2015 The year family farming is finished??

Viewtodiefor

Just throwing this one out there to get peoples views on it! With the abolition of quotas and it's cap on production hence artificially keeping some control over European milk prices, will 2015 be the year that the avg family dairy farm of say 30 to 40 hectares be finally finished as they can no longer compete with the bigger guys who just get bigger! And the economics of the farm business just become too tight because of the smaller scale. Anyone got any thoughts on this?

dar31

its not the small lads that will be forced to get out
but the inefficient, no matter what size they are.

GERMAN ROCKS

i dont know why they dont just keep the quota. i think its a lot better to cap the amount produced and keep a steady 35c a litre that we are getting now. also means a lot less work this way for the same profit

Viewtodiefor

GERMAN ROCKS wrote: »

i dont know why they dont just keep the quota. i think its a lot better to cap the amount produced and keep a steady 35c a litre that we are getting now. also means a lot less work this way for the same profit

I like your thinking there! Heard a rumour that the Germans and France are having second thoughts on letting the quota go! And as we know what they want they get!

Kevin1150

its definitely going to be a numbers game post 2015. the large farms will be in a position to increase production and unfortunately i feel the smaller farm will be squeezed out.:(

bob charles

Im of the opposite view, the family farm will always survive, it has so for hundreds of years. I look at guys milking 50 - 80 cow herds single handily with a bit of family help and they know their business inside out and are seriously profitable. Its the big boys that are in danger. I see one almight bang coming in farming as the finance just isnt in the industry as a whole. Wait until either a big meat processor, grain merchant has to shut its doors leaving debts outstanding. As has being famously said "Its only when the tide goes out do you learn who has being swimming naked"

Viewtodiefor

bob charles wrote: »

Im of the opposite view, the family farm will always survive, it has so for hundreds of years. I look at guys milking 50 - 80 cow herds single handily with a bit of family help and they know their business inside out and are seriously profitable. Its the big boys that are in danger. I see one almight bang coming in farming as the finance just isnt in the industry as a whole. Wait until either a big meat processor, grain merchant has to shut its doors leaving debts outstanding. As has being famously said "Its only when the tide goes out do you learn who has being swimming naked"

There definitely are some really profitable farms of so called small scale. And profitable farming has to be the focus for anyone no matter what size they are! My point is will they be able to expand in the post quota years in order to hold onto the profitability that they have now from which they make a living as prices will inevitably be squeezed?

Cran

GERMAN ROCKS wrote: »

i dont know why they dont just keep the quota. i think its a lot better to cap the amount produced and keep a steady 35c a litre that we are getting now. also means a lot less work this way for the same profit

Why should dairy get any special treatment than any other agricultural sector without quotas?

GERMAN ROCKS

Cran wrote: »

Why should dairy get any special treatment than any other agricultural sector without quotas?

there should be a quoata on grain aswell in my opinion. down here in cork its almost impossible to rent land. all the grain men are paying serious bucks per acre. i rang about land for rent last week and was told it was making €250 an acre. asbsolutly crazy. theres lads around here growing a 1000 acres of barley. that is just pure greed. they may only own 200 acres but rent a further 800. and the only reason they need to work this big acreage is to pay off there billsof there big fancy machinery.

valtra2

oh my god, the sooner everyone realises that farming is a bussines the better, you go in run it as efficently as you can make as much as you can and either get bigger or invest in something for your retirement and then either sell or pass it on, no other bussines i know want to stay small, that is just my opinion

mattthetrasher

the family farm will survive better than the big units simply because of overheads if your paying for staff. renting land, paying off large repayments on buildings and maybe contract rearing .the figures from the greenfield farm show us how lean the margins are the family farm is more insulated.and will ride the storm. whatever enterprise you are in,knocking dairy farmers or tillage farmers doesnt get anyone anywhere whats the point

whelan1

should be ok so , kids are getting older:D

mattthetrasher

valtra2 wrote: »

oh my god, the sooner everyone realises that farming is a bussines the better, you go in run it as efficently as you can make as much as you can and either get bigger or invest in something for your retirement and then either sell or pass it on, no other bussines i know want to stay small, that is just my opinion

it is all about efficency but scale does not mean efficency,we also need to be able to survive bad prices saying oh you want to stay small as if its backward.i say to each his own.

mattthetrasher

whelan1 wrote: »

should be ok so , kids are getting older:D

well whelan they the most important thing at the end of the day.my 18 mth old is in hospital recovering from meningitis it puts it all in perspective

lefthooker

2015 - the abolition of quotas???
I've been to enough meetings with Glanbia reps in attendance and not one of them has definitively said quotas, by one name or another, will be gone and no production restrictions. Its only those with no connection to the processors who talk about no restrictions.
There's damn all wrong with the system in place at the moment. Why would producers want to increase numbers and workload to get a lower price than we currently get

GERMAN ROCKS

lefthooker wrote: »

There's damn all wrong with the system in place at the moment. Why would producers want to increase numbers and workload to get a lower price than we currently get

thats what i think too, 35 cent a litre for milk is very good if it were able to remain at that price with the current system

Agri contractor

GERMAN ROCKS wrote: »

there should be a quoata on grain aswell in my opinion. down here in cork its almost impossible to rent land. all the grain men are paying serious bucks per acre. i rang about land for rent last week and was told it was making €250 an acre. asbsolutly crazy. theres lads around here growing a 1000 acres of barley. that is just pure greed. they may only own 200 acres but rent a further 800. and the only reason they need to work this big acreage is to pay off there billsof there big fancy machinery.

At 250 an acre I can't see anyone making money out this. Going by the Teagasc figures it takes 2.7ton of barley on your own ground to brake even. I would rater be looking over the ditch at the fellow working it at 250 an acre, I just can't see the logic in this.

dar31

mattthetrasher wrote: »

well whelan they the most important thing at the end of the day.my 18 mth old is in hospital recovering from meningitis it puts it all in perspective

hope jnr gets better soon.
nothing worse than living in a hospital for a while.

dar31

lefthooker wrote: »

2015 - the abolition of quotas???
I've been to enough meetings with Glanbia reps in attendance and not one of them has definitively said quotas, by one name or another, will be gone and no production restrictions. Its only those with no connection to the processors who talk about no restrictions.
There's damn all wrong with the system in place at the moment. Why would producers want to increase numbers and workload to get a lower price than we currently get

quotas or not. what ever way it ends up you will still have to buy the right to produce.

keep going

it looks like the one thing we are learning from those demo farms is its bloody hard to make money in milk from paid labour and large borrowings no matter what the scale .the family farm 30 years ago was 25 to 30 cows with some bullocks and grain and pigs.the family farm 60 years ago was 5 to 8 cows pigs grain and potatoes.the family farm 160 years ago was 1 cow if you were lucky and potatoes.scale has always changed but familys will always be involved.its funny the big farmers 30+years ago are always the big ones now

Viewtodiefor

It is hard to believe that come 2015 all producers will be able to supply as much milk as they like without any restriction, i think there will be some sort of a cap whatever that maybe, i do not know. Dairy farmers are not looking for any special attention than any others regarding quota etc this is the hand they have been delt for the last 30 yrs. There were many farmers who could have milked cows but saw it as too hard a job so took the easy route, thats their choice. We now have a situation that every tom,dick and harry wants to go milking cows as they see its the in thing to do! how many will be there in 5 r ten yrs time? dairying isnt for everyone! The problem being will they have pushed out the guy who started with 150000lts quota in 1990 n bought n built it up to maybe 400000 over the years only to see his margins pulled from under him in 2015? Lets pray the chinese keep getting richer!!!!!! or there will be a huge fallout this side the atlantic!

lefthooker

Viewtodiefor wrote: »

It is hard to believe that come 2015 all producers will be able to supply as much milk as they like without any restriction, i think there will be some sort of a cap whatever that maybe, i do not know. Dairy farmers are not looking for any special attention than any others regarding quota etc this is the hand they have been delt for the last 30 yrs. There were many farmers who could have milked cows but saw it as too hard a job so took the easy route, thats their choice. We now have a situation that every tom,dick and harry wants to go milking cows as they see its the in thing to do! how many will be there in 5 r ten yrs time? dairying isnt for everyone! The problem being will they have pushed out the guy who started with 150000lts quota in 1990 n bought n built it up to maybe 400000 over the years only to see his margins pulled from under him in 2015? Lets pray the chinese keep getting richer!!!!!! or there will be a huge fallout this side the atlantic!

Good post well said. The bit that gets to me is that the boss man got back into dairying in the later 80's after being out for a few years and started off with a small quota which he built up steadily whenever opportunity arose. I've taken over the farm recently and for the life of me I can't get a meaningful bit of quota no matter what way I apply, although I tick the boxes for priority in most categories. With the returns from milking currently good and a clatter of new guys eyeing up the rewards any new entrant gets c. 45000gls straight off. I only see this as leaving more "smaller" producers in whats already a very competitive and volitile market. Why not give the opportunity to "smaller" established guys with the facilities and base to expand first if they so wish

whelan1

mattthetrasher wrote: »

well whelan they the most important thing at the end of the day.my 18 mth old is in hospital recovering from meningitis it puts it all in perspective

yup, i was there once, nothing else matters at that stage, one of the scariest experiences of my life, hope your child gets better soon

irishh_bob

Viewtodiefor wrote: »

Just throwing this one out there to get peoples views on it! With the abolition of quotas and it's cap on production hence artificially keeping some control over European milk prices, will 2015 be the year that the avg family dairy farm of say 30 to 40 hectares be finally finished as they can no longer compete with the bigger guys who just get bigger! And the economics of the farm business just become too tight because of the smaller scale. Anyone got any thoughts on this?

nothing is ever as bad as some like to predict and besides , if prices are as good in 2015 as they are in 2012 , i cant see how things will be worse than they were in 2000 - 2010 when most family farms managed to stay afloat

John_F

lefthooker wrote: »

2015 - the abolition of quotas???
I've been to enough meetings with Glanbia reps in attendance and not one of them has definitively said quotas, by one name or another, will be gone and no production restrictions. Its only those with no connection to the processors who talk about no restrictions.
There's damn all wrong with the system in place at the moment. Why would producers want to increase numbers and workload to get a lower price than we currently get[/B]

With regard to the thread... the family farm will be the most able to grow.. always has, nobody can take away the skills and know how that these family farms have, the question is - is the next generation coming to replace the older crowd, and will the land around the family farm be available.

With regard to the point made above - i dont see how an increase in irish milk would greatly affect price, we are trading on a world market, the largest producers are shown below in 2009 and ireland is no where near the top that would affect world supply . . in fact we are 26th in the world as show here



more information here


http://www.fao.org/ag/againfo/themes/en/dairy/documents/docs/world-milk-production.pdf

also an interesting chart you can play around with here

I cant seem to find a figure on how much of the world trade in dairy is irish but im sure it is small! There will be highs and lows in milk price in the years ahead, but it will have little or nothing to do with irish farmers increasing production, for what we put on the world market compared to all of the EU, the USA or the AustrailAsia / Ocenia nations it would be a drop in the ocean.

The increase in milk in Ireland is going to be in the hands of the processor, if they wont increase their capacity then the milk just wont find a home. Fortunately some processors have given indicators as to how much extra capacity they have now, and how much they may need in the future.

In my view (I'm in my 20's so maybe a bit naive) Quotas are the worst thing that came into irish agriculture, they came in at a time when banks were not giving out credit too easy, when interest rates were sky high. it is now close on 30 years since their introduction and if you compare farming back then to now it is worlds apart in terms of efficiency, knowledge, cows etc. It suited the other nations ok (germans, dutch etc) as they had mostly built up production (they cant expand much more post 2015) had the setups etc. now they are fearing the worst as their safety net is going from their low margin enterprises. Quotas stopped young farmers expanding, put an halt on a young persons drive, ambition etc. any farmer that wanted to expand firstly had to buy quota, and that was not cheap. Our situation - father started off the year just before the quotas came in, didn't have the numbers (25 cows) built up so got little quota, father bought quota here there and everywhere, milk quota appeal tribunals, leasing etc etc, now at 100 cows. not looking for pity, but we could have built up numbers alot easier and money could have been put to better use than buying rights to produce a product that today is produced in alot different view than in the 1980's. sure there would have been poor milk price years, but this would have sorted the men from the boys and instead of having very very inefficient farms with the same system of farming being carried out in the 80's, we would have seen more land mobility, more efficient farming. I really do believe quotas just halted irish agriculture for two generations. the sooner they go the better and leave the restriction on the market being able to cope and follow the money.

Now running to get my tin hat from the guys who reckon that quotas are the best thing that existed (guys that had the numbers built up and hadn't the land to expand)... but remember the % of irish milk that is traded on the world market.. and in turn its affect on supply and demand.... :cool:

https://www.youtube.com/watch?v=hvJiZHq3xMA

https://www.youtube.com/watch?v=eA6iBKc0O0E

and not forgetting this http://youtu.be/cUYj1a2U-xs

rancher

lefthooker wrote: »

2015 - the abolition of quotas???
I've been to enough meetings with Glanbia reps in attendance and not one of them has definitively said quotas, by one name or another, will be gone and no production restrictions. Its only those with no connection to the processors who talk about no restrictions.
There's damn all wrong with the system in place at the moment. Why would producers want to increase numbers and workload to get a lower price than we currently get

If the processors restrict suppliers, another processor will come in and take up the slack, whats the chinese doing here today if they're not looking for food sources, after all they have been stopped from buying land in New Zealand this week. I wouldn't be surprised if the chinese set up a plant in England or Ireland or started buying land, such is their hunger for food products

Viewtodiefor

Interesting views guys! Looks like the majority view is that farm life will go on for the foreseeable future and let's hope that this decade is a sustainable boom for farming god knows most of us need it!

JohnBoy

I reckon there's three factors that determine a dairy farm's ability to cope with price volatility.

efficiency, low debt and cash reserves.

None of those concepts are beyond family farm's reach

if you have low debt and are efficient then you should be able to put money away in the good years to help in the bad.

Farmer Pudsey

Have never been involved in the dairy industry however was involved in a discussion with a couple of dairy farmers it was thaught that the maximun no of cows that one man can manage is 80. After that you are not able to milk them yourself, so you do not see them every day at 80 cows a very efficient farmer (milking 1350-1400 gallons ) averageing 500,000 litres @30 cent a litre is turning over 150,000 euro selling 50 calves @125 euro and 18 cull cows @ 500 euro each will have a turn over of 165,000 euro.

So is this sustainable it is however the inefficent fellow or the farmer below 50 cows will get squeezed.His survival will be dependant on whether he has a parttime job.If you are milking cows it is very hard havind tp work as well. It will also depend on milk price and your ability to carry on in the bad times (25 c/l) and save in the good times (35c/l).

mattthetrasher

thats spot on johnboy

F.D

Farmer Pudsey wrote: »

Have never been involved in the dairy industry however was involved in a discussion with a couple of dairy farmers it was thaught that the maximun no of cows that one man can manage is 80. After that you are not able to milk them yourself, so you do not see them every day at 80 cows a very efficient farmer (milking 1350-1400 gallons ) averageing 500,000 litres @30 cent a litre is turning over 150,000 euro selling 50 calves @125 euro and 18 cull cows @ 500 euro each will have a turn over of 165,000 euro.

So is this sustainable it is however the inefficent fellow or the farmer below 50 cows will get squeezed.His survival will be dependant on whether he has a parttime job.If you are milking cows it is very hard havind tp work as well. It will also depend on milk price and your ability to carry on in the bad times (25 c/l) and save in the good times (35c/l).

So how much out of the 165,000 would the farmer be putting in his arse pocket after costs, 30-50k?
I have been talking to a few dairy farmers some are going to expand, many are happy with the size they are, dont have huge depts, nice managable size no interest in getting any bigger
I think its hillarious that the creamerys arn't given any clarity of what there position will be in 2015, and worse dairy farmers are letting them get away with it,
Family farming will continue to keep going, if a single farm payment wont sub it past 2015 an off farm job will, as it is doing already with a lot of suckler and tillage farmers
one thing for certain if input costs like fuel and fert and meal keep gong up the old "less is more" saying might be true, no point doing all that extra work if the suppliers are getting all the money

pakalasa

F.D wrote: »

.....one thing for certain if input costs like fuel and fert and meal keep gong up the old "less is more" saying might be true, no point doing all that extra work if the suppliers are getting all the money

Rising fuel costs are actually a good thing for Ireland, in that we are less dependant on them, than intensive in-door producers in other countries. It's an international market after all.