Milk Price- Please read Mod note in post #1

Water John · 21-05-2016 11:14AM

Buford, yes its in the article.
The most important person to read in that is Melvin. The biggest risk to farm safety is over work, tiredness and stress.

CEO DG said that supplies in the last few weeks were up 3.5% on last year.

atlantic mist · 21-05-2016 01:56PM

ornua have a similar turnover to glanbia, never knew that before. the big flucation in their price index is confusing considering they are selling the bulk of our branded business

http://www.ornua.com/our-group/ornua-ppi/

Half as many people working for them as glanbia, but it appears they have a defined benifit scheme in place according to accounts......crazy stuff, who is sitting on these remuneration committees????

kowtow link to us data was interesting, bit of work involved converting to kg then back to euro:) only half of us suppliers in milk margin program, id imagine other half are selling into futures
previously they did reduce supply wit world milk prices below the 27c mark, wouldnt happen this time around, cheap grain has now reduced this further amkes them more cometitive.
They have a strong domestic market and better tools than us to deal with volatility, higher feed cost even out by lower wage costs, need to have a 1000 cows to have efficient set up be some laugh over here thunder rain storm with 1000 cows running round in circles be some image from a plane, munster to turn black and white, i drove past a farm not far from me yesterday that increased to 500 last year, couldnt see a blade of grass with all the black and white in paddock, cant see it hapening here we couldnt even put up a turbine with local objection and environmental issues relating to birds, so our industry needs to be structured accordingly not for factory farms, bulk and low cost...
Thought the new york farmers would be getting a bit more, based on location, why didnt you set up shop their kowtow, direct access to market their is an opportunity their
Love the opportunity cost of labor included, dont know what they are spending on marketing, if we had their milk price and our costs wed be in a good position but our milk price is linked the asia/oceanic domestic milk, us only affects us to what they produce for export and the volume we export to us, if price is their they sell if not their government will buy and give out to ngos

kowtow · 21-05-2016 03:14PM

atlantic mist wrote: »

Thought the new york farmers would be getting a bit more, based on location, why didnt you set up shop their kowtow, direct access to market their is an opportunity ...

I won't say I wasn't tempted but the lure of home got me in the end.. and West Cork was the only place I think of with sufficient sense of humour to take on a couple of free range children who had never seen a "proper" school..

keep going · 21-05-2016 07:41PM

kowtow wrote: »

I won't say I wasn't tempted but the lure of home got me in the end.. and West Cork was the only place I think of with sufficient sense of humour to take on a couple of free range children who had never seen a "proper" school..

Didnt know you were a neighbour, between you and browned ive a bit of detective work to do:-)

kowtow · 21-05-2016 08:45PM

keep going wrote: »

Didnt know you were a neighbour, between you and browned ive a bit of detective work to do:-)

I reckon it'd be easy enough to find Browned.

Can't be too many farms with a hammock strung outside the parlour door at this time of year

Farmer Ed · 21-05-2016 09:04PM

http://www.farmersjournal.ie/asian-companies-invest-3-6bn-in-russian-dairy-production-209387

einn32 · 22-05-2016 04:21AM

tmp_12432-20160522_0818062106754297_zpsbdyvdd3c.jpg~original

On the Fonterra tanker!

Farmer Ed · 22-05-2016 06:10PM

http://www.irishexaminer.com/farming/news/icos-focus-on-price-undermines-dairy-potential-332015.html#.VV8PUl-Li-g.facebook

Is this guy on drugs or what? He still tries to give the impression he is acting in the best interests of 150000 Irish Dairy farmers. If the price falls much more, that figure could drop below 10000 a lot quicker than we might think!

If there was ever a good example as to why that quango should be scrapped. Surely this must be it?

jaymla627 · 22-05-2016 06:53PM

Farmer Ed wrote: »

http://www.irishexaminer.com/farming/news/icos-focus-on-price-undermines-dairy-potential-332015.html#.VV8PUl-Li-g.facebook

Is this guy on drugs or what? He still tries to give the impression he is acting in the best interests of 150000 Irish Dairy farmers. If the price falls much more, that figure could drop below 10000 a lot quicker than we might think!

If there was ever a good example as to why that quango should be scrapped. Surely this must be it?

With the likes of this representing glanbia farmers on the board their really is no hope, he has his snout in the trough and probably a heap of plc shares under his pillow so of course his general consensus is going to be f**k the small lad barely making ends meat....
once him and corbally and all the other boys that are suited and booted are looked after ever thing is fine in their world

whelan2 · 22-05-2016 07:20PM

jaymla627 wrote: »

With the likes of this representing glanbia farmers on the board their really is no hope, he has his snout in the trough and probably a heap of plc shares under his pillow so of course his general consensus is going to be f**k the small lad barely making ends meat....
once him and corbally and all the other boys that are suited and booted are looked after ever thing is fine in their world

We effectively have zero farmer representation. The board members are so far out of touch with reality its laughable.

freedominacup · 22-05-2016 07:37PM

whelan2 wrote: »

We effectively have zero farmer representation. The board members are so far out of touch with reality its laughable.

We voted them in. A friend of mine with strong ambitions in the direction of the board said to me that a huge percentage of the board get appointed by their areas to the family seat in their late thirties/early forties and are duly re-elected every couple of years until compulsory retirement. At least one joker from a midland county is currently moving heaven and earth to get his arse in a plc board seat despite the fact he'll have to compulsorily retire from both before the year is out. With a clear conscience farmers in my area can point out fingers at most other areas within glanbia and say what are ye bitching about ye keep electing these knuckleheads. Hands up anyone from corbolixes area so that the rest of us can offer ye our thanks. This halfwit rose without trace to one of the most important jobs in farmer controlled businesses and ye kept re-electing him. He wouldn't have gotten a seconder for a local advisory around here.

whelan2 · 22-05-2016 07:41PM

freedominacup wrote: »

We voted them in. A friend of mine with strong ambitions in the direction of the board said to me that a huge percentage of the board get appointed by their areas to the family seat in their late thirties/early forties and are duly re-elected every couple of years until compulsory retirement. At least one joker from a midland county is currently moving heaven and earth to get his arse in a plc board seat despite the fact he'll have to compulsorily retire from both before the year is out. With a clear conscience farmers in my area can point out fingers at most other areas within glanbia and say what are ye bitching about ye keep electing these knuckleheads. Hands up anyone from corbolixes area so that the rest of us can offer ye our thanks. This halfwit rose without trace to one of the most important jobs in farmer controlled businesses and ye kept re-electing him. He wouldn't have gotten a seconder for a local advisory around here.

If fairness we did oust his mate for a term,after the first glanbia vote, unfortunately he got back in to his comfortable seat when the other lad reached retirement age

freedominacup · 22-05-2016 07:46PM

whelan2 wrote: »

If fairness we did oust his mate for a term,after the first glanbia vote, then we couldnt find anyone to go against him when the lad in his place was overage.

Fair enough whelan but until this sort of activisim is the norm in all areas we'll have plenty of statements like the one in the examiner being issued. It can follow the law of unintended consequences at times. Imo the last board member from my own area was a competent and honest guy. He was removed by his own branch and while the guy who replaced him is able enough I'm not sure if he's as good. I will say one thing though. He's easy to get on the phone. The circumstances under which he got his seat would be fairly fresh in his mind. He takes the views of his electorate very seriously.

Farmer Ed · 22-05-2016 08:19PM

Don't know what structures you have for electing board members in Glanbia? But in Dg it's only members for the inner committee of 60 who are inturn elected by the general committee of 175, are allowed vote in a board election. And as far as I know it is then also broken down in to regions. So in effect only a very small select group get to elect the board.
The system is not too dissimilar to the system used to elect the Chinese leader. Even down to the number of 175 on the outer committee.
I've personally known board members I wouldn't trust to send shopping for a loaf of bread. I promise you I am not exaggerating but I know of board members of who people only smile with amusement or grin with discust at the idea of them being board members.

The general view by a lot of people is they are not too pushed as to who sits on the board as management are calling the shots anyway. In my experience sadly I have found that to be largely true. But I agree as farmers it is partly our own fault for allowing this situation to develop unchecked.

orm0nd · 23-05-2016 10:00AM

Dawggone wrote: »

Someone from Fonterra agrees with you.,.

and more than 1

http://www.agriland.ie/farming-news/what-average-price-can-dairy-farmers-expect-over-the-next-five-years/

I got lacerated on here last year for preaching "doom and gloom" :rolleyes:

there are none so blind as those who will not see.

jaymla627 · 23-05-2016 10:48AM

orm0nd wrote: »

and more than 1

http://www.agriland.ie/farming-news/what-average-price-can-dairy-farmers-expect-over-the-next-five-years/

I got lacerated on here last year for preaching "doom and gloom" :rolleyes:

there are none so blind as those who will not see.

5 years is a ludicrous time frame to be fair, it seems all these commentators are basing their predictions that dairy farms worldwide will keep on producing milk at a loss our barely break-even out of some kind of twisted loyalty/stubbornness to their cows....
Worldwide theirs going to be a serious contraction/loss of confidence among commodity dairy producers and a really sharp drop of in supply just a matter of when it will happen

kevthegaff · 23-05-2016 10:56AM

jaymla627 wrote: »

5 years is a ludicrous time frame to be fair, it seems all these commentators are basing their predictions that dairy farms worldwide will keep on producing milk at a loss our barely break-even out of some kind of twisted loyalty/stubbornness to their cows....
Worldwide theirs going to be a serious contraction/loss of confidence among commodity dairy producers and a really sharp drop of in supply just a matter of when it will happen

Weather will be a big factor, need a serious drought over in the states. Possibility 25c is the new 30 c for the next decade imo. Honestly could see a max exodus from dairying in this country if that is the new norm, we just don't have the scale, cheep labour or cheep feed

yosemitesam1 · 23-05-2016 11:07AM

jaymla627 wrote: »

5 years is a ludicrous time frame to be fair, it seems all these commentators are basing their predictions that dairy farms worldwide will keep on producing milk at a loss our barely break-even out of some kind of twisted loyalty/stubbornness to their cows....
Worldwide theirs going to be a serious contraction/loss of confidence among commodity dairy producers and a really sharp drop of in supply just a matter of when it will happen

Look at grain prices, into 4th year of low prices but yet everyone keeps planting and no sign of it improving. The idea that a recovery is on the way will keep the majority of lads milking for a few years yet

Milked out · 23-05-2016 11:13AM

I reckon it will depend on the us, that Insurance scheme or whatever it is they have i assume will look less attractive in a year or two as they will be buying in at lower prices however the oil and grain has totally lowered their cop. I dunno there is too much political interference that can happen as well as weather etc to predict what will happen

Farmer Ed · 23-05-2016 11:58AM

Anyone have any thoughts on how the latest news about hydrogen cars will play out on oil and milk price, long term?

alps · 23-05-2016 12:23PM

We're going back over old ground here, as the messages and predictions of the past play out...

Whatever the experts predict, you can take it that that will not happen. Just 6 months ago these experts were predicting price rises into Q3 and the long term fundementals etc looking good....It's all a game for them. They will stand up in Q3 and present with just the same authority as before that the new predictions are xyz...no mention of how wrong the predictions of the past were...

The price of commodity milk products can only improve if less milk is produced worldwide, or the world population is prepared to pay more for and consume more dairy products.

There is mention in the commentary above that as confidence falls so too will production. We have been spun this by the industry over the last 5 years in the build up to quota removal, basing our ability to thrive in a no quota environment on COPs that avoided land, labour and repayment costs, and thinking our little bit of expansion would have absolutely no effect on world market excesses.

The truth is, that we are one of the only milk producing nations on earth that pay down debt. This is a significant cash cost in a downturn. The Irish farming model is one of the most exposed in the world. Maybe the Irish farmer is not the most exposed, but the milk production from his farm is. Irish farms and farmers have options. Many farmers are nearing retirement age. Old age pension delivering €420 a week for a retired couple who can also rent out, or do a bit of hobby farming is a significant cushion. Many farmers who have not taken on debt will find it easy to remove themselves from dairying, but the higher leveraged operator with significant drawings requirements, will find things very uncomfortable.
Our competitors overseas are largely borrowed to levels we could never dream about. Lack of confidence plays no part on whether these farms continue to produce milk. They just have to. They cannot decide to stop. If the decision is made by a finance company or otherwise, the farm will have to continue producing milk, unless there is a more profitable outlet for the land. This is backed up best by the example of the "glasshouse syndrome" in the Netherlands where the banks effectively control the industry.

This is why I have always cautioned against the brovado mentality if the Irish industry, that we will "burn them off".

Irish Farmers may react a lot differently to what the "experts" think. Don't be surprised to see a reduction in Irish milk supply over the next few years.

However, for the time being we will just continue reacting to a consumer that does not want the product that we are currently producing, by producing more and more and more of it...

kowtow · 23-05-2016 12:29PM

yosemitesam1 wrote: »

Look at grain prices, into 4th year of low prices but yet everyone keeps planting and no sign of it improving. The idea that a recovery is on the way will keep the majority of lads milking for a few years yet

The way I see it there were three misjudgements from the industry in Ireland when planning for the end of quotas and Harvest 2020.

1. Volatility is one thing, but nobody observed that the first response to low prices when there is no quota limit is to sweat production from existing assets in order to spread fixed costs - provided a variable margin exists. Where on farm costing is largely a cash system, and land and labour can be hidden, Irish farmers wouldn't have a negative variable margin until the price of milk was hitting 15c I would have thought.

2. In other parts of the world a lower concentrate price is allowing the same defensive production response (a beggar thy neighbour response, if you will). Once the industry in Ireland had convinced itself that "grass was cheaper" everything but grass automatically became expensive and bad - and, typically enough, nobody thought to work out what would happen if nuts became cheaper than grass. Years ago I asked here whether anyone had considered what the price of an Irish acre was in bushels of Chigaco soy...

3. Our fellow European producers have liquid markets and often more intensive systems which might be better at spreading fixed costs than our own - cheap ration means more marginal milk from our competitors, and marginal milk is almost the only thing we produce.

I'm not totally convinced that the industry, certainly Irish politicians, understand what marginal milk is - they talk as if our unwanted production is something which people really want to buy if only [sanctions were lifted / the Chinese had more babies / the Algerians had the money] - and yet I doubt they used powder on their own breakfast cereal this morning.

Dawggone · 23-05-2016 12:46PM

yosemitesam1 wrote: »

Look at grain prices, into 4th year of low prices but yet everyone keeps planting and no sign of it improving. The idea that a recovery is on the way will keep the majority of lads milking for a few years yet

Technology is ahead of consumption. Less acres are producing more tons.
Same goes for dairy.

Kowtow wrote a brilliant post somewhere about Big Ag and the commodification of food. Half the world are obese while the other half starves..,

Sam Kade · 23-05-2016 01:05PM

kevthegaff wrote: »

Weather will be a big factor, need a serious drought over in the states. Possibility 25c is the new 30 c for the next decade imo. Honestly could see a max exodus from dairying in this country if that is the new norm, we just don't have the scale, cheep labour or cheep feed

I started milking again last year after 10 years out of dairying, fortunately I've an escape plan which I will implement next spring if needs be.

Dawggone · 23-05-2016 01:19PM

Sam Kade wrote: »

I started milking again last year after 10 years out of dairying, fortunately I've an escape plan which I will implement next spring if needs be.

Gwon tell.

kowtow · 23-05-2016 01:40PM

kevthegaff wrote: »

Possibility 25c is the new 30 c for the next decade imo.

If I really had to bet on a price outcome that is where my money would be, could just as easily be wrong though. It's also far from clear how big the cycle would be above and below 25.

Timmaay · 23-05-2016 02:18PM

kevthegaff wrote: »

jaymla627 wrote: »

5 years is a ludicrous time frame to be fair, it seems all these commentators are basing their predictions that dairy farms worldwide will keep on producing milk at a loss our barely break-even out of some kind of twisted loyalty/stubbornness to their cows....
Worldwide theirs going to be a serious contraction/loss of confidence among commodity dairy producers and a really sharp drop of in supply just a matter of when it will happen

Weather will be a big factor, need a serious drought over in the states. Possibility 25c is the new 30 c for the next decade imo. Honestly could see a max exodus from dairying in this country if that is the new norm, we just don't have the scale, cheep labour or cheep feed

For the likes of the single labour unit farmer with say 120/150 spring cows who make it out to grass feb most years, everything contracted out, bit of hired labour in the spring, and most importantly of all relatively lowly borrowed (say 1000/cow), what average milk price can they tolerate over the next say 5years? 25c might be just about doable if you can force your cost of production down to 20c/l, but is 20c/l anyway realistic for investment in the farm, or any sort of weather events?, very unlikely.

Waffletraktor · 23-05-2016 02:24PM

Timmaay wrote: »

For the likes of the single labour unit farmer with say 120/150 spring cows who make it out to grass feb most years, everything contracted out, bit of hired labour in the spring, and most importantly of all relatively lowly borrowed (say 1000/cow), what average milk price can they tolerate over the next say 5years? 25c might be just about doable if you can force your cost of production down to 20c/l, but is 20c/l anyway realistic for investment in the farm, or any sort of weather events?, very unlikely.

There's your lowest cost and there's what I term your sustainable lowest cost. 5-10 years time all the niggly neglected things like shed painting/fencing needing more than sticky plaster patching/replacing gates does catch up. Same with renting out land really, all theses things will come full circle.

Sam Kade · 23-05-2016 02:31PM

Dawggone wrote: »

Gwon tell.

No secret, I had the parlour and sheds in place and only borrowed a bit less than what the cows were worth and half paid back at the end of this year.

WheatenBriar · 23-05-2016 02:37PM

Timmaay wrote: »

For the likes of the single labour unit farmer with say 120/150 spring cows who make it out to grass feb most years, everything contracted out, bit of hired labour in the spring, and most importantly of all relatively lowly borrowed (say 1000/cow), what average milk price can they tolerate over the next say 5years? 25c might be just about doable if you can force your cost of production down to 20c/l, but is 20c/l anyway realistic for investment in the farm, or any sort of weather events?, very unlikely.

Unless slavery is your thing,at that level,a relief Milker every 2nd Sunday at least is vital at a cost of about 3000 euro's?
If your profit before paying yourself at say 700k litres is only going to be €35000 with no capacity for unforeseen expenditures except out of that 35k,then it's a damn poor return especially if you have to pay 7 or 8 k of it in tax
There'd be no room for a home loan,a car,or anything much lifestyle related really

Milk Price- Please read Mod note in post #1

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