Milk Price- Please read Mod note in post #1

kowtow wrote: »

First and most important principle, farmer co-ops own the transporters. The overriding principle of a co-op should be to get the farmers milk to the market, ie. to the processor able to pay best for it at the time, subject to the approval of the farmer. In other words the co-op takes the milk to market because sharing an expensive time sensitive milk lorry with your neighbours is quite obviously the common sense thing to do.

Processors can be owned by anybody who wants to process. In the first instance of course most co-op suppliers already own part of a processor, so perhaps you would split these out. Existing suppliers would end up with distribution shares, processing shares, and milk supply agreements would then need to be addressed.

Distributors could certainly keep agri-supply, inputs etc. I would have thought. Is there any obvious reason why a large scale international dairy commodity business is the best entity to weigh dry and compound straights or sell fertiliser, or a cup of coffee, or green diesel, or a bunch of filter socks?

I don't see why a farmer should need to own a processor to supply it, but there is no reason at all why he shouldn't choose to support a particular processor by investing in it (as he does today) - he might choose to support more than one. And of course he can support a processor by contracting with it for his milk supply (or perhaps an equivalent volume of a certain quality) - at a fixed price, at a variable price, for a term or on whatever he can agree. Maybe he wants to basically supply powder at the floating market price, have a fixed price liquid contract with another supplier, and supply 30,000 litres a year for free to a small scale cheese-maker in return for shares while they get started and into market, whatever - provide a rich efficient distribution network and let entrepreneurial creativity do the rest.

There's obviously an issue of logistics - where the actual milk from an actual farm goes. Some processors will need to know this (particularly the artisan ones) and others won't care as long as the quality can be certified. It ought to be possible for co-ops to exchange powder milk in the way electricity companies do - and simply deliver the net balance to each other to minimise costs. In other words, if I want to supply 100,000 litres to powder the milk might come from Whelan's tank, because when push came to shove less lorry journeys were involved. That much is not rocket science.

And of course there is the big issue - what happens to the milk nobody wants? The answer is, the same as happens today, someone will buy it for the minimum price and turn it into powder for intervention or God knows what - and that is what is happening today, no matter how much it is disguised by loyalty payments, support payments, or any other return of shareholders funds.

Edit:

And when excess milk has to be virtually given away, more farmers will choose to support some little artisan, or an innovative vodka, or a science based protein start up, and some will fail and some will succeed and each time around we will have a more exciting, higher premium, dairy processing market so sell into. Our milk supply will grow because we have the products for it, not the other way around. Ask yourself, if amazon or google or apple were doing dairy processing in Ireland, would they really do it the way it is done today?

kowtow wrote: »

No idea on the share-up as I don't supply a co-op, although might start soon with the excess.

I think that French example ought to be studied very carefully by every Irish dairy farmer. The fact that the processors were so keen to fight - on a technical point - NOT to have the system tells you much more than any post of mine can about why we need to rebuild this from the ground up.

If you have a link or anything to coverage of it flick it over to me.

kevthegaff wrote: »

Looks like the ball is rolling, my days in dairy could be numbered.

kowtow wrote: »

Can't remember if there is a judicial review mechanism for the EU. Probably not given their fondness for opaque centralised government.

Capricious move if it does happen, classic jr territory.

kowtow wrote: »

I suspect if there was compensation attached there wouldn't be... but amazing scope for argument on the basis of it. My guess is you'd be more likely to get a new form of quota which does the same job.. possibly nitrates related? tradeable? ... give it a green label will save paying compensation to anyone.

Good for organics, people with big milky Holsteins, and close friends of politicians I suspect.

Would look at the first with interest, always aim to be the second, and cut off my own head before becoming the third.

kowtow wrote: »

Surely on nitrates the profit lies with the biggest cow on the smallest area? - Or would the nitrates "ticket" travel with the land?

Roll nitrates into SFP entitlements, make them more tradeable and pledge to reduce the payout element steadily every year from here to eternity? Make Europes farmers greener and cheaper? grant aided AD plants everywhere to get around it?

I can see endless fun here, there'll be so many oversized and ugly digesters in Munster it'll look like the canape table at an EU leaders summit.