Milk Price- Please read Mod note in post #1

whelan2 · 18-05-2016 09:18AM

WheatenBriar wrote: »

Its just ego and lack of brains tbh if you ask me
Fools and their money easily parted etc

Its probably not even their money, its the banks

Milked out · 18-05-2016 09:23AM

WheatenBriar wrote: »

rangler1 wrote: »

On milk price, it's seriously bad news to see farmers still expanding just to pump it into intervention......surely it's an indication that the intervention price is wrong

Its just ego and lack of brains tbh if you ask me
Fools and their money easily parted etc

A bit of a generalisation there. If the heifers are on the ground land bought or leased, sending the milk out the gate from those cows is part of the cost but not all of It as some of it is Incurred already. Obviously reduced replacements or lower of stocking rate may help but if fixed costs are going to be the same less litres will be covering a higher percentage of it

keep going · 18-05-2016 09:53AM

Back to milk price west cork base 25.56 plus vat , should be 24 but they are subbing it by 1.5 and could be more to come off it.due to solids the av price is near 27.edit correction .to price bit of a brain fart moment

visatorro · 18-05-2016 09:53AM

I dunno about different products. If you ever watch dragons den then they talk about crowded market space and people making niche products finding it very hard to get Into supermarkets.
The greens tried to bring in farmers markets for local niche products. Alright in theory but was never going to take off for various reasons. As farmers we can't all start making cheese yogurts etc, and expect to make a living from it. The processors made a decision to give there product a long shelf life. Maybe this is the only thing they could do for it to make sense financially.
Older generation would be watching the news and see the like of the camps of syrian refugees starving and would say why can't they fire a heap of chesse and butter at them to eat, Sounds stupid but there's probably abit of twisted logic in an older persons simple way of looking at things.

Milked out · 18-05-2016 10:02AM

keep going wrote: »

Back to milk price west cork base 23.56 plus vat , should be 22 but they are subbing it by 1.5 and could be more to come off it.due to solids the av price is near 27

That average include fixed price schemes?

Milked out · 18-05-2016 10:03AM

keep going wrote: »

Back to milk price west cork base 23.56 plus vat , should be 22 but they are subbing it by 1.5 and could be more to come off it.due to solids the av price is near 27

That average include fixed price schemes?

rangler1 · 18-05-2016 10:12AM

Milked out wrote: »

A bit of a generalisation there. If the heifers are on the ground land bought or leased, sending the milk out the gate from those cows is part of the cost but not all of It as some of it is Incurred already. Obviously reduced replacements or lower of stocking rate may help but if fixed costs are going to be the same less litres will be covering a higher percentage of it

Well then if they want to stabilise the market, they'll have to reduce intervention price to equalise supply /demand, it's unsustainable to be looking at boats full of butter in west cork again

darragh_haven · 18-05-2016 10:22AM

Dawggone wrote: »

Got an earful from my brother last night about taking a break from the 'addiction' of farming...
He does make perfect sense.
Going for a fortnight or three weeks holidays.

"What's it all for?"

If your the kind of person that can switch offf easily, 2 weeks would be more than enough. I can totally forget about work once i clock off on the finak day before the holiday.
My dad on the other hand would need a full week on the actual holiday before he could even start to relax. A load of 'what ifs' going through his head. Could not trust anyone to do the job as good as himself while away.

keep going · 18-05-2016 10:25AM

Milked out wrote: »

That average include fixed price schemes?

Posted wrong price , I 4hink not including

darragh_haven · 18-05-2016 10:26AM

keep going wrote: »

Back to milk price west cork base 25.56 plus vat , should be 24 but they are subbing it by 1.5 and could be more to come off it.due to solids the av price is near 27.edit correction .to price bit of a brain fart moment

A friend of mine showed me his milk statement from just over a month ago, and he got 29.9c/l. He was fierce disappointed because it was the first time since 2009 that he got below 30c/l for his milk.
Now that the base has dropped 2 c/l since then, he'll have to get used of it unfortunately.

kowtow · 18-05-2016 10:39AM

Dawggone wrote: »

"What's it all for?"

It's for the time being, that's all!

As long as we learn from it dairy farmers will come out better and stronger and we'll gradually build up the products and the culture to go with it. It takes a lot of hard work and a very long time, but farmers (unlike processors) are generally not frightened of either.

The trick is to learn from it, and not sit there waiting for the powder price to bounce back like a ball so everything is rosy again.

keep going · 18-05-2016 10:43AM

Milked out wrote: »

That average include fixed price schemes?

Posted wrong price , I 4hink not including

mf240 · 18-05-2016 11:01AM

I put four cows on oad. That should help the oversupply!!

kowtow · 18-05-2016 11:12AM

mf240 wrote: »

I put four cows on oad. That should help the oversupply!!

They should each get some kind of personal recognition from the EU - a special tag would do it:--

"Volunteer - helping the supply management effort"

Under the circumstances I think the celebratory tag should be free of charge.

kowtow · 18-05-2016 11:19AM

visatorro wrote: »

I dunno about different products. If you ever watch dragons den then they talk about crowded market space and people making niche products finding it very hard to get Into supermarkets.
The greens tried to bring in farmers markets for local niche products. Alright in theory but was never going to take off for various reasons. As farmers we can't all start making cheese yogurts etc, and expect to make a living from it. The processors made a decision to give there product a long shelf life. Maybe this is the only thing they could do for it to make sense financially.
Older generation would be watching the news and see the like of the camps of syrian refugees starving and would say why can't they fire a heap of chesse and butter at them to eat, Sounds stupid but there's probably abit of twisted logic in an older persons simple way of looking at things.

I agree with everything in your post.

Of course it's not realistic that every farm makes cheese, or every farm sells liquid milk at the local market. We don't live in that kind of economy any more (although it's surprising how much local food is returning in the US - as usual they are about 10 years ahead of the UK and another 10 in front of us)..

I think more than anything else there is a mindset here which has to change. In the last page or two the customer relationship comes into focus for the first time (I think) where milk price is concerned. The customer relationship properly belongs to the farmer - something we have lost sight of to our cost in the last half century or so.

That doesn't mean that we all need to stand at a market stall yelling for Mrs Miggins to buy our cream, instead we entrust that relationship to others in the chain - but when we do make that decision (choosing a co-op, allowing a merger, considering product mix, handing over control) I wonder how many of us actually think of the customer we are distancing ourselves from and how difficult it is to regain that control?

Many businesses entrust their customers to a distribution network, but all of the successful ones - in my experience - are damned careful about who they choose and on what terms.

As I said, it's a mindset.

whelan2 · 18-05-2016 11:26AM

Spoke with lad in farm services, all 6 levies I posted yesterday are compulsory. Also there is no premier grade milk anymore, grade 1 is the new premier grade

alps · 18-05-2016 11:44AM

kowtow wrote: »

It's for the time being, that's all!

As long as we learn from it dairy farmers will come out better and stronger and we'll gradually build up the products and the culture to go with it. It takes a lot of hard work and a very long time, but farmers (unlike processors) are generally not frightened of either.

The trick is to learn from it, and not sit there waiting for the powder price to bounce back like a ball so everything is rosy again.

Unfortunately, in the main we are led, by the herd mentality and by the shirt and tie brigade that finance themselves out of the milk levies and deduction columns of your milk statement.
The majority of these deductions are on a per litre basis, salaries of those working in the layers of professionals it takes to sell our powder, change up and down in percentage terms but never in line with the outcome of the price paid to the farmer...(The person that they were all put there to work for..And who finances them)

Ornua levy
Dept Inspection levy
Teagasc research levy
NDC levy
Bovine disease levy
ICBF tag levy
Dairy Council levy
FMP levy
Gov Services levy
Ifa/Macra/ICMSA levy

And all those needed to sell our bagged up commodities

Milk Quality Coop
ICOS
NDC
Ornua
Bord Bia and Origin Green
National Milk Agency
Irish Dairy Industries Association

All sucking off you on a per litre basis and none of it performance based....

Who's fault is it.....its yours....Rangler is right..

I remember a conference in Denmark a number of years back and the harshest comment I heard form that ..and it's absolutely correct..
"If your farm is not making enough money...its your own fault"

Now scream at that all you want, but until farmers stand up and say enough is enough, all we'll get is more of the same.

The elephant in the room is huge. ..Our product in its present form is not wanted, not at any price it seems, and we continue to produce more of it. We listen to the opinion formers about it being tough but the fundamentals are good, green shoots, longer term prospects....All the commentary we have heard before...
Grey crows picking your eyes out, but the fundamentals are fine.

Read Kowtow's passages again and again...its all there..

Passages from the modern day "Animal Farm"

kowtow · 18-05-2016 12:27PM

From the journal

I'm beginning to gather from his repeated optimistic predictions that Nathan Penny operates on the old market adage that "even a stopped clock will be right once a day"

Nathan Penny, rural economist with ASB bank, is more optimistic saying he expects Fonterra to set an opening milk price of $4.80/kg (22c/l). He goes on to say he expects payout will increase to $6/kg (27.5c/l) towards the end of the season, following a reduction in milk supply across the world.

Dawggone · 18-05-2016 12:58PM

kowtow wrote: »

From the journal

I'm beginning to gather from his repeated optimistic predictions that Nathan Penny operates on the old market adage that "even a stopped clock will be right once a day"

. Twice a day!

(unless 24hr).

You're implying that price is NOT going to rise??

Local union rep called to me this morning to tell me to back off a local farm that's for sale...yea right!!

Anyhow I engaged him on the price of grains and milk.
(It's important to know that French farmers, when they meet, discuss prices. Nothing else. Irish farmers discuss weather etc)

He said that intervention price has to be halved or abolished because it's just 'extend and pretend', and prolonging the adjustment. Now, he's not a dairy farmer as he only produces grains, but his comment about technology rang true...technology is about 20yrs ahead of consumption.

So...looks like intervention is the new 'China'.

Farmer Ed · 18-05-2016 01:31PM

alps wrote: »

Unfortunately, in the main we are led, by the herd mentality and by the shirt and tie brigade that finance themselves out of the milk levies and deduction columns of your milk statement.
The majority of these deductions are on a per litre basis, salaries of those working in the layers of professionals it takes to sell our powder, change up and down in percentage terms but never in line with the outcome of the price paid to the farmer...(The person that they were all put there to work for..And who finances them)

Ornua levy
Dept Inspection levy
Teagasc research levy
NDC levy
Bovine disease levy
ICBF tag levy
Dairy Council levy
FMP levy
Gov Services levy
Ifa/Macra/ICMSA levy

And all those needed to sell our bagged up commodities

Milk Quality Coop
ICOS
NDC
Ornua
Bord Bia and Origin Green
National Milk Agency
Irish Dairy Industries Association

All sucking off you on a per litre basis and none of it performance based....

Who's fault is it.....its yours....Rangler is right..

I remember a conference in Denmark a number of years back and the harshest comment I heard form that ..and it's absolutely correct..
"If your farm is not making enough money...its your own fault"

Now scream at that all you want, but until farmers stand up and say enough is enough, all we'll get is more of the same.

The elephant in the room is huge. ..Our product in its present form is not wanted, not at any price it seems, and we continue to produce more of it. We listen to the opinion formers about it being tough but the fundamentals are good, green shoots, longer term prospects....All the commentary we have heard before...
Grey crows picking your eyes out, but the fundamentals are fine.

Read Kowtow's passages again and again...its all there..

Passages from the modern day "Animal Farm"

You are totally correct in 99% of what you are saying. The problem is we are constantly told not to concern ourselves about what happens outside the farm gate. You even have people on hear suggesting the only reason we are not getting a good price for milk is because our solids are not good enough. The levies you have correctly identified are only the tip of the iceberg. How much more from the greater agricultural budget that is not itemised in your milk statement is all this costing farmers. The sting in the tail is that a lot of the boards of these quangos are made up of our fellow farmers. In effect we are being sold down the river by our own. Amazing what a position on a board can do to change someone's prospective. But you are dead right. It's about time we collectively woke up and shouted stop.

Buford T. Justice XIX · 18-05-2016 01:47PM

Kerry 'forgot' to pay today, a gentle reminder of who pays for the milk:rolleyes:

Milked out · 18-05-2016 01:48PM

http://theglobaldairy.com/noticias/dairy-super-downcycle-now-on-says-rabobank-46892/

coolshannagh28 · 18-05-2016 02:42PM

I am no expert but how has the price held up for high butterfat and protein milk from Jersey s for example?

Farmer Ed · 18-05-2016 02:47PM

coolshannagh28 wrote: »

I am no expert but how has the price held up for high butterfat and protein milk from Jersey s for example?

No but as you are paid for kgs of protein and fat and price of milk from cows producing high solids should always make more per litre. But that milk will be hit by falling milk prices also.

alps · 18-05-2016 02:52PM

coolshannagh28 wrote: »

I am no expert but how has the price held up for high butterfat and protein milk from Jersey s for example?

Milk price is not actually paid in cent/litre. You are actually paid for the kgs of fat and protein that you deliver. This payment for fat and protein is then reflected in a cent per litre price at a standard of 3.6 fat and 3 3 protein.
The farmer supplying high fat/high protein milk will earn in excess of this standard 3.6/3.3, so if this milk is 3c/l over the milk price at 25c/l it can be 4c/l over the milk price at 28c/l and so on.
Of course the reverse is the case when milk price is falling. The quoted standard 3.6/3.3 milk price may be down by 6c/l but the high solids operator will be down by 8c/l....culminating last November when some high solids operators were down 15c/l from the previous year.

It's an interesting point...do high solids operators loose more at low milk prices? Are low solids operators protected more? Ahemm

keep going · 18-05-2016 02:59PM

Just thinking there be a nice little thesis for a phycology student here on the different stages of peoples reaction to a crisis using the postings of dairy farmers on here."its not going to happen", "ouch this going to hurt", "its the end of the world",", there no way out","dont care anymore","do you know im still here","im managing","things arent so bad","things are flying it"

Buford T. Justice XIX · 18-05-2016 03:07PM

I remember when we got back milking in 1987, people were so depressed at milk making 80p a gallon and down from £1 a gallon the year before.

We were thrilled to be getting 80p and the cash flow that came with it during the summer. Happy days indeed.

It's all a matter of perception whether times are good or bad.

No point going crazy when milk is 24c or 44c, just carry on doing what you need to be doing.

kowtow · 18-05-2016 03:09PM

keep going wrote: »

Just thinking there be a nice little thesis for a phycology student here on the different stages of peoples reaction to a crisis using the postings of dairy farmers on here."its not going to happen", "ouch this going to hurt", "its the end of the world",", there no way out","dont care anymore","do you know im still here","im managing","things arent so bad","things are flying it"

As you say, it's all out there if you look for it. Greed, justification, fear, denial, hope, despair... it would be a great subject for a thesis: "white gold and the madness of crowds revisited"

alps · 18-05-2016 03:12PM

Buford T. Justice V wrote: »

I remember when we got back milking in 1987, people were so depressed at milk making 80p a gallon and down from £1 a gallon the year before.

We were thrilled to be getting 80p and the cash flow that came with it during the summer. Happy days indeed.

It's all a matter of perception whether times are good or bad.

No point going crazy when milk is 24c or 44c, just carry on doing what you need to be doing.

And we're back to 80p a gallon again now....and we can produce all we want...flying it....

kowtow · 18-05-2016 03:25PM

Interesting article in the journal about US milk / butter demand including the thesis that the world market floor price is set by the high cost producers, with the implication that the US is among them (although no cost of production data). The issue being that the margin protection insurance in the US (not really, as suggested in the article, a direct government support but anyway) will put downward pressure on the floor price.

I calculate US cost of production to be between EUR 28c/kg milk sold and EUR 38/c kg depending on farm size and excluding the margin protection program. Those costs include all land, and labour (paid & unpaid) - some of the data set is from 2015 so it's possible that the low end is even a bit lower now due to grain / oil which I suspect would weigh heavily on the super dairy sized operation.

Hmmm.

Milk Price- Please read Mod note in post #1

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