Milk Price- Please read Mod note in post #1

Farmer Ed

I think what Arabawn seem to have got right is that they have managed to put in place plenty of processing capacity without going on a mad spending spree. As a result they are not faced with large bank repayments on a bad year. Also they have managed to do away with the defined benefit pension and they still sell a far bit of product on the domestic market. This surely helps protect them against being over reliant on world markets and the associated volatility.
They also seem to have a Ceo who seems to have no interest in courting the media, but is Far more concerned about getting on with running the business.

mahoney_j

Farmer Ed wrote: »

I think what Arabawn seem to have got right is that they have managed to put in place plenty of processing capacity without going on a mad spending spree. As a result they are not faced with large bank repayments on a bad year. Also they have managed to do away with the defined benefit pension and they still sell a far bit of product on the domestic market. This surely helps protect them against being over reliant on world markets and the associated volatility.
They also seem to have a Ceo who seems to have no interest in courting the media, but is Far more concerned about getting on with running the business.

Plenty of processing capacity but a lot of it was spent from our own funds which has kept our debt situation manageable but our cash in hand a bit weaker .id of been critical of us in the past but it now looks like we are running a pretty decent ship and in fairness our ceo has dealt with the exodus and influx of suppliers pretty well even if I still don't agree with some of things that went on

Farmer Ed

mahoney_j wrote: »

Plenty of processing capacity but a lot of it was spent from our own funds which has kept our debt situation manageable but our cash in hand a bit weaker .id of been critical of us in the past but it now looks like we are running a pretty decent ship and in fairness our ceo has dealt with the exodus and influx of suppliers pretty well even if I still don't agree with some of things that went on

I think you are being modest when you say Arrabawns debt levels are manageable. I would say a drop in the ocean compared to some other co ops. Youd surely have to put some of that down to putting realistic measures in place to cope with expansion. It was all done without any fuss or the need for suppliers to give personal guarantees on co op debt.

In fairness there does seem to be a lot of credit due for the way that ship has been turned around in recent years. No one is perfect but credit where credit is due.

kevthegaff

Farmer Ed wrote: »

I think you are being modest when you say Arrabawns debt levels are manageable. I would say a drop in the ocean compared to some other co ops. Youd surely have to put some of that down to putting realistic measures in place to cope with expansion. It was all done without any fuss or the need for suppliers to give personal guarantees on co op debt.

In fairness there does seem to be a lot of credit due for the way that ship has been turned around in recent years. No one is perfect but credit where credit is due.

Ryan has done a great job imo, but hopefully he won't get stale like previous management.. when he took over large number of managers and inefficient labour numbers. Co op is in good position but need to work on meal/fertilliser/shop sales as have lost a number of customers in previous years. I still believe they have the farmers interests at heart ATM..

kevthegaff

http://www.agriland.ie/farming-news/fonterra-slashes-milk-price-now-equivalent-to-19cl/ getting serious now

kowtow

kevthegaff wrote: »

http://www.agriland.ie/farming-news/fonterra-slashes-milk-price-now-equivalent-to-19cl/ getting serious now

The 19c equivalent of course is in some part because the kiwi dollar is getting hammered compared to previous figures.

Interesting how often their central bank commentary blames milk prices for the fall - perhaps a little overstated - but in any case the ability to free float of course helps them as the falls in the EU last year helped us.

Mehaffey1

kevthegaff wrote: »

http://www.agriland.ie/farming-news/fonterra-slashes-milk-price-now-equivalent-to-19cl/ getting serious now

Never believed they'd cut to that low. I have would've put a good bit of money on a bet for a 4.30 payout announcement. Now we can officially announced that milk is worth less than half the money it was worth two seasons ago.

mahoney_j

Farmer Ed wrote: »

I think you are being modest when you say Arrabawns debt levels are manageable. I would say a drop in the ocean compared to some other co ops. Youd surely have to put some of that down to putting realistic measures in place to cope with expansion. It was all done without any fuss or the need for suppliers to give personal guarantees on co op debt.

In fairness there does seem to be a lot of credit due for the way that ship has been turned around in recent years. No one is perfect but credit where credit is due.

Manageable ,we'll find out in due course ,my big concern is were asset rich and somewhat cash poor .id bet our price was inflated somewhat last year to stop a mass exodus out and try attract in guys to replace what we list.

Mehaffey1

kowtow wrote: »

The 19c equivalent of course is in some part because the kiwi dollar is getting hammered compared to previous figures.

Interesting how often their central bank commentary blames milk prices for the fall - perhaps a little overstated - but in any case the ability to free float of course helps them as the falls in the EU last year helped us.

As I worked it at 12 litres to 1ms then Googled the NZD conversion to Euro it works out to 21cents per litre? Back in the big payout days the NZ government praised the Dairy industry to the high heavens but now that it's in tought times they are now referring the dairy industry as putting the brakes on the NZ economy. Nice to see they care about the country's biggest export only when it suits them.

mahoney_j

kevthegaff wrote: »

Ryan has done a great job imo, but hopefully he won't get stale like previous management.. when he took over large number of managers and inefficient labour numbers. Co op is in good position but need to work on meal/fertilliser/shop sales as have lost a number of customers in previous years. I still believe they have the farmers interests at heart ATM..

Your point re meal in particular is highly relevant ,we've no nutritionist on hand and quality of meal and nuts from doc has always been suspect .im proab one of closest suppliers to coop and out our way virtually no one purchases dairy feed from them .our store in Tyone in comparasion to liffeys is a bit of a joke with only one good farming background employee there Ivan think of

kowtow

Mehaffey1 wrote: »

As I worked it at 12 litres to 1ms then Googled the NZD conversion to Euro it works out to 21cents per litre? Back in the big payout days the NZ government praised the Dairy industry to the high heavens but now that it's in tought times they are now referring the dairy industry as putting the brakes on the NZ economy. Nice to see they care about the country's biggest export only when it suits them.

Central banks need content to fill up the bullet points on the powerpoint presentation just like the rest of us...

I know a lot of traders do watch the GDT when trading the kiwi but it's by no means the only thing.

Farmer Ed

mahoney_j wrote: »

Manageable ,we'll find out in due course ,my big concern is were asset rich and somewhat cash poor .id bet our price was inflated somewhat last year to stop a mass exodus out and try attract in guys to replace what we list.

The same could be said for all Co ops involved last year. Nothing like a bit of competition to keep Co op managment on their toes and based on who won that battle you'd have to say Arrabawn seam to be in the healthiest state.. As for cash rich? Apart from maybe some of the smaller Co ops in West cork. What other Co ops are cash rich?Indeed I would have thought the purpose of a co op should be to pass back earnings to its members. Not to become cash rich?

As for trading? From my experience with other Co ops I have to admire Arrabawns honesty when dealing with customers. This year for example their advice has been only buy what fertiliser you need as the price is falling. Compare that to other Co ops who are texting people non stop trying to burn people with loads of over priced stuff they are trying to off load.

kevthegaff

Farmer Ed wrote: »

The same could be said for all Co ops involved last year. Nothing like a bit of competition to keep Co op managment on their toes and based on who won that battle you'd have to say Arrabawn seam to be in the healthiest state.. As for cash rich? Apart from maybe some of the smaller Co ops in West cork. What other Co ops are cash rich?Indeed I would have thought the purpose of a co op should be to pass back earnings to its members. Not to become cash rich?

As for trading? From my experience with other Co ops I have to admire Arrabawns honesty when dealing with customers. This year for example their advice has been only buy what fertiliser you need as the price is falling. Compare that to other Co ops who are texting people non stop trying to burn people with loads of over priced stuff they are trying to off load.

Which co op do u supply ed?

mahoney_j

Farmer Ed wrote: »

The same could be said for all Co ops involved last year. Nothing like a bit of competition to keep Co op managment on their toes and based on who won that battle you'd have to say Arrabawn seam to be in the healthiest state.. As for cash rich? Apart from maybe some of the smaller Co ops in West cork. What other Co ops are cash rich?Indeed I would have thought the purpose of a co op should be to pass back earnings to its members. Not to become cash rich?

As for trading? From my experience with other Co ops I have to admire Arrabawns honesty when dealing with customers. This year for example their advice has been only buy what fertiliser you need as the price is falling. Compare that to other Co ops who are texting people non stop trying to burn people with loads of over priced stuff they are trying to off load.

I'm finding different and I'd do a fair chunk of my trading there.fertliser is dearer by 15/20 euro a tonne compared to other suppliers in area .i received no texts to purchase off anyone .ots a constant complaint at area meetings etc of our uncompetivness on purchase of everyday farm items and quality of stuff on offer .also the availability of people in some of the stores able to talk farming and understand what a customer needs and wants ,I went to my local store 2 years ago looking for a post emergence spray for a reseed and lad arrived back to me with 20 ltrs Gallup !!!,
All coops need cash and. Good reserve of it especially in current times ..we have spent a fortune (wisely might I add )on gas ,processing capacity etc in last 2 years primirally from own funds .now I know if I had a big building job on I wouldn't of been burying too much of my own funds in it leaving me no nest egg .interest rates are low and I'd be cap in hand to bank who will provide best terms

Farmer Ed

kevthegaff wrote: »

Which co op do u supply ed?

Relatively new supplier to Arrabawn and so far faily impressed with what I see. The management don't dress quite as well and they don't send out very fancy news letters like my last owners. It really does feel like a proper Co op and for that I am truly greatful.

kowtow

Farmer Ed wrote:

The management don't dress quite as well and they don't send out very fancy news letters like my last owners.

Money talks, but Wealth whispers.

Farmer Ed

mahoney_j wrote: »

I'm finding different and I'd do a fair chunk of my trading there.fertliser is dearer by 15/20 euro a tonne compared to other suppliers in area .i received no texts to purchase off anyone .ots a constant complaint at area meetings etc of our uncompetivness on purchase of everyday farm items and quality of stuff on offer .also the availability of people in some of the stores able to talk farming and understand what a customer needs and wants ,I went to my local store 2 years ago looking for a post emergence spray for a reseed and lad arrived back to me with 20 ltrs Gallup !!!,
All coops need cash and. Good reserve of it especially in current times ..we have spent a fortune (wisely might I add )on gas ,processing capacity etc in last 2 years primirally from own funds .now I know if I had a big building job on I wouldn't of been burying too much of my own funds in it leaving me no nest egg .interest rates are low and I'd be cap in hand to bank who will provide best terms

I suppose the big difference with inputs is that people are free to shop around. Not really as easy to shop around when selling your milk. I always think it is better if the Co Op concentrates on the core business of processing. Only today I got a notice that the process of liquidating Reox is almost complete. Also on leaving Dairygold my shares will be canceled and I will be just given a promissory note or an IOU if that's an easier way to describe it. I understand the suppliers that left Arrabawn will get a full cash refund to the value of their shares. The amount of shares needed in DG is also 4000 per 100k litres as opposed to only 1500 per 100k litres in Arrabawn.

To put it in context a 15 euro per ton saving on a 20 ton load of fertilizer would only come to 300 euro. A half cent per litre on 400000 L would come to 2000 euro. A 400k supplier to DG would also have to invest 10k extra in shares and should he decide to leave, precedence would suggest that they would be rendered practically worthless.

To be fair to Arrabawn so far my experience is that they don't put people under undue pressure to buy all their inputs of them. Maybe if Conor had a brother who was a major player in the fertilizer industry. They might be more competitive on fertilizer price.

Milked out

Farmer Ed wrote: »

I suppose the big difference with inputs is that people are free to shop around. Not really as easy to shop around when selling your milk. I always think it is better if the Co Op concentrates on the core business of processing. Only today I got a notice that the process of liquidating Reox is almost complete. Also on leaving Dairygold my shares will be canceled and I will be just given a promissory note or an IOU if that's an easier way to describe it. I understand the suppliers that left Arrabawn will get a full cash refund to the value of their shares. The amount of shares needed in DG is also 4000 per 100k litres as opposed to only 1500 per 100k litres in Arrabawn.

To put it in context a 15 euro per ton saving on a 20 ton load of fertilizer would only come to 300 euro. A half cent per litre on 400000 L would come to 2000 euro. A 400k supplier to DG would also have to invest 10k extra in shares and should he decide to leave, precedence would suggest that they would be rendered practically worthless.

To be fair to Arrabawn so far my experience is that they don't put people under undue pressure to buy all their inputs of them. Maybe if Conor had a brother who was a major player in the fertilizer industry. They might be more competitive on fertilizer price.

Who puts pressure to buy all inputs off them?

mahoney_j

Farmer Ed wrote: »

I suppose the big difference with inputs is that people are free to shop around. Not really as easy to shop around when selling your milk. I always think it is better if the Co Op concentrates on the core business of processing. Only today I got a notice that the process of liquidating Reox is almost complete. Also on leaving Dairygold my shares will be canceled and I will be just given a promissory note or an IOU if that's an easier way to describe it. I understand the suppliers that left Arrabawn will get a full cash refund to the value of their shares. The amount of shares needed in DG is also 4000 per 100k litres as opposed to only 1500 per 100k litres in Arrabawn.

To put it in context a 15 euro per ton saving on a 20 ton load of fertilizer would only come to 300 euro. A half cent per litre on 400000 L would come to 2000 euro. A 400k supplier to DG would also have to invest 10k extra in shares and should he decide to leave, precedence would suggest that they would be rendered practically worthless.

To be fair to Arrabawn so far my experience is that they don't put people under undue pressure to buy all their inputs of them. Maybe if Conor had a brother who was a major player in the fertilizer industry. They might be more competitive on fertilizer price.

Check some of them facts ed before u print them.theres a long painful history for many Arrabawn customers .in 10 years up to 2014 an average 350k dairygold supplier would of been 70 k better off than the same Arrabawn supplier ,fact .theres no pressure on us to purchase inputs from them but then again I don't know any processor who dose .one thing I will agree with u on is our current set up ,it's finally delievering but I'm still worried as to real state of cash reserves we have after all money spent over last few years

Farmer Ed

mahoney_j wrote: »

Check some of them facts ed before u print them.theres a long painful history for many Arrabawn customers .in 10 years up to 2014 an average 350k dairygold supplier would of been 70 k better off than the same Arrabawn supplier ,fact .theres no pressure on us to purchase inputs from them but then again I don't know any processor who dose .one thing I will agree with u on is our current set up ,it's finally delievering but I'm still worried as to real state of cash reserves we have after all money spent over last few years

I can't speak too much about the past as I wasn't part of it, but I think we are all in agreement that the current management have transformed Arrabawn. I understand that a lot of issues still plaguing other Co Ops such as Defined benefit pensions and the like were dealt with impressively.The processing capacity was discreetly put in place without the need to even hire a firm of PR consultants. As someone with experience of another purchaser. I never knew what a Co Op was until I started supplying Arrabawn. Im sure things are never perfect. But believe me pretty much everyone I know who has made the move are very happy that they did.

If cash reserves are the benchmark? Then apart from some of the west Cork Co Ops. I am not aware of any true Co Op with cash reserves? I do know of some who IMO can't be far off being in negative equity. One thing is for sure. Co Op bank repayments have to be made before farmers get paid for their milk.

Farmer Ed

Milked out wrote: »

Who puts pressure to buy all inputs off them?

Have you not heard of the latest agenda being promoted by ICOS? Botherbue seem to have gone the full monty in enforcing the idea. I guess their good milk price helped soften the blow. But already Dairygold have proposed offering a different price for milk depending on the amount of trading that is done with them. I suspect like tax rates there is nothing stopping that from being revising upwards in the future.

It has always been the case that anyone not buying 80% of their inputs could not run for the general committee. There is also a rule that someone who is insane can't run for it. That alway struck me as being a bit of a catch 22 situation. To be fair it was only enforced for certain people. I know of a chairman of a purchasing group who was allowed run for the board.

Water John

BTW Ed I know a high ex director of a coop who bought nearly all his ration from another coop, contrary to its rules.
Its funny, only some files must be checked.

Lets hope the transparency sorting getting a look in in IFA might begin to spread.

jaymla627

See that arla has cut milk price to a group of 50 non shared up suppliers to 15.25 pence litre from March, they where on 18.5 pence and are been hit with a 3.25 pence drop....
The wagons really are circling by the looks of things...

trixi2011

jaymla627 wrote: »

See that arla has cut milk price to a group of 50 non shared up suppliers to 15.25 pence litre from March, they where on 18.5 pence and are been hit with a 3.25 pence drop....
The wagons really are circling by the looks of things...

Big talk of some of the supermarket contracts in the uk been pulled would mean the down fall of some dairy farms for sure

jaymla627

trixi2011 wrote: »

Big talk of some of the supermarket contracts in the uk been pulled would mean the down fall of some dairy farms for sure

I'd say it would be the downfall of more then a few, them boys are still on in our around 30 pence a litre aren't they....
What the legalities of these contracts are they guaranteed for a couple of year our simply a gentleman's agreement that's reviewed yearly

cute geoge

trixi2011 wrote: »

Big talk of some of the supermarket contracts in the uk been pulled would mean the down fall of some dairy farms for sure

I would be more worried about lads closer to home ,still expanding to drive down the price to 20 cent a litre .lads in cubicle accomadion tread talking about 250 extra cubicles and in the next breath complaining about glanbia.
Let them at it!!

mahoney_j

Aghhh jaysus cheer up,no point us all whinging and moaning about milk price and what's happening in other countries .will be interesting when the mad lad putting in/planning low cost housing for 250 reads that post .efficency efficency efficency and control costs .price of milk is outside our control

jaymla627

mahoney_j wrote: »

Aghhh jaysus cheer up,no point us all whinging and moaning about milk price and what's happening in other countries .will be interesting when the mad lad putting in/planning low cost housing for 250 reads that post .efficency efficency efficency and control costs .price of milk is outside our control

It's a good one liner, and lots of lads believe it as Gospel according to teagasc, but loading on more cows with the current outlook re milk price is certified madness, and now it's looking like we are on course for a bitch of a wet spring too....
May put the helmet on now and wait to be told how I'm a inefficient farmer who's a naysayer

mahoney_j

jaymla627 wrote: »

It's a good one liner, and lots of lads believe it as Gospel according to teagasc, but loading on more cows with the current outlook re milk price is certified madness, and now it's looking like we are on course for a bitch of a wet spring too....
May put the helmet on now and wait to be told how I'm a inefficient farmer who's a naysayer

Don't know u from Adam jay and certainly wouldn't claim ur inefficient but u do print a lot of doom and gloom generalisation from time to time .quesrion if a guy can expand and make money regardless of milk price what's wrong with that ,he/she should be someone we all have a chat with.

Greengrass1

jaymla627 wrote: »

It's a good one liner, and lots of lads believe it as Gospel according to teagasc, but loading on more cows with the current outlook re milk price is certified madness, and now it's looking like we are on course for a bitch of a wet spring too....
May put the helmet on now and wait to be told how I'm a inefficient farmer who's a naysayer

Atm I'm working out where I'll put 45 heifers and an extra 30 cows next winter

frazzledhome

cute geoge wrote: »

I would be more worried about lads closer to home ,still expanding to drive down the price to 20 cent a litre .lads in cubicle accomadion tread talking about 250 extra cubicles and in the next breath complaining about glanbia.
Let them at it!!

Bollix
I'm the one posted on that thread. Where did you read me bitch about price?
You don't know my circumstances, you don't know if it's 250 extra cows!

It's nice to jump on the band wagon though

Btw, no need to be worried about me, but thanks for your faux concern

greenfield21

keep expanding lads and let's put these high cost producers out of business. we're safe as long as they don't start protesting to their Government for top ups.

rangler1

greenfield21 wrote: »

keep expanding lads and let's put these high cost producers out of business. we're safe as long as they don't start protesting to their Government for top ups.

,

2015 was always going to be a race to the bottom as soon as quotas ended,
Farmers keen to expand, young farmers frustrated in other enterprises, and once there's a margin, optimists will keep expanding......
Seen on another forum where a poster (jokingly) said that they'd have to blockade each others farm, such would be the poor response to a suggested commodity strike by dairy farmers

alps

Milked out wrote: »

Who puts pressure to buy all inputs off them?[/QUOTE

..

Milked out

Milked out wrote: »

Who puts pressure to buy all inputs off them?[/QUOTE

..

Link won't open?

alps

Milked out wrote: »

Link won't open?

Nah....can't open myself from here. ...A screenshot, just have to try again some other time....

Got a text from a guy who said he couldn't open it....must be lots of guys calving cows....

frazzledhome

This should keep some exercised http://www.agriland.ie/farming-news/pics-on-the-farm-that-swapped-a-350-bull-beef-enterprise-for-230-dairy-cows

freedominacup

frazzledhome wrote: »

This should keep some exercised http://www.agriland.ie/farming-news/pics-on-the-farm-that-swapped-a-350-bull-beef-enterprise-for-230-dairy-cows

I think I was on that farm a couple of years ago. If it's the same place he's gonna have his ears pinned back this year in the parlour. Perfectly serviceable but definitely on the small side for 300. Good operator. Very cost conscious.

frazzledhome

freedominacup wrote: »

I think I was on that farm a couple of years ago. If it's the same place he's gonna have his ears pinned back this year in the parlour. Perfectly serviceable but definitely on the small side for 300. Good operator. Very cost conscious.

He's not too far from me but I don't know him. Heal he's well switched on though

Dawggone

frazzledhome wrote: »

This should keep some exercised http://www.agriland.ie/farming-news/pics-on-the-farm-that-swapped-a-350-bull-beef-enterprise-for-230-dairy-cows

That, I think, was a very easy decision for him to make. Stopped producing bull beef 3yrs ago and won't miss it.
More luck to him.

frazzledhome

Dawggone wrote: »

That, I think, was a very easy decision for him to make. Stopped producing bull beef 3yrs ago and won't miss it.
More luck to him.

But, but, but what about following the herd?

Dawggone

frazzledhome wrote: »

But, but, but what about following the herd?

Lol.

keep going

He must have been fairly handyvat the beef game too if he owned rather than borrowed that much stock

kevthegaff

Stock could have been inherited, SFP I'd say is a big help...hel be fine I'd say

Farmer Ed

kevthegaff wrote: »

Stock could have been inherited, SFP I'd say is a big help...hel be fine I'd say

An awful lot of people doing well out of single farm payment alright.

We all heard the one one about the farmer when he was asked what he might do with his lotto winnings?

"Ah sur I think Ill stay farming away until Ill have it all spent"

blackdog1

Greengrass1 wrote: »

Atm I'm working out where I'll put 45 heifers and an extra 30 cows next winter

Make sure you have space whatever you do gg. I had a,few more than I had capacity for and overcrowding definitely affected a few cows. 1or 2 less downer cows would pay for a bit of concrete.

kevthegaff

Farmer Ed wrote: »

An awful lot of people doing well out of single farm payment alright.

We all heard the one one about the farmer when he was asked what he might do with his lotto winnings?

"Ah sur I think Ill stay farming away until Ill have it all spent"

Maybe I'm a bit cynical but for a large beef farmer swapping to dairy it's a lot easier then a greenfield, with sheds, large SFP, stock to sell. I started with no quota, no stock, no machinery, v small sfp but Luckily relativrly cheep rented land! And I think I'm getting there after 8 years!! I'd like to see more background to some of these success stories.. I have to admire the guys that went to nz share farming eventually buying they're own

Mehaffey1

frazzledhome wrote: »

This should keep some exercised http://www.agriland.ie/farming-news/pics-on-the-farm-that-swapped-a-350-bull-beef-enterprise-for-230-dairy-cows

Certainly not afraid of putting in serious investment and not doing things half arsed it seems. 50 bail rotary make for a very relaxed milking 300.

Greengrass1

blackdog1 wrote: »

Make sure you have space whatever you do gg. I had a,few more than I had capacity for and overcrowding definitely affected a few cows. 1or 2 less downer cows would pay for a bit of concrete.

Ahh ill sell stock if it comes to it. Would rather not but we'll see how things go

Mehaffey1

Rare position to be in Gg, having more stock on hand than you did before. Looks like we mightn't be buying any cows in for next season due to the payout, 800cows down to under 690 that'd be in two seasons, don't want to be thinking of it too much!