Milk Price- Please read Mod note in post #1

Farmer Ed

http://theglobaldairy.com/noticias/dairy-sector-is-stretched-to-the-limit-warn-vets-47130/

Farmer Ed

mf240 wrote: »

Hard to beat a good holstein cow.

Anyone here milking Fleckvieh? I don't know a lot about them. But some interesting reports coming back from trials done in Holland.

jaymla627

Farmer Ed wrote: »

http://theglobaldairy.com/noticias/dairy-sector-is-stretched-to-the-limit-warn-vets-47130/

The independent was fairly bi-polar yesterday with it's articles on one hand you had the above piece and then we had the piece on the Zurich dairy farmer of the year, stand out points where 10% stillborn rate, 14% empty rate last year with a lot of this comprised of 1 st lactation animals and a outbreak of grass tetany this spring that saw one cow dead and another 3 go down....
But of course the main reason he won it was he was feeding little meal and making the cows lick paddocks clean all of which ment he was apparently making 2c/l extra with better grass utilisation and solids but I doubt the above fertility/ herd health problems where factored in

Milked out

Farmer Ed wrote: »

mf240 wrote: »

Hard to beat a good holstein cow.

Anyone here milking Fleckvieh? I don't know a lot about them. But some interesting reports coming back from trials done in Holland.

Used a few straws this year, put them in cows that need a bit of capacity but not inclined to go full blown only small trial, some cows getting them were gonna get a beef straw anyway. And if bulls land they should make a bit more than the fr.

Jaysus Christ

I've that shed cleaned out.

atlantic mist

http://www.agriland.ie/farming-news/frieslandcampina-holds-milk-price-for-june-supplies-of-milk/

getting paid on lactose...

why have our processors not advanced to this stage of paying for lactose also would result in extra few cents

base 2c lower than ours

great to see the gii ceo giving out more production details to farmers journal than at any of our supply information evening, communication is excellent as always

level of debt is a worry, if supplies reduce this cost increases on every liter, profit of 50m with nearly 5 going on interest currently

who is funding cheese expansion is it coop or gii?

Pacoa

GDT up 3.4%

AMF index up 2.8%, average price US$3,444/MT
Butter index up 3.2%, average price US$2,762/MT
BMP index up 14.2%, average price US$1,765/MT
Ched index up 7.8%, average price US$2,669/MT
LAC index up 4.7%, average price US$750/MT
RenCas index down 1.6%, average price US$5,035/MT
SMP index up 12.1%, average price US$1,867/MT
WMP index down 1.7%, average price US$2,205/MT

Farmer Ed

http://theglobaldairy.com/noticias/dairy-industry-lessons-to-be-learnt-about-china-47187/

whelan2

http://www.farmersjournal.ie/glanbia-co-op-creates-55m-glanbia-advance-payment-scheme-210732 whats the story with this?

Farmer Ed

whelan2 wrote: »

http://www.farmersjournal.ie/glanbia-co-op-creates-55m-glanbia-advance-payment-scheme-210732 whats the story with this?

If your really hungry you can eat tomorrow's bread today. Plus you can say goodbye to the millk price league as now there are so many swings and round abouts it's going to be a lot more difficult to figure out who is paying the best price.

If pr people were to dream of a spin Heven it would surely look something like that.

kowtow

whelan2 wrote:

whats the story with this?

What I couldn't fathom was the bond issue by the coop to finance the support fund... apparently the bonds are 'exchangeable' against the coops holding in the plc but I couldn't find a deal sheet or prospectus so I don't know on what terms they convert.

mahoney_j

jaymla627 wrote: »

The independent was fairly bi-polar yesterday with it's articles on one hand you had the above piece and then we had the piece on the Zurich dairy farmer of the year, stand out points where 10% stillborn rate, 14% empty rate last year with a lot of this comprised of 1 st lactation animals and a outbreak of grass tetany this spring that saw one cow dead and another 3 go down....
But of course the main reason he won it was he was feeding little meal and making the cows lick paddocks clean all of which ment he was apparently making 2c/l extra with better grass utilisation and solids but I doubt the above fertility/ herd health problems where factored in

How about a certain fella from Meath that won it a few years back,all ped Holsteins ,licking paddocks and feeding 1.5 t plus of meal ??????

Milked out

kowtow wrote: »

whelan2 wrote:

whats the story with this?

What I couldn't fathom was the bond issue by the coop to finance the support fund... apparently the bonds are 'exchangeable' against the coops holding in the plc but I couldn't find a deal sheet or prospectus so I don't know on what terms they convert.

Does it mean farmers will have to give up coop shares for this fund?

kowtow

No.

The coop is raising funds with a bond exchangeable for the plc shares it still holds.

What I didn't see were the terms upon which it was exchangeable and whether by the issuer (coop) or the subscriber (lender) and under what circumstances... they could be anything from at will by the subscriber to only upon default by the issuer.... would be interested to see their approach.

What I suspect it does mean is that those plc shares held by the coop can't be spun out or otherwise dealt with during the life of the bond.

Edit: the milk price around which the automatic payout / payback revolves is also important. Unless the co-op is taking a mighty double down gamble one would imagine that they expect milk to return to that price in due course so that the funds raised by the bond can be recirculated and serviced.

In the meantime it's a way of giving producers the 'use' of the plc share capital + income, at a price for the coop and it's members. The funds may be interest free for those that use them but the coupon on the bond must be paid by the coop membership from profits which would otherwise be distributable.

Difficult to be more precise with the limited information in the press yesterday.

Bass Reeves

There is another issue with the bond everyone's shares are now indentured. What this means is that farmers that are not using the bond are giving a subsidy to those that use the bond. As well the capital of those that do not use the bond and dry shareholders is put at risk.

The question is this legal, can a co-op or company use it capital or in this case borrow to support some share holders. In a company's case it cannot however in a co-op case it is questionable. What this will mean as well is that it may prolong downturn's in price. At what level will trigger points be and will PLC's use it as an crutch to drop the price in downturns as farmers are supporting themselves.

Farmer Ed

https://m.facebook.com/story.php?story_fbid=1731148877135108&id=1410613982521934. Very interesting preventive from this guy.

Buford T. Justice XIX

This is the first prediction of a recovery in milk price. An interesting analysis, you could say.

http://www.ifa.ie/market_reports/dairy-market-blog-25/#.V1FJBL4bIm2

• Ireland sold 27,423t of SMP into intervention in total in 2016
• Actual stock end April 152,394t (large quantities bought in in May do not appear yet) – Ireland accounted for 14,437t in stock at the same date
• Unlike intervention, APS is transient stock, operator retains ownership and often has a market for the product when it goes into storage
• Only 4,928t offered into the 210 day SMP scheme this year to end May – Ireland 0t
• 17,731t offered into the 365 day SMP scheme to end May – Ireland 0t
• 89,425t butter offered into APS – Ireland 772t
• 46,630t Cheese – Ireland 3,438t
• Stocks to end April (latest available data from EU MMO)
• SMP APS (all schemes) 32,026t
• Butter APS 78,295t
• Cheese APS 34,182t
• Note, any product put into storage during May/June does not appear yet in official stock figures.

It looks like we are selling most of the extra production but Belgium, in particular, has not been able/willing to sell on the open market.

stanflt

mahoney_j wrote: »

How about a certain fella from Meath that won it a few years back,all ped Holsteins ,licking paddocks and feeding 1.5 t plus of meal ??????

I heard he was topping paddocks instead of licking them- not much let behind after topper

yosemitesam1

Buford T. Justice V wrote: »

It looks like we are selling most of the extra production but Belgium, in particular, has not been able/willing to sell on the open market.

Is that because we've already sold our share into intervention and are dumping the surplus outside it at a discount?

kowtow

Bass Reeves wrote: »

There is another issue with the bond everyone's shares are now indentured. What this means is that farmers that are not using the bond are giving a subsidy to those that use the bond. As well the capital of those that do not use the bond and dry shareholders is put at risk.

The question is this legal, can a co-op or company use it capital or in this case borrow to support some share holders. In a company's case it cannot however in a co-op case it is questionable. What this will mean as well is that it may prolong downturn's in price. At what level will trigger points be and will PLC's use it as an crutch to drop the price in downturns as farmers are supporting themselves.

From a company perspective I wouldn't see a problem supporting producers, on arms length terms, this case is the inverse of the common misunderstanding of farmer shareholders - in other words the co-op cannot favour farmer shareholders because they are farmers, but it can lend money to farmers (regardless of the fact that they are shareholders)... it's all about the two roles being different despite being occupied by the same individuals.

As to the actual price points and the operation of the mechanism I have the same reservations as you - and in general I'm uncomfortable with the idea that the solution to low milk prices is to increase debt.

Count Mondego

How is it that every time I open this thread, I never find a post that gives the price of milk?

Milked out

Count Mondego wrote: »

How is it that every time I open this thread, I never find a post that gives the price of milk?

The milk price for previous months milk is generally not announced for most coops till the 3rd wk of the month so that's when prices would be put up mostly. Unlike in Europe where they get the price a month or 2 in advance

Milked out

yosemitesam1 wrote: »

Buford T. Justice V wrote: »

It looks like we are selling most of the extra production but Belgium, in particular, has not been able/willing to sell on the open market.

Is that because we've already sold our share into intervention and are dumping the surplus outside it at a discount?

If that's the case we would be better off without it as it will be the intervention milk coming back on the market will undermine us again as we are selling and they are not. If it wasn't there Belgium, france and the higher users of it would be taking a bigger hit now and would react faster. It obviously would hit us too but a shorter faster drop may be more manageable than this long drawn out affair

whelan2

Count Mondego wrote: »

How is it that every time I open this thread, I never find a post that gives the price of milk?

Any idea on May price?

yewtree

whelan2 wrote: »

Any idea on May price?

Word from my coop Aurivo is milk price is coming down another cent. That would be 22 base for May milk. We will have to wait and see price won't be set until middle of month

Buford T. Justice XIX

yosemitesam1 wrote: »

Is that because we've already sold our share into intervention and are dumping the surplus outside it at a discount?

The Belgians have 'placed'(dumped) 86% of their excess production over 2014-2015 into intervention while we, Holland and Germany, iirc, have sold most of our excess production on the market. We are actually taking up very little of intervention stocks. We would be able to be 'softer' sellers than most due to our 'low cost' production while still being able to make a profit/take less of a loss.

Milked out wrote: »

If that's the case we would be better off without it as it will be the intervention milk coming back on the market will undermine us again as we are selling and they are not. If it wasn't there Belgium, france and the higher users of it would be taking a bigger hit now and would react faster. It obviously would hit us too but a shorter faster drop may be more manageable than this long drawn out affair

The stock overhang is not a massive concern, as the EU Commission has a reasonable record of selling intervention stock prudently when markets recover, and at a profit.-from the end of the first paragraph

atlantic mist

bond is a positive move timing is questionable, i have meet a lot of people who thought the milk flex loan would be easier than one of the pillar banks, it was stated here on boards that they could raise funds cheaper through bonds than we can so why not avail of it, what rate are they availing of bond at considering banks are providing finance at 3.7% its obviously sub that figure, coop have given gii a loan and now were raising a bond to give us a loan, sometimes it doesnt make sense what they are at no long term thinking at board level to much short term thinking, are we charging more in interest than we will be paying?

it seems to be all about cheap finance these days hope they are not forgetting we need a reasonable milk price to repay these funds, funding isnt the issue income is

my worry is people will avail of this finance who the banks will not touch, be interesting to see how much of bond gets used to cover trading bills, will it be available to everyone or is it one of their selective schemes?

shares as collateral for bond, reduces possible shares entering market for duration of bond, will share aid plc share price by reducing agri business bad debts and moving it over to coop and less shares to enter the public market for duration of bond

worry is the coop is now taking large risk in areas of financing, gaurentor for milk flex loan, now putting shares against bond...all down side risk for coop, will be a shame to see coop taking members to court if inability to repay loans keeping plc good name in tact

on quota from looking at the intervention figures the belgiums and french need to have a good look at their industries (french with their so called regions of produce and most of it sitting in a warehouse now) were after putting as much into intervention as the germans, no wonder france and belgium want to bring back in some sort of quota, were in line with the germans may be its time for them to get in line also, close intervention and they will suffer, were only using it as a bottom of the market tool we wouldnt sell for less

Bass Reeves

Buford T. Justice V wrote: »

The Belgians have 'placed'(dumped) 86% of their excess production over 2014-2015 into intervention while we, Holland and Germany, iirc, have sold most of our excess production on the market. We are actually taking up very little of intervention stocks. We would be able to be 'softer' sellers than most due to our 'low cost' production while still being able to make a profit/take less of a loss.


The stock overhang is not a massive concern, as the EU Commission has a reasonable record of selling intervention stock prudently when markets recover, and at a profit.-from the end of the first paragraph

It is still a disadvantage to those country that are taking the hit now. it supports farmers that have a higher cost base. If it was not in place Belgium and French Farmers would be getting less for there milk. They seem to be totally dependent on there internal markets and have not the flexibility/contacts to sell the excess product. If they had to sell that excess product the processors in Belgium and France would be undercutting each other to get rid of this product.

This is what is happening in Ireland I notice a good few sale offers on cheese. If you look outside milk at present Pork and Chicken meat is on offer(being discounted) because of excess production

Farmer Ed

Count Mondego wrote: »

How is it that every time I open this thread, I never find a post that gives the price of milk?

Well increasingly that one is going to become more complicated. It will no longer just a+b-c. From now on it looks like it will also include +or-d for bonuses or penalties +or-d for loans and loan repayments from the co op.-f for share up.
Comparing milk price does not look like it's going to be a straight forward task..

Water John

I see from the IFJ, Cork farmers have the best and the worst of prices.
A 100 cow dairy farmer in mid cork had a difference of €2,600 in his cheque in mid May from his neighbour. Depended on who was lucky to be the West Cork supplier.
That is shocking. The management and board members of Dairygold are directly responsible for extra hardship on those farm families. There is no shirking that.
There is a reponsibility that they must be held accountable for.

Bass Reeves

Water John wrote: »

I see from the IFJ, Cork farmers have the best and the worst of prices.
A 100 cow dairy farmer in mid cork had a difference of €2,600 in his cheque in mid May from his neighbour. Depended on who was lucky to be the West Cork supplier.
That is shocking. The management and board members of Dairygold are directly responsible for extra hardship on those farm families. There is no shirking that.
There is a reponsibility that they must be held accountable for.

Not really sure if it is all D fault. Could the farmer have moved processors. Happens all the time with beef we move from one ball@x to another

Water John

That's a core problem Bass. Prior to quota end there was a 'gentlemens agreement' nobody to go to. Any one that tried was blocked generally.

Since the end of quotas, there was a small window of changes. DG and Glanbia took some suppliers from Arrabawn. However, In return Arrabawn indicated they were willing to accept supplies and they got more than had left.

ICOS then negotiated a new ' 'gentlemens agreement' that requires 90 day notice of move.

BTW most suppliers of DG and Glanbia had already been signed up to MSA's long term prior to the end of quotas.
Most farmers locked into whoever they supply at whatever price the processor decides from time to time.

Milked out

What were solids of both farms and what portion of carbery price was in fixed price scheme? Was the comparison solely on base price and solids adjustment nothing else? It's already been done how carberys other interests are supporting milk price. More power to them and I do envy them, but we dont have that cushion. if we could all make the correct decisions life would be dandy. We were toe to toe with them at the top in 14, and ahead of many others.

Milked out

What were solids of both farms and what portion of carbery price was in fixed price scheme? Was the comparison solely on base price and solids adjustment nothing else? It's already been done how carberys other interests are supporting milk price. More power to them and I do envy them, but we dont have that cushion. if we could all make the correct decisions life would be dandy. We were toe to toe with them at the top in 14, and ahead of many others.

Water John

Better buy your own copy of IFJ Milked Out.
You can do the sums any way you wish. West Cork top of the league, Dairygold at the bottom.
May be Boherbue and North Cork have a sideline fund too.

Milked out

http://www.agriland.ie/farming-news/wheat-production-to-again-outstrip-use-as-dairy-prices-set-to-remain-weak

Water John

Nobody can or is expected to buck a trend. Milk prices are low.
That makes it more important that whatever that whatever price can be squeezed out of the market at this time is destined to support the farmer.

Bass Reeves

Water John wrote: »

Nobody can or is expected to buck a trend. Milk prices are low.
That makes it more important that whatever that whatever price can be squeezed out of the market at this time is destined to support the farmer as long as processors can maintain there margin or at least have the same profit on greater volumes .

I corrected that for you

Water John

That's fair Bass, every business must have a base profit level. Nobody asks or expects any business to beggar itself.

We know quite well that Dairygold price to the farmer is affected at this time by the capital spend on Mallow. They have not any leeway from the banks.
They are putting 25/30M per year into it at this time.
That is over 2 cent per litre. Bad decisions, very bad timing on expansion. Jumped without a parachute.

Milked out

Water John wrote: »

That's fair Bass, every business must have a base profit level. Nobody asks or expects any business to beggar itself.

We know quite well that Dairygold price to the farmer is affected at this time by the capital spend on Mallow. They have not any leeway from the banks.
They are putting 25/30M per year into it at this time.
That is over 2 cent per litre. Bad decisions, very bad timing on expansion. Jumped without a parachute.

What would milk price be if we were to depend on others to process our milk

Bass Reeves

Water John wrote: »

That's fair Bass, every business must have a base profit level. Nobody asks or expects any business to beggar itself.

We know quite well that Dairygold price to the farmer is affected at this time by the capital spend on Mallow. They have not any leeway from the banks.
They are putting 25/30M per year into it at this time.
That is over 2 cent per litre. Bad decisions, very bad timing on expansion. Jumped without a parachute.

TBH DG whole business plan is based on WMP. It failed to diversify into cheese or other products. If you look back historically back nearly 30 year they were the first to diversify from butter to spreads. Do you remember Dairygold spread Which was a just adding a bit of veg oil to as little butter as possible. Kerry group knew that butter was on the decline but refused to be the first to break the cycle even though they had Low Low and Dawn low fat butter brand names trade marked. But DG again with no plan in place saw what they taught was a market and jumped.

So will you tell me what is new

Yes DG have nothing to support milk price after all they sold all there beautiful brand names Galtee, Mitcheltown, etc. To ere is human totally f@@kup it take DG

einn32

Bass Reeves wrote: »

Water John wrote: »

That's fair Bass, every business must have a base profit level. Nobody asks or expects any business to beggar itself.

We know quite well that Dairygold price to the farmer is affected at this time by the capital spend on Mallow. They have not any leeway from the banks.
They are putting 25/30M per year into it at this time.
That is over 2 cent per litre. Bad decisions, very bad timing on expansion. Jumped without a parachute.

TBH DG whole business plan is based on WMP. It failed to diversify into cheese or other products. If you look back historically back nearly 30 year they were the first to diversify from butter to spreads. Do you remember Dairygold spread Which was a just adding a bit of veg oil to as little butter as possible. Kerry group knew that butter was on the decline but refused to be the first to break the cycle even though they had Low Low and Dawn low fat butter brand names trade marked. But DG again with no plan in place saw what they taught was a market and jumped.

So will you tell me what is new

Yes DG have nothing to support milk price after all they sold all there beautiful brand names Galtee, Mitcheltown, etc. To ere is human totally f@@kup it take DG

Did Kerry not buy that Dairygold spread brand? It's a shame to think of all those brands were sold alright. But diets change, would/are these brands doing as well nowadays?

whelan2

kowtow wrote: »

No.

The coop is raising funds with a bond exchangeable for the plc shares it still holds.

What I didn't see were the terms upon which it was exchangeable and whether by the issuer (coop) or the subscriber (lender) and under what circumstances... they could be anything from at will by the subscriber to only upon default by the issuer.... would be interested to see their approach.

What I suspect it does mean is that those plc shares held by the coop can't be spun out or otherwise dealt with during the life of the bond.

Edit: the milk price around which the automatic payout / payback revolves is also important. Unless the co-op is taking a mighty double down gamble one would imagine that they expect milk to return to that price in due course so that the funds raised by the bond can be recirculated and serviced.

In the meantime it's a way of giving producers the 'use' of the plc share capital + income, at a price for the coop and it's members. The funds may be interest free for those that use them but the coupon on the bond must be paid by the coop membership from profits which would otherwise be distributable.

Difficult to be more precise with the limited information in the press yesterday.

would this new scheme not be better for farmers than the milk flex scheme? Why announce it after people have signed up? Could you part take in both?

Water John

Yes Bass, DG have a long history of bad decisions.

Milked Out, that's the line that has been fed to DG suppliers. 'What would we do with your milk if we don't put up this state of the art plant?'

There was already a 5 ton/hour drier in Mallow. If Mallow is put up to take peak supply at a cost of €83.5M, that's not good use of scarce resources.
Carbery put in plant to cater for peak supply for less than €5M.

Don't be niaive. The raid on Arrabawn suppliers was to get milk supply to justify the plant in Mallow and to make it more efficient to run the Mallow plant.

It was bad timing to take a risk on such a high capital outlay. A high capital outlay not based on a long term financing arrangement. €100M due back by the end of 2017. Banks have them by the short and curlies.
Banks are calling the shots here.

Farmer suppliers are being screwed on way by Dairygold and another way by Glanbia.

Farmer Ed

einn32 wrote: »

Did Kerry not buy that Dairygold spread brand? It's a shame to think of all those brands were sold alright. But diets change, would/are these brands doing as well nowadays?

Last i heard Dairygold spread is the most profitable product Kerry sell on the Irish market

jaymla627

whelan2 wrote: »

would this new scheme not be better for farmers than the milk flex scheme? Why announce it after people have signed up? Could you part take in both?

Scheme isn't activated till base price drops below 24 cent, reckon we will see a cent pulled in may and June but this will be subbed by above scheme, smokes and daggers move on their part to keep lads from shouting to much...
If a farmer where to take on a sizeable loan from milk flex and avail of this aswell, their future milk cheques would be fairly decimated would be easily 5-7 cent being deducted in peak months for repayments, which is totally unsustainable if prices keep bouncing around the mid 20s

atlantic mist

whelan2 wrote: »

would this new scheme not be better for farmers than the milk flex scheme? Why announce it after people have signed up? Could you part take in both?

ya you could avail of both. Coop is interest free....nothing is ever free is this world there will be a cost...trigger havent been announced.... i think this has been tabled as many trading accounts are under serious pressure and banks and finance ireland will not provide finance to unprofitable enterprises, agri business has started taking farmers to court down this neck of the woods which wouldnt look great on the pr side of things, the interest rate the charged by agri business to date is like getting finance from a sub prime lender, gii needs continued supply and agri business the same otherwise cash flows wouldnt meet loans, its important for them to keep supplies up

Milk flex is a loan suited to your volatile milk price (well they allow volatility twice in 10 years...not too much scope but something at least, land not used as collateral but personal gaurentee given so you might as well have land on table) reduced payments where milk price below 28c but after using 2 volitality movement you must make full/additional payment to make up for low priced periods...potential to increase tax from additional payments required.... they do a full credit check on you. will coop do the same ...doubt it....

who is providing the bond? at what rate?
farmers who recieve funds going to pay back on time to release our shares after bond completes or are we effectively spinning out more shares to fund trading accounts out of control? Are shares if spun out at todays rate or at the date bond ceases?

interesting how our industry/processor reacts, milk volumes across the globe are over produced were producing under cop and were pushing cheap finance to keep supplies up, expanding production facilities.

Glanbia coop now following tesco, moving away from kerry at the min, into finance well be selling fuel yet...boats of milk powder to nigerian and returning diesel for us

coop seems to be doing everything within its power to support suppliers but dont seem to be able to find any improvements from within gii to bring our base price in line with EU average, strategic drift has developed with in coop half now looking for capital appreciation due to large shareholding while other half trying to run business requiring best return from raw produce supplied

Bass Reeves

Farmer Ed wrote: »

Last i heard Dairygold spread is the most profitable product Kerry sell on the Irish market

Is that on volume or margin. Kerry have such a diverse number of brands it hard to get detail. Dairygold spread had the biggest market share, however Low Low brand competes with Flora and Kerrymaid replaced dawn butter as the dawn brand was more or less sold to GII. Ig you look you will no longer see the Dawn milk on sale in shops so GII is slowly replacing those brands.

The bond is a three card trick all it is doing is making sure that risky credit is secured elsewhere. It is also in GII interest it always wanted to reduce the farming shareholding down to the 10-20% bracket if not into single figures. It also guarantee's them milk supply from those that have this credit. What is the betting that the loan is defaulted on in 6-10 years time and a chunk of the shares are sold to finance those farmers who's cost is too high.

Farmer Ed

Bass Reeves wrote: »

Is that on volume or margin. Kerry have such a diverse number of brands it hard to get detail. Dairygold spread had the biggest market share, however Low Low brand competes with Flora and Kerrymaid replaced dawn butter as the dawn brand was more or less sold to GII. Ig you look you will no longer see the Dawn milk on sale in shops so GII is slowly replacing those brands.

I'm not sure but I was told that by someone who attended a Kerry agm and came home with the impression that Dairygold spread was performing really well for Kerry

kowtow

Bass Reeves wrote: »

What is the betting that the loan is defaulted on in 6-10 years time and a chunk of the shares are sold to finance those farmers who's cost is too high.

I doubt very much that they would let a default event occur, which begs the question what are the conversion terms against the plc shares in the bond?

Agree that they won't have been able to secure the bond without resorting to plc shares, but that's not surprising given the artificial / captive nature of the business. Note that part of the proceeds were for coop working capital, be interesting to see how big a part.

And where does the term of the bond fit with the buyout option on the 50%? I'd have thought that was the logical long term plan for the shares until now.

Still, all this is detail - what makes me uncomfortable is the idea of farmers being lent money (even if it is their own) rather than paid for milk, the true underlying market picture, and the danger of distorting the price signals at this point in the cycle.