolution of the company in general meeting;
(e) not agree to restrict the director’s power to exercise an independent judgment unless—
(i) this is expressly permitted by the company’s constitution; or
(ii) the case concerned falls within subsection (2);
(f) avoid any conflict between the director’s duties to the company and the director’s other (including personal) interests unless the director is released from his or her duty to the company in relation to the matter concerned, whether in accordance with provisions of the company’s constitution in that behalf or by a resolution of it in general meeting;
(g) exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person having both—
(i) the knowledge and experience that may reasonably be expected of a person in the same position as the director; and
(ii) the knowledge and experience which the director has; and
(h) in addition to the general duty under section 224 (duty to have regard to the interests of its employees in general), have regard to the interests of its members.
(2) If a director of a company considers in good faith that it is in the interests of the company for a transaction or engagement to be entered into and carried into effect, a director may restrict the director’s power to exercise an independent judgment in the future by agreeing to act in a particular way to achieve this.

(3) Without prejudice to the director’s duty under subsection (1)(a) to act in good faith in what the director considers to be the interests of the company, a director of a company may have regard to the interests of a particular member of the company in the following circumstances.

(4) Those circumstances are where the director has been appointed or nominated for appointment by that member, being a member who has an entitlement to so appoint or nominate under the company’s constitution or a shareholders’ agreement.

case885 · 30-04-2016 03:21PM

keep going wrote:

Why lose, lose.fair enough at the moment we are a head but we re not stupid enough not to know that the scene is changing around us and in the scheme of things we have a scale problem

How is scale going to affect us? Bigger is not always better especially when it comes to dairy farming, efficiency is what will separate the best and worst. Carbery are paying the best price because of the diversification of the business, there's a good mix of liquid milk, cheese, whey protein so they don't hedge they're bets.

Water John · 30-04-2016 03:22PM

Yes, Fiducary responsibilities are the key governance of how a Director of a plc is to behave. He/She must act in the best interests of the Company and through that, the shareholders.

It is diifferent for a Director of a Coop. He/She must act with responsibility to the shareholders first and through them the Coop.
Of course the shareholders should have a vested interest in any coop. That is it should be a trading part of his business.
Dry shareholders in a coop are a perversion.
There is also a higher responsibility on Directors of a coop. They must safeguard the coop in the interest of the shareholders.
Pleading ignorance, or deferring to the views of management without challenge is not good enough.

Carbery have over a long period positioned themselves. They have not got everything right. that's fair enough. One always takes some risk in business.

They would have no miracle wand to use the large supply of either DG or Glanbia. I suspect, over time they would.
A reverse T/O of DG might work.
There would be a fair bit of ass kicked.
They could supply management to DG and keep the entities some what separate. It would be a long term strategy.
Would not rule any ideas out.

I think however, a strategic alliance by Carbery with similar minded coops, Arrabawn and Lakeland for example might be the best strategy for these coops.
Maintaining independence and yet having strength.

kowtow · 30-04-2016 03:42PM

WheatenBriar wrote: »

That's incorrect,Glanbia Plc board members have fiduciary responsibilities which prevent them promoting farmers interests versus the plc's interests

+1

And - quite apart from the specifics of the Companies Act - the duty to act in Shareholders interests requires Directors to act in the interest of all the shareholders qua shareholders in other words regardless of their particular role in life (farmer, investor, or whatever). This is the case regardless of the numbers of each which make up the shareholders register.

Take an extreme example by way of explanation. If a company happened to own a hydroelectric dam, and 90% of it's shareholders would be flooded out by expanding it (at no cost to the company, and legally)... the Directors would in the first instance be duty bound to do the most profitable thing for the shareholders pockets, rather than their properties, which might well end up destroying their houses.

It sounds stupid and is unlikely to happen - but your interests as a shareholder often differ from your interests as a farmer or supplier and boards must act only in respect of the shareholder interest. This is one of the things never pointed out when the shiny PLC shares are handed over and board appointments are talked about, and one of the reasons it's really not enough to give up the farmers co-operative and hope to make money back on the shares. Somebody has to lose in these deals, and it's the farmer supplier most of the time.

WheatenBriar · 30-04-2016 04:06PM

kowtow wrote: »

+1

And - quite apart from the specifics of the Companies Act - the duty to act in Shareholders interests requires Directors to act in the interest of all the shareholders qua shareholders in other words regardless of their particular role in life (farmer, investor, or whatever). This is the case regardless of the numbers of each which make up the shareholders register.

Take an extreme example by way of explanation. If a company happened to own a hydroelectric dam, and 90% of it's shareholders would be flooded out by expanding it (at no cost to the company, and legally)... the Directors would in the first instance be duty bound to do the most profitable thing for the shareholders pockets, rather than their properties, which might well end up destroying their houses.

It sounds stupid and is unlikely to happen - but your interests as a shareholder often differ from your interests as a farmer or supplier and boards must act only in respect of the shareholder interest. This is one of the things never pointed out when the shiny PLC shares are handed over and board appointments are talked about, and one of the reasons it's really not enough to give up the farmers co-operative and hope to make money back on the shares. Somebody has to lose in these deals, and it's the farmer supplier most of the time.

This is where the Plc status farmers voted to create all those years ago has come back to bite them a million fold
The only benefit they get is a rare spin out-only 4 in my memory in 30 years,two of which were only worth chicken feed for the first 20 years,all the while the new big honchos were feathering their own nests with salaries expenses etc etc and maximising farmer price reduction misery as much as possible to boot,shoring up said feathered nest

Farmer Ed · 30-04-2016 04:22PM

keep going wrote: »

Lorry driver told this morning 2 guys giving up milking near here, both younger than me.if it was possible for carbery to take over/amalgamate with dairygold and gii , would ye be in favour

The DG chairman has floated the idea on a number of occasions that there might be the possibility that "the Chinaman" may come with his cheque book and buy Dairygold. If that happens it might be a good idea for DG farmers to buy some pictures of the Chinese leader to put on their wall now. When it becomes compulsory and everyone has to buy them, they may well go up in price.

So much for Co Op etous, I'm gob smacked every time I think about a Co Op chairman even contemplating such an idea.

pedigree 6 · 30-04-2016 04:55PM

Way way off topic. But I think if I endured this.
I'd be guaranteeing food supply and buying land in different parts of the world to spread any risk. Especially if the land in china is f*ecked from past practises.
https://en.wikipedia.org/wiki/Great_Chinese_Famine

Way off topic but links in with other posts I did.
Whether true or not is a different story.:rolleyes:

Pacoa · 30-04-2016 05:16PM

On the subject of china, heres an interesting article I've just been reading.

http://theglobaldairy.com/noticias/bought-out-chinas-attack-on-agriculture-46516/

Farmer Ed · 30-04-2016 05:27PM

Pacoa wrote: »

On the subject of china, heres an interesting article I've just been reading.

http://theglobaldairy.com/noticias/bought-out-chinas-attack-on-agriculture-46516/

Looks like we are all going to be rich so! Any truth in the rumor that they changed the name of the calf to Oramadán? Great name for a Co Op I would have thought.

http://www.dairygoldfoodingredients.com/files/12_02_Dairy_Industries_online_-_Chinese_vice_president_visits_Irish_Dairygold_farm.pdf

Water John · 30-04-2016 05:44PM

The directors of a coop have different responsibilities than those of a plc.
Kowtow, your example is very good. In the case of a coop this would operate differently and the net benefit overall to the shareholders/farmers would or should predominate, not the narrow interest of the plc.
Great Example.

The spinout of REOX which sold the very brands of Dairygold, including its own name is exactly as described by Kowtow.

The danger in DG Coop, is the dry shareholders cashing in their shares. This may not be in the interests of the shareholders/suppliers. But only something over 2,600 are suppliers out of a total of 9,000. Very high risk.
We are in no way reassured that the Board would act in the best interest of the active shareholders over the will of the dry. Would they 'entertain' the chinaman if he came calling?

Arrabawn did not entertain DG.
This is a very important reason to have good Directors. They don't 'entertain' what is not in the shareholders interest.

pedigree 6 · 30-04-2016 07:23PM

Pacoa wrote: »

On the subject of china, heres an interesting article I've just been reading.

http://theglobaldairy.com/noticias/bought-out-chinas-attack-on-agriculture-46516/

That's the one rightturnclyde linked up before another website had that and global dairy put it on their website then.

It's just interesting that they are buying farmland, food companies, agrichem companies.
I don't think we've anything to be worried about in this country. There's no farm big enough to be interested in.:D

Anyway enough from me about the Chinese them dutch however....:pac:

Buford T. Justice XIX · 30-04-2016 08:23PM

pedigree 6 wrote: »

That's the one rightturnclyde linked up before another website had that and global dairy put it on their website then.

It's just interesting that they are buying farmland, food companies, agrichem companies.
I don't think we've anything to be worried about in this country. There's no farm big enough to be interested in.:D

Anyway enough from me about the Chinese them dutch however....:pac:

It mightn't be a tinfoil hat conspiracy theory at all.

The Chinese have an authority that has the stability to put a long term economic plan in place, especially as they have abandoned the one-child policy that limited population growth. It would make sense to secure diverse supplies of food for the growth that seems to be on the way.

pedigree 6 · 30-04-2016 08:53PM

Buford T. Justice V wrote: »

It mightn't be a tinfoil hat conspiracy theory at all.

The Chinese have an authority that has the stability to put a long term economic plan in place, especially as they have abandoned the one-child policy that limited population growth. It would make sense to secure diverse supplies of food for the growth that seems to be on the way.

Ah it's just a bit of banter on a Saturday afternoon.
True or not. There's nothing the likes of you or me can do about it.
We're dust in the wind to that sort of thing.

Farmer Ed · 30-04-2016 09:21PM

Two "successful" Irish companies teaming up and pinning their hopes on China.

In terms of expansion into China, Keenan explains that developments are going according to plan.

“In Asia, food production is a government issue, a huge priority. Countries have got to produce milk more efficiently to sustain rural development, improve farmer incomes without pushing up food prices, and meet environmental limitations.

“China is especially interesting for Keenan because we were getting the endorsement of leaders in nutrition even before we started doing business in 2013.”

He said the visit last June of Dr Zhang, China’s Vice Minister for Agriculture with responsibility for technologies, was crucial.

“His presence was a powerful statement of China’s interest in Keenan feed efficiency technology. Since the visit, we have reached agreement with a state owned enterprise, Caams, for a service infrastructure to support our food chain alliances, Yan Hua and others developing.”

Dairy
Another key alliance this year is with Dairygold, he added.

“This is hugely important because this directly relates to the ambitious targets to grow Ireland’s milk production by 50 per cent. Dairygold is a major milk processing co-operative and it’s a major feed supplier.

“Dairygold want to help their farmers increase milk production through feed efficiency. This is a breakthrough in Ireland’s ambitious plans to increase milk production by 2020.”

“Ireland has a huge natural asset in grass. The average milk production per cow is 5,000 litres. Last year the average milk production was 5,000 litres per cow and concentrates fed per cow was one tonne. We are confident a target of 7,000 litres per cow from one tonne is a very achievable goal.”

In terms of increasing milk production by 50 per cent, he said there were two conventional ways for Ireland to do this. “One is to increase cow numbers and the other is to increase the concentrate portion of the ration. The third way is feed efficiency using the best of Irish grazing technology and the best feed efficiency technology.”

He believes the feed efficiency option is far superior to the other two options. “It carries less risk, less investment and more returns to farmers. This too is vital to processors gearing up for expansion and markets opening up as quotas lift. The limiting factor could be farmers’ willingness to expand.”

What Dairygold and Keenan are doing is absolutely relevant to Ireland’s 2020 goals and to the industry across Ireland, he added.

“More milk from the same land, feed and water resources is good for farmers, processors, agri-business and the wider economy.”

Pictured: Dr Gordon Purvis, University College Dublin, Gerard Keenan, speaker and Dr Liam Downey former head of Teagasc

Follow Us On Twitter To Keep Up To Date!

Water John · 30-04-2016 09:32PM

That's very interesting Ed.
Keenan and Dairygold get special mention. The man who is now the top man in China is on friendly terms with James Lynch having had his hospitality!!!
Also all the Board visited a few years ago.

Keenan now bought out by Alltech.

One would be worried if Dairygold is in play.

atlantic mist · 30-04-2016 09:43PM

director have duties under company law and they also have duties under stock exchange rules, our need to know both

kowtow example of the dam paints the picture directors only job is to be profit motivation while he is correct that is their one of their main duties, we and the markets now expect more from our directors and especially listed companies, directors now have ethical and social responsibilities for not just the shareholder but also the stake holders which include communities and suppliers and can be seen by the increased financial reporting in addition to the financial company accounts, look back a few years and they didnt exist but this is the new market requirement we down want companies that just deplete the world solely focused on the margin they dont benefit society, they need to be good corporate citizens these can be seen in our plc annual report under Corporate social responsibility and sustainability. The suppliers do not get a mention in the plc report on sustainability or corporate responsibility and this needs to be addressed the next time the pull out the fiduciary responsibility line, we do get a mention in the risk report, social media will be added next year im sure

Water John · 30-04-2016 10:00PM

Atlantic,The concept of 'Fair Chain' should be incorporated into Corporate Social Responsibility.

Farmer Ed · 30-04-2016 10:04PM

Water John wrote: »

That's very interesting Ed.
Keenan and Dairygold get special mention. The man who is now the top man in China is on friendly terms with James Lynch having had his hospitality!!!
Also all the Board visited a few years ago.

Keenan now bought out by Alltech.

One would be worried if Dairygold is in play.

Amazing how Co Op accounts never show a loss and how milk price always gets "supported" by a nice round 20m in a bad year.

http://www.irishexaminer.com/business/profits-plunge-14m-at-dairygold-91161.html

kevthegaff · 30-04-2016 10:05PM

Water John wrote: »

The directors of a coop have different responsibilities than those of a plc.
Kowtow, your example is very good. In the case of a coop this would operate differently and the net benefit overall to the shareholders/farmers would or should predominate, not the narrow interest of the plc.
Great Example.

The spinout of REOX which sold the very brands of Dairygold, including its own name is exactly as described by Kowtow.

The danger in DG Coop, is the dry shareholders cashing in their shares. This may not be in the interests of the shareholders/suppliers. But only something over 2,600 are suppliers out of a total of 9,000. Very high risk.
We are in no way reassured that the Board would act in the best interest of the active shareholders over the will of the dry. Would they 'entertain' the chinaman if he came calling?

Arrabawn did not entertain DG.
This is a very important reason to have good Directors. They don't 'entertain' what is not in the shareholders interest.

John the offer on the table was 2 euro a share I think, Ryan got it in independently valued at 4 euros. A few farmers were giving out why they didn't take the offer (mainly guys that were leaving!!!) My reply was we should be getting 5-6 a share but I was glad at the time nothing came of it, even tho Arrabawn weren't that glamorous at the time

Water John · 30-04-2016 10:16PM

It wasn't Arrabawn they were after. It was the milk supply.
Not one litre of milk would have been processed in Nenagh in a few years, guaranteed.
Ye dodged a bullet there.

Farmer Ed · 30-04-2016 10:24PM

kevthegaff wrote: »

John the offer on the table was 2 euro a share I think, Ryan got it in independently valued at 4 euros. A few farmers were giving out why they didn't take the offer (mainly guys that were leaving!!!) My reply was we should be getting 5-6 a share but I was glad at the time nothing came of it, even tho Arrabawn weren't that glamorous at the time

Reminds me of a drunk going into a pup and making an insulting offer to buy the place. Then when the owner of the pub tells him the pub is not for sale. He comes back and tries to get all the other customers in the pub to leave and go to a different pub.
The reality is the man was drunk in the first place and couldn't afford to buy anything apart from more drink.

darragh_haven · 30-04-2016 10:24PM

keep going wrote: »

Lorry driver told this morning 2 guys giving up milking near here, both younger than me.if it was possible for carbery to take over/amalgamate with dairygold and gii , would ye be in favour

Out of interest KG, what kind of cow numbers would these 2 suppliers have.

kowtow · 30-04-2016 11:56PM

atlantic mist wrote:

kowtow example of the dam paints the picture directors only job is to be profit motivation while he is correct that is their one of their main duties, we and the markets now expect more from our directors and especially listed companies, directors now have ethical and social responsibilities for not just the shareholder but also the stake holders....

Quite right, and sustainability as I have said before is in the long term interests of the processors. There is good reason not to over-exploit the suppliers and to pay the fairest price possible..

My main reason in making the point I did was to clarify that it doesn't matter to a company director - can't matter in fact- that one, most, or all of his shareholders are farmers. In that sense farmer representation on a plc board is a little bit of a gesture, the board must put all the shareholders first. That's not to say that p**ssing off 40% of the share register is a good tactic.

*as others have rightly pointed out this is absolutely not the case in a coop something which I should have made clear in my post above, constitutionally speaking the members of co operatives are a different animal to the members of a limited company.

kowtow · 01-05-2016 12:01AM

Water John wrote:

Atlantic,The concept of 'Fair Chain' should be incorporated into Corporate Social Responsibility.

The trouble with CSR is that it is not- cannot - create a specific duty to suppliers. That would make a nonsense of contract relationships.

Companies ought to be ethical and can lose face and customers if they aren't but it's difficult to sue on that basis.

Water John · 01-05-2016 12:09AM

I just think that bringing 'fair chain' into the equation, in some way, could provide some comfort to the supplier/farmers. Especially those now at the whim of plc's namely Glanbia and Kerry.
The actual mechanism could be for debate.

The farmer/suppliers of Dairygold, it being a coop, may have to place their faith in St. Jude.

keep going · 01-05-2016 01:58AM

darragh_haven wrote: »

Out of interest KG, what kind of cow numbers would these 2 suppliers have.

Dont quote me but id say around 70 for one and 40 for the other, got word tonite that another is considering.

Bass Reeves · 01-05-2016 09:20AM

keep going wrote: »

Dont quote me but id say around 70 for one and 40 for the other, got word tonite that another is considering.

Age profile and successor profile might be more interesting. 40 cow farmer more than likely would be as well off with drystock and an off farm job unless you had a landbase to expand

whelan2 · 01-05-2016 09:56AM

Bass Reeves wrote: »

Age profile and successor profile might be more interesting. 40 cow farmer more than likely would be as well off with drystock and an off farm job unless you had a ladbase to expand

wonder what way does it work out if you gave up milking before the msa period is up?

Milk Price- Please read Mod note in post #1

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