David McWilliams, ag article

micraX

st1979 wrote: »

That's crap. I have had French students most years and its always shocked me that I get a similar milk price and if I am to believe what they told me sometimes better price than they do.
We can't export 90% of our produce and expect to get paid more than the native producers of that country.
For years the UK farmers got paid less than us in Eire. Yet they have to import milk. Surely the British farmer should get paid more than the Irish farmer. Considering that consumers generally prefer to support native businesses. If I was a German farmer I would be pissed off if I was not getting significantly more for my milk than an Irish farmer. As I am supplying my native countrymen who are one of the richest nations on the planet.
And as Irish farmers we are supplying many very poor countries and many rich ones.
I heard it said that when milk went above 34 cent that the Nigerian market suffered which Glanbia supplied. I think its a sad truth that the poor in Nigeria could pay a relatively decent price compared to us rich westerners. Think they appreciate what it is to go hungry.
Sorry for the rant

That's exactly how Irish vegetable farmers feel, look in the supermarkets, all the imports, a lot from Holland and most of the produce can be grown here. Irish growers aren't given a chance. It's not fair. And it's never highlighted. All the media and farming organisations want to hear about it milk and cattle...

kowtow

st1979's post above sent me back to look at Irish vs German milk prices since 2001....

And he is absolutely right... at least since 2006 Irish prices have kept pace with, even bettered German prices. The graph below shows the accumulated advantage of Germany over Ireland for the last 15 years (basically adding all the prices together and deducting a notional 24c COP for both countries). What is interesting is that in the "old days" when commodity prices were stable Germany consistently did better than us.. since the price shocks + commodity bubble of 2006 onwards, growth of China etc. Ireland has caught up - because our milk prices at the farm gate have actually been a bit better (although a small bit) on a fairly consistent basis.

Whether that will continue depends on whether the period since 2006 is an aberration and commodities return to a more stable long term price, and also on how much milk Germany produces for export to world markets (diluting their own local liquid price).

But if our advantage over Germany in sale price is real, and will continue beyond 2015, we need to ask ourselves do German farmers enjoy a higher standard of living than us... and if so why? The answer to that probably lies in cost of production which - when labour and land are added - makes us a more expensive producer than Germany. That's easily enough solved by feeding the cows, getting in the robots etc., and making sure you produce a million litres for every man on the farm.

Of course, if commodities don't behave that way and settle back down to long term norms then the German domestic price will go back to being better than ours, and while they will be able to afford to feed the cows indoors we certainly won't. On the other hand we won't be enjoying prices much above 20-30c for what we do produce, either.

So you pays your money and you takes your choice.

st1979

My general kinda point is the grass is always greener far away. And I mean that in a ' they have lower input cost or better milk price' kinds of way. I think we actually do a pretty good job. We are a commodity producer like new Zealand but we are seen to have higher standards due to them having some expensive food scares. And whilst they are closer to the growth markets of south east Asia we are getting a small premium over them no matter where you are or who you sell to world price will bring you up and down its just a matter of getting a premium over world price.
Fixed milk price scheme helps but its only there to even out the volatility. Too many see it as a win or lose situation. If the farmer 'wins' every time the buyers will give up.