Milk Price- Please read Mod note in post #1

Dawggone

Milked out wrote: »

India? the sustained high prices for the last number of years are ironically to blame for this sustained trough. Production eventually caught up with demand and overshot massively just as demand slowed. This combined with China economy waning a bit, Russia doing what Russia do and the EUs response combined with the yanks being able to keep going for longer with cheap grain and oil and having learned and done something after 09. The yanks if I recall dropped off very fast in 09. Quota going here was only a small addition to the mess compared to the above.

Commodity super cycle.


Back to reality now. Thank God.

Dawggone

kowtow wrote: »

Come for the skiing, stay for the banking.

Lol!

Amazing that the supposed poster boys of solidity have an economy based on banking gangsterism/cronyism...oozes morality

browned

https://theconversation.com/milk-price-cuts-reflect-the-reality-of-sweeping-changes-in-global-dairy-market-59251

Dawggone

kowtow wrote: »

I know what you are getting at but that's only true over a limited time frame, and given a static producer and consumer base, each of whom alter production and consumption according to price.

If I could guarantee that milk will exceed 40c at some point in the next five years or so the cme liquid milk futures curve would look very different.

+1. And you're being diplomatic...

kowtow

Dawggone wrote:

Amazing that the supposed poster boys of solidity have an economy based on banking gangsterism/cronyism...oozes morality

Complicated economy, Switzerland but very free and fair in general. Nowhere near as corrupt as Germany.

And actually very little money laundering, that niche was taken over by London, Dublin and Cyprus ages ago as soon as the one side fits all regulations were brought in.

Swiss bankers really do "know their clients" because they only have a couple of dozen each.

Dawggone

browned wrote: »

https://theconversation.com/milk-price-cuts-reflect-the-reality-of-sweeping-changes-in-global-dairy-market-59251

Dammit, they stole my catchphrase...dairy reset.

Water John

Guy with a herd nearby has just left in the AA Bull.
Some people may look to simply have some cash next spring.

whelan2

Water John wrote: »

Guy with a herd nearby has just left in the AA Bull.
Some people may look to simply have some cash next spring.

Mine going in on Thursday.

Dawggone

kowtow wrote: »

Swiss bankers really do "know their clients" because they only have a couple of dozen each.

...follow the money.

I have to say I like Switzerland, I dated a lovely lady from Bern many moons ago and lived there for a few months. I worked in a shop in one of their covered streets/sidewalks. Good memories.

Water John

If you don't need replacements for a year, why not.
Decent calves to drink cheap milk and sell at a few weeks or three months.
May suit those beef rearing contracts.

mf240

Water John wrote: »

Guy with a herd nearby has just left in the AA Bull.
Some people may look to simply have some cash next spring.

Barney the whitehead is out with my cows since the 23rd April.

All whitehead calves this year Aswell no dairy. I'll be finishing all them for the factory and will buy replacement cows as needed.

My theory is that when milk is cheap, replacements will be cheap. And when it's dear I'll be able to afford dearer ones.

Eggs and baskets and all that.

kowtow

Dawggone wrote:

Dammit, they stole my catchphrase...dairy reset.

That's a very intelligent article although the headline is a tiny bit alarmist.

The point he is making is that marginal milk is itself a short term response to very unusual global conditions... the 'sonic boom' of China's take off between 2000 and 2010 for example.

So following his logic long term population growth or wealth growth in emerging economies isn't worth a damn in powder terms... because global supplies will have adjusted structurally so that marginal milk is.... marginal again. Makes complete sense.

Traditionally of course factory cheese was the form in which surplus milk was stored and exported. I wonder will we go back to that now (and if) the China emergency is over?

Water John

Most guys down south keep closed herds.
Don't risk bringing in disease.

Dawggone

kowtow wrote: »

That's a very intelligent article although the headline is a tiny bit alarmist.

The point he is making is that marginal milk is itself a short term response to very unusual global conditions... the 'sonic boom' of China's take off between 2000 and 2010 for example.

So following his logic long term population growth or wealth growth in emerging economies isn't worth a damn in powder terms... because global supplies will have adjusted structurally so that marginal milk is.... marginal again. Makes complete sense.

Traditionally of course factory cheese was the form in which surplus milk was stored and exported. I wonder will we go back to that now (and if) the China emergency is over?

Yes, excellent article. I was being frivolous or flippant in my comment.

I agree completely with your post. Marginal milk is marginal. I'd hate to have built my business model on that...

Is the China crisis over? I doubt it...

kowtow

Dawggone wrote:

Is the China crisis over? I doubt it...

If he's right it doesn't matter whether China's present alarm is over, or when it starts growing again... world supply structure will have altered and won't be caught off guard for a long while yet (and then not by china).

I never did like the harvest 2020 approach of extrapolating population growth direct into milk prices as we were the oily country in the world who could make it and the Chinese were unable to live without it.

As my father used to say, if you can't work out who the idiot is at the card table, it's you...

Nevertheless; the price won't go down for ever, and one day it'll be higher than it is now (or inputs and land will be much cheaper) so as someone very sensibly said the other day neither 20c or 40c are good places to make decisions.

Much more interesting is whether our national processor investment would have been better in factory cheese than powder. The West Cork coops may yet rule the world!

alps

Dawggone wrote: »

As I've said, the sooner milk hits 12/14cpl for a prolonged period, the better. That'll sort the men from the boys.

Jaysus Dawg...there's far easier ways of inflicting pain on yourself. ..

Should be plenty service providers in France..

Farmer Ed

Dawggone wrote: »

Who's fault is that exactly?
Dairy had quotas and a protected guaranteed income...tillage got some reprieve from McSharry. Nothing stopped dairy from going into the entitlements market and buying, as I did. Or should they be gifted to dairy also? The buying of SFP was a no brainer...

Exactly the low margin loss making enterprises were subsidised the most. Now that dairying is loss making, maybe we should have the whole thing revisited. Especially since most dairy farmers are still full time and a lot of them have no other income.

Farmer Ed

Milked out wrote: »

India? the sustained high prices for the last number of years are ironically to blame for this sustained trough. Production eventually caught up with demand and overshot massively just as demand slowed. This combined with China economy waning a bit, Russia doing what Russia do and the EUs response combined with the yanks being able to keep going for longer with cheap grain and oil and having learned and done something after 09. The yanks if I recall dropped off very fast in 09. Quota going here was only a small addition to the mess compared to the above.

http://m.economictimes.com/industry/cons-products/food/indias-dairy-products-export-seen-flat-at-30000-tonnes-in-2016-usda/articleshow/49536867.cms

India exports relatively little but is the largest producer.. One thing about India is the percentage of the final price that makes its way back to tu farmer is much higher the here.

Dawggone

alps wrote: »

Jaysus Dawg...there's far easier ways of inflicting pain on yourself. ..

Should be plenty service providers in France..

Selfish reasons for inflicting pain. The death by a thousand cuts is long and painful whereas a severe drop would reset the industry a lot faster. That's why I'd like to see an end to intervention now.

Dawggone

Farmer Ed wrote: »

Exactly the low margin loss making enterprises were subsidised the most. Now that dairying is loss making, maybe we should have the whole thing revisited. Especially since most dairy farmers are still full time and a lot of them have no other income.

SFP was traded on the open market for years and everyone had to chance to buy. 'Twas a no brainer.

Of course it needs to be revisited now that world markets are at play in dairy...maybe take the SFP from tillage and beef and gift to dairy farmers? Indeed.

Dawggone

kowtow wrote: »

If he's right it doesn't matter whether China's present alarm is over, or when it starts growing again... world supply structure will have altered and won't be caught off guard for a long while yet (and then not by china).

I never did like the harvest 2020 approach of extrapolating population growth direct into milk prices as we were the oily country in the world who could make it and the Chinese were unable to live without it.

As my father used to say, if you can't work out who the idiot is at the card table, it's you...

Nevertheless; the price won't go down for ever, and one day it'll be higher than it is now (or inputs and land will be much cheaper) so as someone very sensibly said the other day neither 20c or 40c are good places to make decisions.

Much more interesting is whether our national processor investment would have been better in factory cheese than powder. The West Cork coops may yet rule the world!

It makes me laugh when the Ag industry trot out the population theory for producing more...as I said recently, start at the Danube, face east and drive for days, and days.
There is an oversupply of dairy in the world. The only way to fix that is cut supply, not fill warehouses with product and hope for a Chinese miracle.
After two of the largest harvests in history, grains are in a similar situation without the intervention hopium. This years harvest looks to be another bumper...lovely.
In grains Waffletraktor pointed out that anyone producing the low end product is gone or going broke. He's right.

West Cork Coops can only handle so much produce...if the thousands of tons of milk powder dumped by Irish Coops into intervention so far this year was turned into cheese would it be better? Maybe.

Farmer Ed

Dawggone wrote: »

SFP was traded on the open market for years and everyone had to chance to buy. 'Twas a no brainer.

Of course it needs to be revisited now that world markets are at play in dairy...maybe take the SFP from tillage and beef and gift to dairy farmers? Indeed.

If my aunt had different autonomy shed be my uncle. The fact is by and large tillage farmers would have on average higher single farm payments based on the fact that it was seen at the time of their introduction that dairying didn't need high payments as it was a profitable enterprise. Unfortunately no longer the case in 3026. What you ate suggesting is a bit like saying to a low paid worker that he doesn't qualify for family income supplements because his wages 10 years ago were too high.

Dawggone

Farmer Ed wrote: »

If my aunt had different autonomy shed be my uncle. The fact is by and large tillage farmers would have on average higher single farm payments based on the fact that it was seen at the time of their introduction that dairying didn't need high payments as it was a profitable enterprise. Unfortunately no longer the case in 3026. What you ate suggesting is a bit like saying to a low paid worker that he doesn't qualify for family income supplements because his wages 10 years ago were too high.

There was nothing stopping farmers from buying ents...
What you're suggesting is 'beggar thy neighbor'.
Whilst screaming for market protection to be removed it would have been a prudent hedge to buy some high value entitlements...or not I suppose if you think that you can throw the toys out of the pram and get them from your neighbors, for free...cos you're worth it.

keep going

kowtow wrote: »

First and most important principle, farmer co-ops own the transporters. The overriding principle of a co-op should be to get the farmers milk to the market, ie. to the processor able to pay best for it at the time, subject to the approval of the farmer. In other words the co-op takes the milk to market because sharing an expensive time sensitive milk lorry with your neighbours is quite obviously the common sense thing to do.

Processors can be owned by anybody who wants to process. In the first instance of course most co-op suppliers already own part of a processor, so perhaps you would split these out. Existing suppliers would end up with distribution shares, processing shares, and milk supply agreements would then need to be addressed.

Distributors could certainly keep agri-supply, inputs etc. I would have thought. Is there any obvious reason why a large scale international dairy commodity business is the best entity to weigh dry and compound straights or sell fertiliser, or a cup of coffee, or green diesel, or a bunch of filter socks?

I don't see why a farmer should need to own a processor to supply it, but there is no reason at all why he shouldn't choose to support a particular processor by investing in it (as he does today) - he might choose to support more than one. And of course he can support a processor by contracting with it for his milk supply (or perhaps an equivalent volume of a certain quality) - at a fixed price, at a variable price, for a term or on whatever he can agree. Maybe he wants to basically supply powder at the floating market price, have a fixed price liquid contract with another supplier, and supply 30,000 litres a year for free to a small scale cheese-maker in return for shares while they get started and into market, whatever - provide a rich efficient distribution network and let entrepreneurial creativity do the rest.

There's obviously an issue of logistics - where the actual milk from an actual farm goes. Some processors will need to know this (particularly the artisan ones) and others won't care as long as the quality can be certified. It ought to be possible for co-ops to exchange powder milk in the way electricity companies do - and simply deliver the net balance to each other to minimise costs. In other words, if I want to supply 100,000 litres to powder the milk might come from Whelan's tank, because when push came to shove less lorry journeys were involved. That much is not rocket science.

And of course there is the big issue - what happens to the milk nobody wants? The answer is, the same as happens today, someone will buy it for the minimum price and turn it into powder for intervention or God knows what - and that is what is happening today, no matter how much it is disguised by loyalty payments, support payments, or any other return of shareholders funds.

Edit:

And when excess milk has to be virtually given away, more farmers will choose to support some little artisan, or an innovative vodka, or a science based protein start up, and some will fail and some will succeed and each time around we will have a more exciting, higher premium, dairy processing market so sell into. Our milk supply will grow because we have the products for it, not the other way around. Ask yourself, if amazon or google or apple were doing dairy processing in Ireland, would they really do it the way it is done today?

am i to take it that you set it up similar to the way the english model is set up.who are the most likely people to control processing in that scenario,larry goodman ?,he has shown he is the best operater in a high capital /low margin business.just a throw back to when ed mentioned he was getting 60 c a litrefrom a small artisan processor ,60 cent isnt much goodif its only taking the milk from 5 cows and you are getting 15 cent for the rest and thats why small artisan producers will never influence milk price

Dawggone

keep going wrote: »

am i to take it that you set it up similar to the way the english model is set up.who are the most likely people to control processing in that scenario,larry goodman ?,he has shown he is the best operater in a high capital /low margin business.just a throw back to when ed mentioned he was getting 60 c a litrefrom a small artisan processor ,60 cent isnt much goodif its only taking the milk from 5 cows and you are getting 15 cent for the rest and thats why small artisan producers will never influence milk price

Good point.
But if there are enough artisan producers with the right product surely some will break into the wider markets? Stilton started small...
But on the here and now, small artisan products are akin to King Canute.

Farmer Ed

Dawggone wrote: »

There was nothing stopping farmers from buying ents...
What you're suggesting is 'beggar thy neighbor'.
Whilst screaming for market protection to be removed it would have been a prudent hedge to buy some high value entitlements...or not I suppose if you think that you can throw the toys out of the pram and get them from your neighbors, for free...cos you're worth it.

If your looking for a neighbour to begger. The easiest target would be the dairy farmer with borrowings producing milk below cost.

Waffletraktor

Farmer Ed wrote: »

If your looking for a neighbour to begger. The easiest target would be the dairy farmer with borrowings producing milk below cost.

When bps is levelled out I'm sure it will stop dairy farmers from moaning? Living in protected markets for 30 years and scarcely 12 months in the real world looking for restrictions again never mind intervention...
Here's a black forest gateau guys would you like a coffee/carrot cake or a Swiss roll to go with that?

rangler1

Waffletraktor wrote: »

When bps is levelled out I'm sure it will stop dairy farmers from moaning? Living in protected markets for 30 years and scarcely 12 months in the real world looking for restrictions again never mind intervention...
Here's a black forest gateau guys would you like a coffee/carrot cake or a Swiss roll to go with that?

t
90% of dairy farmers must have a good float built up in assets,they should be well able to withstand a couple bad years.
Like in anything it's the minority makes the most noise.......wished my sector had protected markets for thirty years

kowtow

keep going wrote:

am i to take it that you set it up similar to the way the english model is set up.who are the most likely people to control processing in that scenario,larry goodman ?,he has shown he is the best operater in a high capital /low margin business.just a throw back to when ed mentioned he was getting 60 c a litrefrom a small artisan processor ,60 cent isnt much goodif its only taking the milk from 5 cows and you are getting 15 cent for the rest and thats why small artisan producers will never influence milk price

If you had a decent open auction I don't see why Larry would succeed where the corner brothers failed.

Water John

It would not necessarily be LG.
In pigs Barryroe bought Stauntons and semm to be doing quite well. On the other hand DG had a large pig business and brands and lost it all.
i don't think any one had to sign up to Stauntons to supply pigs for 5/7 years without knowing a price.

Its always down to good management. Everything else is an excuse.

pedigree 6

rangler1 wrote: »

t
90% of dairy farmers must have a good float built up in assets,they should be well able to withstand a couple bad years.
Like in anything it's the minority makes the most noise.......wished my sector had protected markets for thirty years

I hear they have 2 heads and use 50 euro notes as toilet paper.

rangler1

pedigree 6 wrote: »

I hear they have 2 heads and use 50 euro notes as toilet paper.

They must have ........did you ever try to compete with them to rent land

wats the craic

pedigree 6 wrote: »

I hear they have 2 heads and use 50 euro notes as toilet paper.

who ranger 1 and his ifa cronnies

mf240

rangler1 wrote: »

They must have ........did you ever try to compete with them to rent land

Your hardly the type to rent land. You seem to be more for the cushy life with a few sheep and draw you payments.

Starting to think you might be right.

mf240

pedigree 6 wrote: »

I hear they have 2 heads and use 50 euro notes as toilet paper.

Seems to be a bit of begrudgery towards dairy farmers.

Which is very unusual in this country!!

Farmer Ed

mf240 wrote: »

Your hardly the type to rent land. You seem to be more for the cushy life with a few sheep and draw you payments.

Starting to think you might be right.

Best thing to bail a man out is sell land to the Nra

mf240

mf240 wrote: »

Your hardly the type to rent land. You seem to be more for the cushy life with a few sheep and draw you payments.

Starting to think you might be right.

Farmer Ed wrote: »

Best thing to bail a man out is sell land to the Nra ]

Think that's a bit below the belt to be fair.

freedominacup

Farmer Ed wrote: »

If my aunt had different autonomy shed be my uncle. The fact is by and large tillage farmers would have on average higher single farm payments based on the fact that it was seen at the time of their introduction that dairying didn't need high payments as it was a profitable enterprise. Unfortunately no longer the case in 3026. What you ate suggesting is a bit like saying to a low paid worker that he doesn't qualify for family income supplements because his wages 10 years ago were too high.

Tbh ed I remember at the time we couldn't believe the filip our sfp got from the dairy payment. Ours wouldn't have been bad anyway but the dairy payment bumped it by close to 40%. This would say on a per ha basis the dairy payment is around 60% of a beef or tillage one. Beef was the biggie. If your sr was anyway high you were hitting for €300/acre under male cattle.

Waffletraktor

mf240 wrote: »

Seems to be a bit of begrudgery towards dairy farmers.

Which is very unusual in this country!!

What's the term, everyone else is just having a tough time but dairy is in crisis. Musha. Who owes you a living?

pedigree 6

I took over the farm in 2010. Own 40 acres and rent another 50.
When I took over I got 30,000 gallons of quota transferred in my name.
I also got the sfp transferred as well 4400 euro.
We were milking in a 4 unit bucket plant with tie up chains and in 2005 got a pipeline in.
When I took over I immediately started work on a new milking parlour.
I put up a four span shed and bought an eight unit secondhand parlour off the buy and sell in meath. I did all the concrete work myself with the help of a neighbour and then I help him back.
I bought a milk tank as well off the buy and sell as well in meath as well.
I drained 4 acres of boggy land as cheaper than buying and able to graze with cows.
I put in roadways using a contractor being able to dig and get filling on the farm.
I reseeded about 15% of the land every year and am still doing it.
I built another shed for cow housing for the winter and 2 years ago put in slurry storage for 70 cows with a tank and slats.
Then when 44,000 of milk quota was being given to new entrants I applied but was refused. I didn't want 44 just enough to bring me up to 44.
I contacted the IFA and talked to Catherine lascurettes and was told no hope only way I could have got it was if my father sold it before I took over and I applied myself. Contacted everyone no luck.

I was always supplying over the quota but because I was so small I never got hit with a superlevy so I kept improving the place and trying to make things easier and get the farm setup.
Last year then with the country over quota Glanbia for the first time hit the smaller farmers and I was hit with a superlevy of 26,000 in the last year of quotas.

Now we hear here how I should have bought entitlements with What?
People will also say I should have bought quota again with What?

There's a lot of preconceived notions of dairy farmers rolling in money and big v's small farmers and how quotas protected small farmers.
Maybe it might have protected me if I had enough of it to start with but it didn't stop the disaster of 2009.

I am happier atm farming wise and have doubled what I was producing before.
Could I have done this under quotas no if quotas were still here I would not be farming. So I can't see how it protected the small farmer. Held him back that's all.

pedigree 6

rangler1 wrote: »

They must have ........did you ever try to compete with them to rent land

Yes i'm competing with tillage and dairy farmers down here giving stupid money for land and then wondering why they have no money and some going broke.

Farmer Ed

freedominacup wrote: »

Tbh ed I remember at the time we couldn't believe the filip our sfp got from the dairy payment. Ours wouldn't have been bad anyway but the dairy payment bumped it by close to 40%. This would say on a per ha basis the dairy payment is around 60% of a beef or tillage one. Beef was the biggie. If your sr was anyway high you were hitting for €300/acre under male cattle.

Different times

pedigree 6

Waffletraktor wrote: »

What's the term, everyone else is just having a tough time but dairy is in crisis. Musha. Who owes you a living?

No one. And no one owes you a living either remember that.
It's not my fault if farmers go to agm's and start marching.
That's their business and the tillage farmers should be as well and I would support them as well.

Farmer Ed

mf240 wrote: »

Farmer Ed wrote: »

Think that's a bit below the belt to be fair.

Normally I would agree with you
But some people don't wear belts

Buford T. Justice XIX

Someone should open a Milk Price thread somewhere.....

kevthegaff

Word on 1-2 cent drop for arrabawn, any word jerry or is it bull

kevthegaff

pedigree 6 wrote: »

I took over the farm in 2010. Own 40 acres and rent another 50.
When I took over I got 30,000 gallons of quota transferred in my name.
I also got the sfp transferred as well 4400 euro.
We were milking in a 4 unit bucket plant with tie up chains and in 2005 got a pipeline in.
When I took over I immediately started work on a new milking parlour.
I put up a four span shed and bought an eight unit secondhand parlour off the buy and sell in meath. I did all the concrete work myself with the help of a neighbour and then I help him back.
I bought a milk tank as well off the buy and sell as well in meath as well.
I drained 4 acres of boggy land as cheaper than buying and able to graze with cows.
I put in roadways using a contractor being able to dig and get filling on the farm.
I reseeded about 15% of the land every year and am still doing it.
I built another shed for cow housing for the winter and 2 years ago put in slurry storage for 70 cows with a tank and slats.
Then when 44,000 of milk quota was being given to new entrants I applied but was refused. I didn't want 44 just enough to bring me up to 44.
I contacted the IFA and talked to Catherine lascurettes and was told no hope only way I could have got it was if my father sold it before I took over and I applied myself. Contacted everyone no luck.

I was always supplying over the quota but because I was so small I never got hit with a superlevy so I kept improving the place and trying to make things easier and get the farm setup.
Last year then with the country over quota Glanbia for the first time hit the smaller farmers and I was hit with a superlevy of 26,000 in the last year of quotas.

Now we hear here how I should have bought entitlements with What?
People will also say I should have bought quota again with What?

There's a lot of preconceived notions of dairy farmers rolling in money and big v's small farmers and how quotas protected small farmers.
Maybe it might have protected me if I had enough of it to start with but it didn't stop the disaster of 2009.

I am happier atm farming wise and have doubled what I was producing before.
Could I have done this under quotas no if quotas were still here I would not be farming. So I can't see how it protected the small farmer. Held him back that's all.

+1 very similar to myself in terms of quota and steady frugal investment but still not made up!

rangler1

mf240 wrote: »

Your hardly the type to rent land. You seem to be more for the cushy life with a few sheep and draw you payments.

Starting to think you might be right.

Used to be into that madness, used to sow a good bit of corn, had my own combine, corn drill etc.......lunacy.
used to rent grass and sow corn at home

freedominacup

Farmer Ed wrote: »

Different times

How do you mean?

Water John

Yes, different people are at diff phases in life and farming.
Those there with years and an eye on the ball set themselves up. Those coming later to farming are at a serious disadvantage simply due to the accident of timing.

Some of you, in the circumstances chose to produce over quota milk. Lets be honest, the processors cheerleadered it. But sadly, the bill is with the farmer.