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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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Water John

I did read that Farmer Ed said he had not signed the Dairygold MSA.
Not much use for anyone posting a rant, not having read the thread.

The Bellview and Mallow plants are in effect in geographical terms competing for the one milk supply. Both plants cannot run full at the same time.

Michael Keane forecast that two 7.5 ton/hr dryers would cater for all the expansion in the country. These two provide that without taking into account all the other plant put in by other processors.

Will both plants survive or will both run very inefficiently and for part of the year?

These facts impact directly on milk price.
Is the 2 cent, the loan is being offered for, being diverted into excess plant both in Glanbia and the 2 cent that Dairygold are off the mark to their suppliers?

rangler1

Farmer Ed wrote: »

Rangler if you had read previous posts you will know I didn't sign it. But farmers as a group are increasingly unhappy that they did.
Fact. Ifa heavely promoted MSA's. Fact 2 I have always been apposed to them..

Now considering Ifa are now saying that contracts are not such a good thing.youd imagine they might actually try and do something about it as people locked in to them are getting paid less for their milk than those of us who are free to move?
I believe they may need the services of some legal people to deal with the repercussions of the departure of your much admired former general secretary anyway.

They're often brought to court, nothing they can do about that. but they don't initiate legal action if they can

whelan2

JD115m wrote: »

The funny thing is that milk prices haven't come down in the shop even though there is such an oversupply. The farmer takes the hit while at the moment Glanbia is making more money than ever and encouraged everybody to increase supply just to feed Belview. Know a lorry driver who said that there was delays of 3 hrs there and it hadn't even ran at full supply. That's EFFICIENT

Only a very small % goes to milk in the shops, rest mainly gets made into milk powder

rangler1

kowtow wrote: »

What I am really surprised at, given the serious & restrictive & sometimes enduring nature of some of the MSA's - is that co-ops didn't pay a contribution (250 perhaps) from funds to every producer in order to ensure that they received independent legal advice before signing.

Nowadays that is a pretty standard step in many serious contracts, including those which terminate employment or restrict future employment, and it would have helped the processor in making sure they had a rock solid agreement.

That is the sort of thing the IFA and others should have been arguing to put in place at the time rather than waving from the sidelines.

Are you for real and maybe coop organise a taxi into town for them.....Dairy commitee would have enough going on at home not to be worrying about whose going to pay farmers to get advice.
Poor ould drystock farmers get shag all

kowtow

rangler1 wrote:

Are you for real and maybe coop organise a taxi into town for them.....Dairy commitee would have enough going on at home not to be worrying about whose going to pay farmers to get advice. Poor ould drystock farmers get shag all

If that sort of glib, cavalier approach to something as serious as MSAs is in any way typical of the IFA then they are not just useless, but a danger to those they represent.

Water John

I think you really don't get it Rangler.
I have not much use going to a company meeting if I leave my head stuck at home on the farm. If I didn't have that basic competence I should not be going and the same applies to IFA reps.

I have seen IFA reps support strongly for farmers to sign long term MSA's. I have seen IFA reps stand up and speak strongly against independent milk testing, even though it was and is IFA national policy.
That's what undermines farmers and why they now are getting a pathetic milk price. Those very people who should be organising them have betrayed them.

rangler1

kowtow wrote: »

If that sort of glib, cavalier approach to something as serious as MSAs is in any way typical of the IFA then they are not just useless, but a danger to those they represent.

I have always told farmers to get independent advice, everyone tries to get the best deal but it's never utopia, so the farmer has to take responsibility if he decides to agree and not throw blame round like snuff at a wake.
I was involved in the road deal and wind farm and never saw a farmer that wasn't capable of looking after themselves or forced to sign anything.
Doesn't matter to me what the issue is, I know all farmers were told to get advice, i don't think you're as helpless as you're making yourselves out to be

Farmer Ed

Water John wrote: »

I did read that Farmer Ed said he had not signed the Dairygold MSA.
Not much use for anyone posting a rant, not having read the thread.

The Bellview and Mallow plants are in effect in geographical terms competing for the one milk supply. Both plants cannot run full at the same time.

Michael Keane forecast that two 7.5 ton/hr dryers would cater for all the expansion in the country. These two provide that without taking into account all the other plant put in by other processors.

Will both plants survive or will both run very inefficiently and for part of the year?

These facts impact directly on milk price.
Is the 2 cent, the loan is being offered for, being diverted into excess plant both in Glanbia and the 2 cent that Dairygold are off the mark to their suppliers?

John I believe this is the report you are talking about. Id invite anyone to read it and compare it to how much was actually spent. Either Keane got it badly wrong or our Co Ops went on a mad spending spree using farmers as collateral with the banks,
http://icmsa.ie/wp-content/uploads/2011/09/Costs-in-Milk-Processing-and-Transport-to-2020.pdf

Water John

So the choice was, spending about €70M at a brownfield site. Instead we have spent €83.5M in Mallow and €155M, I think in Bellview.
That's €168.5M wasted, basically.

pedigree 6

rangler1 wrote: »

I have always told farmers to get independent advice, everyone tries to get the best deal but it's never utopia, so the farmer has to take responsibility if he decides to agree and not throw blame round like snuff at a wake.
I was involved in the road deal and wind farm and never saw a farmer that wasn't capable of looking after themselves or forced to sign anything.
Doesn't matter to me what the issue is, I know all farmers were told to get advice, i don't think you're as helpless as you're making yourselves out to be

The IFA shouldn't really give advice. They are their own worst enemy at times when that advice turns out to be wrong or suspect in the future.
Don't want to turn this into an IFA bashing post but case being Catherine lascurettes appearing in a bank ad talking about future milk prices.
That shouldn't happen. I know the IFA probably got paid for the ad.
But still should not be favouring one bank over another and while not telling farmers to borrow the whole ad gave the impression that farmers should borrow off AIB for their dairy enterprise.

Another one is the minister for agriculture promoting glanbia's new bond loan scheme. If what some poster have said is true the bond holders who lend the money can exchange the bonds for the shares at any time if they wish.
Thus reducing the farmers shares in the plc even more.
Why is the minister promoting this?

Both the ifa and the minister should stay independent in these things.
This country is way too small at times.

[Deleted User]

kowtow wrote: »

Well actually they are only letting farmers borrow half of it to help pay the fert bills. The other half they are just keeping, for working capital (i.e. salaries).

More importantly, should the value of Glanbia shares (i.e. plc shares) suddenly rocket, the lenders will be able to excersise the conversion and take the shares instead of the money. This will save money as they won't need to pay consultants to help them give them back to the farmers.

Is that all legal or is the farmer accepting the loan saying, yep grand fire away. Or is it as per usual in legal matters the one with the better brief(more money!!) wins.
Little miss chief got very upset when telling the 2 firms she is working for she would need another year and they really didn't like that. The big boss has an accountancy and legal firm on a retainer for stuff and very nicely got one of the main men to look at her contract and wrote them a letter that quickly got them to agree to the compromise she had tabled.

Water John

Sorry Waffle, I need that in plainer english. I must have a low IQ.

kevthegaff

cson wrote:

Remember; our most successful football under AW was primarily counter attacking relying on quick transitions via the guile of Pires/Bergkamp and the pace of Henry/Ljungberg.

Bottom line, farmers did make a mistake signing msa but from fear of a 1 cent penalty, also price/future looked good at the time. I disagreed at the time myself but as I'm not a supplier for the big two it was irrelevant for me.. The more I read about the IFA,Minister of Ag you'd wonder is even our representatives on our side... in fairness farmer ed/John are going against the grain so to speak, maybe it's what we need on our boards.

[Deleted User]

Water John wrote: »

Sorry Waffle, I need that in plainer english. I must have a low IQ.

An online thesaurus is normally faster.

jaymla627

kevthegaff wrote: »

Bottom line, farmers did make a mistake signing msa but from fear of a 1 cent penalty, also price/future looked good at the time. I disagreed at the time myself but as I'm not a supplier for the big two it was irrelevant for me.. The more I read about the IFA,Minister of Ag you'd wonder is even our representatives on our side... in fairness farmer ed/John are going against the grain so to speak, maybe it's what we need on our boards.

Glanbia literally had us by the balls when i eventually relented in the spring of 2015, tried switching processor for the previous 9 months before that but a gentlemans agreement ment my only other option to switch wouldnt entertain us, and kept fobbing us off despite all the phonecalls and different people i was passed around too.....
It was my superlevy fine that ment i had to sign i simply wasnt in a position to pay it off at the time, so had to spread it out for the four years, which ment of course i had to sign a msa, was a masterstroke on glanbias part getting this scheme implemented through them, it couldnt of been that difficult that the revenue service where tasked with collecting this money instead of making farmers basically sign away their production rights, this is where farm organisations like the ifa let lads down

Farmer Ed

Water John wrote: »

So the choice was, spending about €70M at a brownfield site. Instead we have spent €83.5M in Mallow and €155M, I think in Bellview.
That's €168.5M wasted, basically.

If Keane was right a 15ton an hour plant on a green field site could have been built for 70m. the mallow plant must have cost a lot more that 83m. First of all they had to buy the site back from reox. Can't remember the figure again? Was it something like 40m?

Farmer Ed

kevthegaff wrote: »

Bottom line, farmers did make a mistake signing msa but from fear of a 1 cent penalty, also price/future looked good at the time. I disagreed at the time myself but as I'm not a supplier for the big two it was irrelevant for me.. The more I read about the IFA,Minister of Ag you'd wonder is even our representatives on our side... in fairness farmer ed/John are going against the grain so to speak, maybe it's what we need on our boards.

Ah ken your way too kind. And here was me thinking I'm very conservative. I remember 3 years ago being told I wore a tinfoil hat because I didn't agree with those contracts. Tinfoil hat or no tinfoil hat. Not many people still think they are good for farmers 3 years on.

kowtow

Waffletraktor wrote:

Is that all legal or is the farmer accepting the loan saying, yep grand fire away. Or is it as per usual in legal matters the one with the better brief(more money!!) wins. Little miss chief got very upset when telling the 2 firms she is working for she would need another year and they really didn't like that. The big boss has an accountancy and legal firm on a retainer for stuff and very nicely got one of the main men to look at her contract and wrote them a letter that quickly got them to agree to the compromise she had tabled.

I can't find a term sheet or admission document for the bonds in any of the usual market feeds.. not unusual at all since the bonds themselves are not listed and are issued by an unlisted entity. Having said that I didn't look very hard and I might have missed one.

So all I have to go on for the time being is the second hand reporting from the non financial press which is not ideal.

But in principle there is nothing illegal or out of the ordinary in such a bond issue provided that it is permissible under the articles of the coop, and doesn't impinge on any existing banking covenant or - for example - the various inter company agreements with GIIL etc.

I would have thought the full details of the bond need to be disclosed in the coop accounts but it evidently doesn't need EGM approval as they don't seem to have sought it.

It's perfectly legal to use part of the proceeds for working capital although to my mind 45% is a big part (if that figure is correct as reported) and if I was a coop shareholder I'd be asking why things were suddenly so tight.

Equally many suppliers might see the convert ability (exchangability) for plc shares as a high price to pay but to some extent that depends on the strike price of the conversion.

If the figure reported is correct Is it really working capital or is there a pressing need for spare liquidity for a corporate action, for example? If there was a corporate action on the table would members - upon seeing it - approve parting with the plc shares to fund it or would management like to have the funds in hand first? All pure speculation but if it were me being asked I'd be slow to sell a call on a listed stock to fund an unspecified a war chest....

Basically I wouldn't doubt the legality for a moment but I'd be asking hard questions about the rationale and the terms. Good management will expect nothing less.

The full unvarnished details of the bond issue might put everyone's minds at rest.

atlantic mist

Coop organising taxi's well its not far off the truth....if memory serves me right they organise buses to bring us to share spin out..and home again after...were all about economies of scale in the dairy business:)

how many suppliers/coop member received any information on loan before pr campaign, im finding it all out from media outlets:mad:

only newly joined member, do we not vote on large financial issues like this or does board have complete decision making power, have not received a thing since joined

Farmer Ed

kowtow wrote: »

I have often heard similar said, but I have also been told by co-ops that this is not the case - do you happen to have a link to whatever law / regulation obliges them? Would be very interested...

OK I just had a look at Dairygolds rule book rule 79. Big load of jargon but basically they are obliged to by all milk from members grazing cows in their catchment area as long as they stay in the business of processing milk. So in effect as said here by numerous people. There was nothing in the contract for the farmer that he wasn't entitled to anyway. Even the bonus was introduced retrospectively and will become the subject of another legal challenge in the district court later this year as expelled members become exempt from the binding rules of arbitration. More negative pr being brought upon themselves. For a crowd that spend so much on pr they seem to have a right knack at making a right balls of it.

Farmer Ed

atlantic mist wrote: »

Coop organising taxi's well its not far off the truth....if memory serves me right they organise buses to bring us to share spin out..and home again after...were all about economies of scale in the dairy business:)

how many suppliers/coop member received any information on loan before pr campaign, im finding it all out from media outlets:mad:

only newly joined member, do we not vote on large financial issues like this or does board have complete decision making power, have not received a thing since joined

I'm afraid under co op law. The terminology they use is "the board from time to time can decide" to do what ever they dam well feel like. That's why it is so disappointing to see yet another minister sucking up to the big co ops. In truth co op law is in desperate need of reform. They can pretty much do what ever they like and get away with it.

Water John

Kowtow, this bond issue is above my economic/banking norm.
I would have thought though that an EGM would have to be had. Does simply Board approval cover all financial transactions bar sale?

Sorry Ed, getting confused yes Keane's figure was for a lot less for a brownfield site. Makes the waste a lot worse.
I think you can put any figure you like on the true Mallow cost. You'll never get the full figures on it any way.
According to Irish Examiner today Dairygold claim to have spent €200M in 2 years on expansion!! Either that's a misprint or Pat Keating, Dairygold's PR mouthpiece, is totally losing the run of himself.
Or, shock horror, its true.

kowtow

Water John wrote:

Kowtow, this bond issue is above my economic/banking norm. I would have thought though that an EGM would have to be had. Does simply Board approval cover all financial transactions bar sale?

EGM usually when shareholder voting power could be diluted... otherwise depends on articles if not listed... which I suppose are in the rule book. I don't supply a coop so don't have an example to work from.

But generally a board can hock any asset as it sees fit.

Why doesn't someone phone the switchboard and ask them what they need 45 million for all of a sudden?

Farmer Ed

Water John wrote: »

Kowtow, this bond issue is above my economic/banking norm.
I would have thought though that an EGM would have to be had. Does simply Board approval cover all financial transactions bar sale?

Sorry Ed, getting confused yes Keane's figure was for a lot less for a brownfield site. Makes the waste a lot worse.
I think you can put any figure you like on the true Mallow cost. You'll never get the full figures on it any way.
According to Irish Examiner today Dairygold claim to have spent €200M in 2 years on expansion!! Either that's a misprint or Pat Keating, Dairygold's PR mouthpiece, is totally losing the run of himself.
Or, shock horror, its true.

IMO a big part of the problem is that anything you read about Dairygold comes from their pr constant Pat Keating. Now as Pat operates out of a basement office in Dublin. With the best will in the world you'd be always worried that stuff could get lost in translation. why a business needs a Pr company to communicate with the owners of the business is something I can never be at ease with.

Water John

Yes, the Chairman or CEO did not inform the AGM of FBD Coop what they were proposing to do the following week. Basically moving from owning a large share of an Insurance business to becoming hoteliers.
Seems to be the form.

mahoney_j

jaymla627 wrote: »

Glanbia literally had us by the balls when i eventually relented in the spring of 2015, tried switching processor for the previous 9 months before that but a gentlemans agreement ment my only other option to switch wouldnt entertain us, and kept fobbing us off despite all the phonecalls and different people i was passed around too.....
It was my superlevy fine that ment i had to sign i simply wasnt in a position to pay it off at the time, so had to spread it out for the four years, which ment of course i had to sign a msa, was a masterstroke on glanbias part getting this scheme implemented through them, it couldnt of been that difficult that the revenue service where tasked with collecting this money instead of making farmers basically sign away their production rights, this is where farm organisations like the ifa let lads down

Don't know ur location jay but u had at least 3 options if u wanted out ,Arrabawn ,dairygold and strathroy for 3 they took in and list suppliers .as for not been able to move because of levy ,incorrect .if u moved levy moved with u .i know this from the Arrabawn /dsirygold/Glanbia shenigans

Farmer Ed

mahoney_j wrote: »

Don't know ur location jay but u had at least 3 options if u wanted out ,Arrabawn ,dairygold and strathroy for 3 they took in and list suppliers .as for not been able to move because of levy ,incorrect .if u moved levy moved with u .i know this from the Arrabawn /dsirygold/Glanbia shenigans

To be fair strathroy would depend on location and Arrabawn didn't take anyone until May last year. Dairygold would not take a Glanbia supplier and even if they did you'd be only jumping from the fryingpan to the fire and possibly back again if Glanbia take them over. Please don't correct me for calling them Glanbia. As far as I can see. Gill is just a co op front for a plc. Worst of both worlds for the farmer. He takes all the processing risks and the PLC take all the profit. And yes they managed to get farmers to vote for that by an overwhelming majority.

kevthegaff

kowtow wrote:

Why doesn't someone phone the switchboard and ask them what they need 45 million for all of a sudden?

Maybe to prop up price with farmers money, isn't that what is happening the last few years, big worry is the likes of Glanbia have gotten too big to really give a s""t about the farmers.

kevthegaff

Was talking to a friend who left for glanbia last year, he was saying glanbia are nearly top of milk league while arra were bottom. Jes us couldn't listen to the nonsense any longer, cut him short. 1 month out of 12 and he's blowing like mad. Lot of the "Big Fellas" around here moved. Funny thing the more profitable enterprises seemed to stay

whelan2

Spoke with a farmer yesterday who didnt sign the msa and moved to strathroy last year, he said the amount of pressure lifted off him mentally is unreal and a better milk price to boot