Milk Price- Please read Mod note in post #1

degetme

were you expecting to get that much temp leasing mahony _j?
waiting on Kerry yet to announce temp leasing allocations

mahoney_j

degetme wrote: »

were you expecting to get that much temp leasing mahony _j?
waiting on Kerry yet to announce temp leasing allocations

Coop is over 9% over at moment so was expecting a couple of hundered ltrs at most as every second lad u talk to around here is 30 to 60 k plus ltrs over.under 350 lads got 10500 ltrs.dont know where it all came from

Mulumpy

Got 10500 temp lease here. Very pleased with that. Will only be around 3% over now.

mf240

When will us glanbia lads know if we got flexi or not?

milkprofit

mf240 wrote: »

When will us glanbia lads know if we got flexi or not?

April or may

mf240

milkprofit wrote: »

April or may

Sorry meant temperary leasing??

frazzledhome

Glanbia
49.11 for Dec milk
5 bf
3.86 p
Average price for 14 was 42c for all milk delivered. This doesn't inc .5c topup due if passed at SGM

This would have been higher if I had no fixed price. The fixed price will come into its own this year. The fixed milk will have a premium of 3.11c per litre.

Greengrass1

frazzledhome wrote: »

Glanbia
49.11 for Dec milk
5 bf
3.86 p
Average price for 14 was 42c for all milk delivered. This doesn't inc .5c topup due if passed at SGM

This would have been higher if I had no fixed price. The fixed price will come into its own this year. The fixed milk will have a premium of 3.11c per litre.

What % of your supply is in fixed?
We lost on the first scheme a good bit. I kind of thought it might help in 15

Coonagh

frazzledhome wrote: »

Glanbia
49.11 for Dec milk
5 bf
3.86 p
Average price for 14 was 42c for all milk delivered. This doesn't inc .5c topup due if passed at SGM

This would have been higher if I had no fixed price. The fixed price will come into its own this year. The fixed milk will have a premium of 3.11c per litre.

I'm watching my own processor closely to see will they make any move to offer a fixed price scheme, if they don't I will be changing to supply glanbia.

frazzledhome

Coonagh wrote: »

I'm watching my own processor closely to see will they make any move to offer a fixed price scheme, if they don't I will be changing to supply glanbia.

How much would you consider prudent to fix

We're on 30%. Took a hit in 14 but will make it up in 15. The good thing about the GIIL scheme is that's its linked to inputs. It's a fixed margin as opposed to fixed price

just do it

frazzledhome wrote: »

Glanbia
49.11 for Dec milk
5 bf
3.86 p
Average price for 14 was 42c for all milk delivered. This doesn't inc .5c topup due if passed at SGM

This would have been higher if I had no fixed price. The fixed price will come into its own this year. The fixed milk will have a premium of 3.11c per litre.

Ave yield?

Coonagh

frazzledhome wrote: »

How much would you consider prudent to fix

We're on 30%. Took a hit in 14 but will make it up in 15. The good thing about the GIIL scheme is that's its linked to inputs. It's a fixed margin as opposed to fixed price

Amount be fixed I suppose would depend on market conditions at the time. As a tool to manage volatility it's the only thing out there and like you said what you lost in 14 your looking likely to gain in 15,. The way I see it the fixed price scheme is providing stability to your business and will allow you to plan ahead with some level of certainty. If you are a taking a long view (which I think we all should) the fixed price scheme is a no brainer.

mahoney_j

Coonagh wrote: »

Amount be fixed I suppose would depend on market conditions at the time. As a tool to manage volatility it's the only thing out there and like you said what you lost in 14 your looking likely to gain in 15,. The way I see it the fixed price scheme is providing stability to your business and will allow you to plan ahead with some level of certainty. If you are a taking a long view (which I think we all should) the fixed price scheme is a no brainer.

What price is fixed scheme set at????.also on 15 price with droughts down under and yanks slow/reluctant to open the taps ,gdt auctions slowly rising and Chinese to return to market 15 might not be that bad.also On Fixed scheme if the fixed portion ifvyour milk is at sat 32 cent is that 32 cent base plus solids or just 32 base??.no such scheme here in Arrabawn but currently we are paying a price over 32 cent per ltre ,1/2 cent ahead ofvthe posse

frazzledhome

just do it wrote: »

Ave yield?

430 kgs ms

Greengrass1

frazzledhome wrote: »

430 kgs ms

Reckon we lost 20 kilos per cow by having to dry off early.
Won't happen again 😊

frazzledhome

mahoney_j wrote: »

What price is fixed scheme set at????.also on 15 price with droughts down under and yanks slow/reluctant to open the taps ,gdt auctions slowly rising and Chinese to return to market 15 might not be that bad.also On Fixed scheme if the fixed portion ifvyour milk is at sat 32 cent is that 32 cent base plus solids or just 32 base??.no such scheme here in Arrabawn but currently we are paying a price over 32 cent per ltre ,1/2 cent ahead ofvthe posse

It's +solids +bonus +coop payment with a top up based on agri inflation to cover inputs

It's a volatility mgt tool and that why I wouldn't recommend putting all milk in. It guarantees margin on a portion of milk.

stanflt

43,70 for December

whelan2

stanflt wrote: »

43,70 for December

41.61 here

loveta

Lakeland base price for Dec was 30.530 put another 5 cent to that if you get the winter bonus which basically is 45% or more of your may supply of that year

milkprofit

frazzledhome wrote: »

How much would you consider prudent to fix

We're on 30%. Took a hit in 14 but will make it up in 15. The good thing about the GIIL scheme is that's its linked to inputs. It's a fixed margin as opposed to fixed price

What is the fixed margin

kowtow

frazzledhome wrote: »

It's +solids +bonus +coop payment with a top up based on agri inflation to cover inputs

It's a volatility mgt tool and that why I wouldn't recommend putting all milk in. It guarantees margin on a portion of milk.

It's only a volatility management tool if it is transparent all the way through to the final purchaser....

the question you have to ask here is who is going to be losing, if you end up gaining on the contract? If it's a single block of milk specifically (and transparently) hedged in the marketplace - if the co-op has acted as your agent, in effect - then there is no problem, useful tool. If OTOH the co-op stands to lose or gain if the market runs against the fixed price pool we are getting into very dangerous territory... either the co-op is in danger and doesn't know what it is doing or they do, and it's a contract not worth having.

mahoney_j

Gdt auction today showed 1% rise across all products,the slow steady rise continues

billie holiday

35.2 cpl with winter bonus
4 fat
3.22 protein

Milked out

Received 32.77c/L for dec milk excluding bonus. @ 3.42p and 4.21bf

Averaged 40.81 for year at 3.52p and 3.98bf. Hopefully this year won't be as bad as it's making out to be price wise and mother nature plays ball

just do it

kowtow wrote: »

It's only a volatility management tool if it is transparent all the way through to the final purchaser....

the question you have to ask here is who is going to be losing, if you end up gaining on the contract? If it's a single block of milk specifically (and transparently) hedged in the marketplace - if the co-op has acted as your agent, in effect - then there is no problem, useful tool. If OTOH the co-op stands to lose or gain if the market runs against the fixed price pool we are getting into very dangerous territory... either the co-op is in danger and doesn't know what it is doing or they do, and it's a contract not worth having.

My take on this is it's a bit like fixing the interest rate on a mortgage. Banks hire highly qualified actuaries to predict future interest rates. Based on this the bank offers a fixed interest rate which factor in a safety margin for the bank but yet appeal to the risk adverse customer. There is just no way the average customer will out wit actuaries.

I can't see that it is any different with fixed price for milk. There is no way the co-op are going to pay more than they think they have to.

Now of course if you need a guaranteed level of cashflow then the fixed price premium is probably worth it. Overall though the corporate entity will be main benefactor.

frazzledhome

kowtow wrote: »

It's only a volatility management tool if it is transparent all the way through to the final purchaser....

the question you have to ask here is who is going to be losing, if you end up gaining on the contract? If it's a single block of milk specifically (and transparently) hedged in the marketplace - if the co-op has acted as your agent, in effect - then there is no problem, useful tool. If OTOH the co-op stands to lose or gain if the market runs against the fixed price pool we are getting into very dangerous territory... either the co-op is in danger and doesn't know what it is doing or they do, and it's a contract not worth having.

It's on a fixed amount of milk to one customer. The customer wants a guaranteed amount at a price. The coop del with the customer. As things stand the customer could get milk cheaper today than the fixed price but stay in as quality and quantify is guaranteed. Swings and roundabouts. There is no futures market in EU, well certainly no developed one.

frazzledhome

just do it wrote: »

My take on this is it's a bit like fixing the interest rate on a mortgage. Banks hire highly qualified actuaries to predict future interest rates. Based on this the bank offers a fixed interest rate which factor in a safety margin for the bank but yet appeal to the risk adverse customer. There is just no way the average customer will out wit actuaries.

I can't see that it is any different with fixed price for milk. There is no way the co-op are going to pay more than they think they have to.

Now of course if you need a guaranteed level of cashflow then the fixed price premium is probably worth it. Overall though the corporate entity will be main benefactor.

The benefit of this is customer knows exactly what milk is costing for 3 yrs so no volatility and the coop knows its margin no effort into renegotiating price and the farmer is guaranteed a price with a top up if Ag inflation dictates.

So rather than as you suggest the corporate winning, we all know where we are going.

I stress I'd not be putting all my milk into this scheme. If a farm is highly borrowed surely its prudent to build in a margin to cover repayments in case of a year like this?

frazzledhome

milkprofit wrote: »

What is the fixed margin

You know your costs, you know your price and Ag inflation is topped up therefore you've a fixed margin

Dawggone

frazzledhome wrote: »

The benefit of this is customer knows exactly what milk is costing for 3 yrs so no volatility and the coop knows its margin no effort into renegotiating price and the farmer is guaranteed a price with a top up if Ag inflation dictates.

So rather than as you suggest the corporate winning, we all know where we are going.

I stress I'd not be putting all my milk into this scheme. If a farm is highly borrowed surely its prudent to build in a margin to cover repayments in case of a year like this?

+1. Excellent tool.
It's just risk management. Farmers would be well advised to learn how to use it wisely.

kowtow

just do it wrote: »

My take on this is it's a bit like fixing the interest rate on a mortgage. Banks hire highly qualified actuaries to predict future interest rates. Based on this the bank offers a fixed interest rate which factor in a safety margin for the bank but yet appeal to the risk adverse customer. There is just no way the average customer will out wit actuaries.

I can't see that it is any different with fixed price for milk. There is no way the co-op are going to pay more than they think they have to.

Now of course if you need a guaranteed level of cashflow then the fixed price premium is probably worth it. Overall though the corporate entity will be main benefactor.

It's even simpler than that - banks trade the whole yield curve all the time, and despite economists and actuaries they have no better idea most of the time of the timing and size of rate changes than you do.

Banks will lend at a fixed rate for a fixed time to you on any day when they can borrow in the markets at a better fixed rate for a better fixed time.. that way a profit on the loan is locked in and made on the day the loan is given.

They spend money advertising ("helping the customer") with fixed rates at times when such loans are particularly profitable for them - often when they can borrow longer and cheaper all of a sudden, as the curve is shifting.

kowtow

frazzledhome wrote: »

It's on a fixed amount of milk to one customer. ... is no futures market in EU, well certainly no developed one.

That is a perfectly transparent hedge, there doesn't have to be any kind of traded market. Just a customer as you describe. In effect the co-op is ring-fencing milk from you to that customer as an agent

What you want to avoid is the co-op taking any kind of speculative position against the supplier (which is what the bank is doing in the example above)

And don't get me wrong - absolutely it is a good idea to fix some portion of the output, properly constructed and completely transparent these are badly needed tools. Its just that, in this country in particular, I can imagine a lot of damage being done with dangerous tools in greedy hands! I can think of at least one small country whose national airline ended up contracted for several years ahead to buy fuel at an oil price of >120$ barrel, locked in by it's "clever, prudent" managers during the peak oil months and ending up a basket case.

Out of interest how do they calculate input costs, particularly all that grass?

atlantic mist

it only allows a certain % of our supply to be fixed, if im hedging i want to be able to set amounts myself, think it will be a good tool but def needs bit more work, were workin against dairy margin protection scheme in us
as far as im aware we wouldn see an extra margin in acc for the processor fixed price scheme as it allowed their customers to lock in at set prices so the customer benefited not the processor or supplier

Timmaay

whelan2 wrote: »

41.61 here

Just over 40c here. Poor solids from fresh calvers didn't help at all, adds to my motivation to ditch the autumn calvers.

I got nothing in the fixed price scheme and don't plan on putting anything into it any day soon, however I would consider the current liquid milk as a glorified fixed price scheme, so that's a good enough safety net for me.

frazzledhome

kowtow wrote: »

That is a perfectly transparent hedge, there doesn't have to be any kind of traded market. Just a customer as you describe. In effect the co-op is ring-fencing milk from you to that customer as an agent

What you want to avoid is the co-op taking any kind of speculative position against the supplier (which is what the bank is doing in the example above)

And don't get me wrong - absolutely it is a good idea to fix some portion of the output, properly constructed and completely transparent these are badly needed tools. Its just that, in this country in particular, I can imagine a lot of damage being done with dangerous tools in greedy hands! I can think of at least one small country whose national airline ended up contracted for several years ahead to buy fuel at an oil price of >120$ barrel, locked in by it's "clever, prudent" managers during the peak oil months and ending up a basket case.

Out of interest how do they calculate input costs, particularly all that grass?

Input costs calculated based on CPI all Ag ones are used

solwhit12

Dairygold base 30.06 cpl.

Greengrass1

Anyone get there yearly milk recording results?
Interesting the best cows breaking the 3k in milk sales are a mixture if hol fr and je.
Some very good holiday/fr cows too hitting over 2800€ of milk sold

atlantic mist

where does it tell you how much they made? got our annual report from icbf and dnt c it in it

Greengrass1

atlantic mist wrote: »

where does it tell you how much they made? got our annual report from icbf and dnt c it in it

Its on milk recording.
Progressive do ours don't know if other companies are doing it

loveta

Greengrass1 wrote: »

Its on milk recording.
Progressive do ours don't know if other companies are doing it

JUst went into icbf there progressive does mine also is it the yearly report cause mine is still only 01 jan14 up

atlantic mist

wit progressive ourselves, dont seem to hav our up yet but hav kingswood so just ran last year reports from icbf and income per cow came up sound gg great addition to report
few ladies surprised me, changed avg pricing from 42 to 28 it will make some diff next year:(

Deepsouthwest

Greengrass1 wrote: »

Anyone get there yearly milk recording results?
Interesting the best cows breaking the 3k in milk sales are a mixture if hol fr and je.
Some very good holiday/fr cows too hitting over 2800€ of milk sold

I'm with Munster, and it's on the milk recording annual report, seriously interesting reading. Must check again, but don't think I have any over the €3000 mark, but a lot of cows nearly there. Gives a whole new picture to who ur best producing cows are, it's better than litres, kgs ms or anything else, this is what it's all about.

Greengrass1

Deepsouthwest wrote: »

I'm with Munster, and it's on the milk recording annual report, seriously interesting reading. Must check again, but don't think I have any over the €3000 mark, but a lot of cows nearly there. Gives a whole new picture to who ur best producing cows are, it's better than litres, kgs ms or anything else, this is what it's all about.

That cross bred that hit the 3300 was a winter milker.
Higher milk price pushed her that high I'd say.

frazzledhome

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11394963

RightTurnClyde

Go on ya good thing ya!!!!
http://www.agriland.ie/news/major-rise-latest-global-dairy-trade-auction/

That, and the drop in the Euro...it's all good

jaymla627

RightTurnClyde wrote: »

Go on ya good thing ya!!!!
http://www.agriland.ie/news/major-rise-latest-global-dairy-trade-auction/

That, and the drop in the Euro...it's all good

Milk powder dollar price converted back to euros still only comes to 33 cent a litre before processing costs, costs between 8-10 cent a litre to process milk to milk powder so 24 ish cent is the price on world markets at the minute....needs to rise realistically by another 20% before we get back into the 30s our in and around it step in the right direction all the same though...

mf240

jaymla627 wrote: »

Milk powder dollar price converted back to euros still only comes to 33 cent a litre before processing costs, costs between 8-10 cent a litre to process milk to milk powder so 24 ish cent is the price on world markets at the minute....needs to rise realistically by another 20% before we get back into the 30s our in and around it step in the right direction all the same though...

milk powder is only one of the products that the likes of glanbia do. There always banging on about all the high end products that there making.

No reason for them not to hold at 30.5 in the short term to see if this recovery materialises.

jaymla627

mf240 wrote: »

milk powder is only one of the products that the likes of glanbia do. There always banging on about all the high end products that there making.

No reason for them not to hold at 30.5 in the short term to see if this recovery materialises.

At the meetings they held at the end of the year it's what they where banging on about when questioned re milk price their line was that's what the gdt markets where paying and that's the market price, would be very surpirised if they held at 30.5....

leg wax

no one wants to be first or seen to drop milk price before april as they may lose new milk suppliers.

Deepsouthwest

leg wax wrote: »

no one wants to be first or seen to drop milk price before april as they may lose new milk suppliers.

I could be wrong, but don't think we'll have much of cut on milk price until April, if it was to drop under 28/29c/litre (less than the super levy fine)then farmers over quota may start dumping it. Coops def don't want that as they'll have less milk to manufacture. Super levy don't worry them.

Brown Podzol

Deepsouthwest wrote: »

I could be wrong, but don't think we'll have much of cut on milk price until April, if it was to drop under 28/29c/litre (less than the super levy fine)then farmers over quota may start dumping it. Coops def don't want that as they'll have less milk to manufacture. Super levy don't worry them.

I agree, but March price won't be set until well into April.