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Milk Price- Please read Mod note in post #1

delaval

24/6/16

Recently we saw three posters close their accounts over disagreements in the dairy threads. While there is a lot of frustration and discontent with current milk prices and the processing industry, the recent tendency for dairy threads to become tit-for-tat arguments isn’t tolerable for those not involved.

All farming sectors go through difficult periods and during such times there may need to be changes in how threads are moderated.

Dairy threads are going to be more closely monitored and subject to stricter moderation for a while.

To that end we won’t tolerate baiting of posters, constantly reviving old arguments, posters with agendas or crusading for a cause.

Whether it’s discussion of the business or politics of the dairy or other sectors, we expect civility and tolerance toward each other and other opinions as diversity of opinion is needed as a source of different ways of looking at a situation.

"The aim of argument, or of discussion, should not be victory, but progress." - Joseph Joubert

Also please be aware that what you may post as light-hearted banter can be read totally differently by someone adversely affected by the subject matter and evoke a reaction you hadn’t intended.

The ‘Off-Season’ forum, and its anonymous posting, is available for anyone to chat about their situation.

The Mod Team.

I was wondering would it be a help if we posted our milk prices. I would hope that if someone is low that help could be given, on the other hand if high perhaps your tips could help us all.

I would suggest posting your processors base inc Vat for comparison
Post your Nett price for others to help or be helped
I think that solids should be included.
I suggest any seasonal/liquid contract price be excluded or seperated.

I feel that we as farmers do a lot of bitching about processor prices and rightly so IMO. I also feel that we should not worry about it as we can do nothing about base price but we certainly do something about it at farm level.

What do you all think?

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blackdog1

Farmer Ed wrote:

It is a sad reality all the same that farms that once we're able to support to families now can't even support one. Working two jobs is not. easy. Most people would consider a 39 hour week as enough.

Best farms I've visited have father and son working on the farm milking 120-150 cows and both wife's working.. better get those families started early.....

Farmer Ed

blackdog1 wrote: »

Best farms I've visited have father and son working on the farm milking 120-150 cows and both wife's working.. better get those families started early.....

I suppose what ever makes people happy. Probably the most financially secure farmer I know had all is borrowings paid off when he cashed in his wife's life insurance policy. Life's not a race, sometimes your ahead sometimes your not.

Farmer Ed

German ministers urge Merkel to support dairy farmers @agrilandIreland http://www.agriland.ie/farming-news/german-ministers-urge-merkel-support-dairy-farmers/

The history of Europe seems to have always been the the Germans usually get their way.

kowtow

Farmer Ed wrote: »

German ministers urge Merkel to support dairy farmers @agrilandIreland http://www.agriland.ie/farming-news/german-ministers-urge-merkel-support-dairy-farmers/

The history of Europe seems to have always been the the Germans usually get their way.

Hmm.. well not quite always...

Farmer Ed

kowtow wrote: »

Hmm.. well not quite always...

OK let me rephrase that. In the history of the EU. That said in Germany as elsewhere agricultural is no longer the dealbreaker it used to be. Very unpredictable times ahead I would think.

tanko

Is it true that the cost of production in Germany is 46c/litre?

Milked out

Could well be but when they publish those figures they like most bar us tend to include land and labour etc

Farmer Ed

Milked out wrote: »

Could well be but when they publish those figures they like most bar us tend to include land and labour etc

What is the average cost of production here if the cost of land, labour and loan repayments were taken in to account?

I doubt if the Germans are that much less efficient than us?

visatorro

tanko wrote: »

Is it true that the cost of production in Germany is 46c/litre?

For beer maybe!

pedigree 6

tanko wrote: »

Is it true that the cost of production in Germany is 46c/litre?

It's 40c/litre for liquid milk in this country.
According to the fmp group.

whelan2

pedigree 6 wrote: »

It's 40c/litre for liquid milk in this country.
According to the fmp group.

This goes back to the other thread, where do they get theor figures from. I did my profit monitor and granted my own labour and loans are not included but I dont know were the 40cpl came from , that would be double my costs(without my labour and loans.....)

Water John

Did not read the detail on the 40 cent, but it was the Liquid Milk Producers got it done by an accountancy. It included wages. An effort was made to be realistic Not pretend low figures.

alps

I've seen some German COP's done...

It includes 2 very important figures...own labour and opportunity cost on the land. If you are renting in land at €200/acre then your own land will.be costed in at this price. They also put in the amount of hous that are worked by the farmer and family labour and this time is assigned a charge equivalent to what it would cost you to replace this time. It is typically costed in at €15/hour.
The end result shows up a number of kpi's

Family entrepreneurial profit...ie the profit you make above your time and equity investment

It works out how much an hour you are actually earning.

Break even point 1....cost at which the farm can operate without paying self or family for lab ou r or land (survival)

Break even point 2.....cost where own labour, land investment is covered

I look at these 2 figures as
Break even 1......The cows get fed
Break even 2......The farmer gets fed...

In Ireland we continue to work with BEP 1 only.

Water John

And then every one else use that figure to hit us over the head with.
Clowns saying our costs were 19/20 cent per litre.

Farmer Ed

alps wrote: »

I've seen some German COP's done...

It includes 2 very important figures...own labour and opportunity cost on the land. If you are renting in land at €200/acre then your own land will.be costed in at this price. They also put in the amount of hous that are worked by the farmer and family labour and this time is assigned a charge equivalent to what it would cost you to replace this time. It is typically costed in at €15/hour.
The end result shows up a number of kpi's

Family entrepreneurial profit...ie the profit you make above your time and equity investment

It works out how much an hour you are actually earning.

Break even point 1....cost at which the farm can operate without paying self or family for lab ou r or land (survival)

Break even point 2.....cost where own labour, land investment is covered

I look at these 2 figures as
Break even 1......The cows get fed
Break even 2......The farmer gets fed...

In Ireland we continue to work with BEP 1 only.

Top post In Ireland we place no value on a farmers time. I go in and out to a lot of small businesses in another life and you don't just walk in and expect the boss to drop everything and look after you. Yet how many people still just drive in to a farmers yard and expect a farmer to drop everything

€15 an hour might seem like a lot but when you include overtime and weekend pay. It probably isn't too far of the mark as to what you could expect to earn working simular hours off farm. Also there is a reason why people get paid extra for working anti social hours.

rangler1

Farmer Ed wrote: »

Top post In Ireland we place no value on a farmers time. I go in and out to a lot of small businesses in another life and you don't just walk in and expect the boss to drop everything and look after you. Yet how many people still just drive in to a farmers yard and expect a farmer to drop everything

€15 an hour might seem like a lot but when you include overtime and weekend pay. It probably isn't too far of the mark as to what you could expect to earn working simular hours off farm. Also there is a reason why people get paid extra for working anti social hours.

No one owes us a living, watching BBC news at the moment, they were interviewing a policeman who said he used to be a sheep and dairy farmer.
People have to actively get out there and improve their lot if they're not happy....farming isn't compulsory,we have to accept farmers are going the way of the small shopkeepers of the last twenty years.....older generation only doing it for therapy.
Eu agri budget is static now and every euro that's going into the industry that is intervention, ie storing milk powder and selling at discounted prices, is diverting money away from farmers pockets, so insisting on flooding the market with milk is speeding up the demise of all farmers.
But then what else is new

rangler1

Water John wrote: »

And then every one else use that figure to hit us over the head with.
Clowns saying our costs were 19/20 cent per litre.

At least the intervention price is close to that, from what i remember it was only about 60% of the costs of beef production

Sam Kade

rangler1 wrote: »

No one owes us a living, watching BBC news at the moment, they were interviewing a policeman who said he used to be a sheep and dairy farmer.
People have to actively get out there and improve their lot if they're not happy....farming isn't compulsory,we have to accept farmers are going the way of the small shopkeepers of the last twenty years.....older generation only doing it for therapy.
Eu agri budget is static now and every euro that's going into the industry that is intervention, ie storing milk powder and selling at discounted prices, is diverting money away from farmers pockets, so insisting on flooding the market with milk is speeding up the demise of all farmers.
But then what else is new

All true, there will be a mass exodus of small/medium size farmers down the line.

WheatenBriar

Sam Kade wrote: »

All true, there will be a mass exodus of small/medium size farmers down the line.

If that's the case,I don't see the point in 100 cow farmers continuing
When I was in UCD many many moons ago one of my lecturers told me ,an Ag lecturer displaying an ignorance of his field,sub 100 weren't viable
Do you know what it is,it's all nonsense
Europe should have ignored the Ukraine too and we'd have been near a 30 base price building markets in Russia but the pc brigade interference has enhanced an unnecessary extra markets head ache

Farmer Ed

Sam Kade wrote: »

All true, there will be a mass exodus of small/medium size farmers down the line.

If that is true and Ranglers views ate widely shared in Ifa. Not much point in most farmers paying in to Ifa any longer. A bit like paying In to a pension fund when you know you will not live long enough to claim the pension.

rangler1

Farmer Ed wrote: »

If that is true and Ranglers views ate widely shared in Ifa. Not much point in most farmers paying in to Ifa any longer. A bit like paying In to a pension fund when you know you will not live long enough to claim the pension.

Its called evolution ( A gradual process in which something changes into a different and usually more complex or better form.) I suppose, stick your head in the sand and maybe it'll go away,
Your income has been protected for thirty years and i suppose in a sense it's like you went to sleep for those thirty years and woke up last year, look around you through those eyes and how many businesses are gone, pubs, post offices, farms taken over gravy train dairy farmers, even the sugar factory, you're going to suffer all that evolution in two years if you're lucky

Milked out

Sam Kade wrote: »

rangler1 wrote: »

No one owes us a living, watching BBC news at the moment, they were interviewing a policeman who said he used to be a sheep and dairy farmer.
People have to actively get out there and improve their lot if they're not happy....farming isn't compulsory,we have to accept farmers are going the way of the small shopkeepers of the last twenty years.....older generation only doing it for therapy.
Eu agri budget is static now and every euro that's going into the industry that is intervention, ie storing milk powder and selling at discounted prices, is diverting money away from farmers pockets, so insisting on flooding the market with milk is speeding up the demise of all farmers.
But then what else is new

All true, there will be a mass exodus of small/medium size farmers down the line.

I'd say this will happen even if milk price was at 30c currently. The demographic of the farmer population will.ensure it. Two lads at the end of their careers sold their herds last year within 3 miles of here as no successor. One at drystock the other contract rearing. There will be more to follow as with them the downturn was coincidental. Now the current downturn could accelerate it but may also delay it as these lads may not have the debt or family pressures any more so will wait for uplift in order to get best value for their stock

Farmer Ed

rangler1 wrote: »

Its called evolution I suppose, stick your head in the sand and maybe it'll go away,
Your income has been protected for thirty years and i suppose in a sense it's like you went to sleep for those thirty years and woke up last year, look around you through those eyes and how many businesses are gone, pubs, post offices, farms taken over gravy train dairy farmers, even the sugar factory, you're going to suffer all that evolution in two years if you're lucky

Rangler I'll be grand. There is still a few gravy trains running. Just a matter of getting on board one of them. I'd be open to advice from someone with experience.

Anyway back to milk price Should we be using the same method as the German's when calculating cost of production?

kowtow

Farmer Ed wrote:

Anyway back to milk price Should we be using the same method as the German's when calculating cost of production?

There's a teagasc 2011 report which I have linked previously on this thread giving all figures both methods for eu and world.

We're only competitive when land + labour is excluded. With them included we're quite far down the table. I never understood why this report had been written but was never quoted.

Buford T. Justice XIX

alps wrote: »

I've seen some German COP's done...

It includes 2 very important figures...own labour and opportunity cost on the land. If you are renting in land at €200/acre then your own land will.be costed in at this price. They also put in the amount of hous that are worked by the farmer and family labour and this time is assigned a charge equivalent to what it would cost you to replace this time. It is typically costed in at €15/hour.
The end result shows up a number of kpi's

Family entrepreneurial profit...ie the profit you make above your time and equity investment

It works out how much an hour you are actually earning.

Break even point 1....cost at which the farm can operate without paying self or family for lab ou r or land (survival)

Break even point 2.....cost where own labour, land investment is covered

I look at these 2 figures as
Break even 1......The cows get fed
Break even 2......The farmer gets fed...

In Ireland we continue to work with BEP 1 only.

Eating every day is overrated anyway...

Farmer Ed

Buford T. Justice V wrote: »

Eating every day is overrated anyway...

http://www.collective-evolution.com/2013/07/04/a-man-has-not-eaten-or-drank-any-liquids-for-70-years-science-examines-him/

atlantic mist

http://ec.europa.eu/agriculture/milk-market-observatory/pdf/eu-raw-milk-prices_en.pdf

peripheral countries most effected, 5c a liter average difference between uk and ireland...huge opportunities for our product in eu we cant enter almost ever market with a 4/5c price advantage why are we targeting oceanic region??

FMP report was laughable and bolstered my option of that accountancy firm and teagasc, the accountancy firm leaves out any single farm payment while teagasc leave out labor, opportunity cost of labor and opportunity cost of labor. neither are realistic figures last model teagasc farm i was on had husband wife two kids and a student working all full time, great eprofit until you took out 4 wages and then it didnt look like much of a business at all

Why cant they seem to do a full analysis to see what is the actual cost of a liter in ireland be interesting as id imagne were in between the us and nz system if all farmers were included and not the teagasc/fdc sample, we have animals who can react to grain and grass as opposed to only one of the two

i was reading the target 2020 committee is made up of all the ceo from our processing facilities....guess it was a processors great plan as opposed to a plan for primary producers

are fmp going to have to fill liquid quota after loosing tesco contract? how are strath goin to manage liquid milk contract lost to glanbia....was only a matter of time before they targeted their customer base thats how they roll bulldoze ye out of the way....but wait a year for dust to settle first avoiding bad pr

stanflt

Lads I was just doing my real cost of production last night- I'm lucky I've no borrowings except a repayment of 1200 per month that will be finished in 15 months time- I've no machinery finance either- I've 60 land rented in and I put 180 land charge on my own- including drawings and tax etc its 27pl

alps

stanflt wrote: »

Lads I was just doing my real cost of production last night- I'm lucky I've no borrowings except a repayment of 1200 per month that will be finished in 15 months time- I've no machinery finance either- I've 60 land rented in and I put 180 land charge on my own- including drawings and tax etc its 27pl

Great stuff Stan....that will give you a very clear assessment of how you are fixed with current milk prices. Doing that exercise also gets rid of the foolish argument we have at profit monitor meeting over systems and cow type and per litre profit...
I would suggest you are positioned at the lower end of the spectrum so well done....I feel most run from 28 to 34 while most of the Europeans are 39 to 42....

Would be great if more knew this figure for themselves, besides counting on teagasc and farm organisations to tell them if they are making money or not..

20silkcut

rangler1 wrote: »

Its called evolution ( A gradual process in which something changes into a different and usually more complex or better form.) I suppose, stick your head in the sand and maybe it'll go away,
Your income has been protected for thirty years and i suppose in a sense it's like you went to sleep for those thirty years and woke up last year, look around you through those eyes and how many businesses are gone, pubs, post offices, farms taken over gravy train dairy farmers, even the sugar factory, you're going to suffer all that evolution in two years if you're lucky

There was 100,000 dairy farmers in Ireland in the mid 70's.
There is less than 20,000 now. What you described has happened anyway regardless of quota.