The Kingston story: Bidders fail to pay up for auctioned cows

paddysdream

coolshannagh28 wrote: »

A lot of what is on the thread is prurient rubbernecking ,the real question is what are the rights and wrongs of moral hazard ,it has been debated to death on other threads in relation to the bank and property crash but how will it affect farmers if dairy prices stay low and banks choose to exercise security on assets with strong emotional ties and follow through on recourse lending principles by selling off stock, machinery and family homes....

If people have such strong emotional ties to their land maybe they should exercise caution in using the self same land as collateral.
Many people seem to think giving land as security is just a paperwork exercise and the bank/lending institution will have no recourse to this when things go pear shaped.
I would think this attitude has become more prevelent in the last 20 or so years.Before that the deeds were minded and most farmers ambition was to live and see the day that they could reclaim them from the bank(well it was here anyways!!)
People who grew up before the 70's had much more regard for these things maybe because credit was dear and hard to get.
The prevelance of easily accessed credit and an obsession with levereging/sweating your assets to maximise your potential and keep up with the latest get rich scheme would look very iffy to those who actually sweated blood and tears to acquire the land in the first instance.
The average Irish farmer was ,for generations,a most risk averse,conservative,what we have we hold,keep your bills paid at any cost type of person.Whether this was a good ,bad or other idea is debatable but from this stems the reluctance to part with land and a suspicion of banks,credit and other "foreign" ideas.

Risk, expansion ,the NZagri /US business model and all it entails is all fine and dandy when it is looked at from afar but a rather different attitude is taken in those places to land etc.

paddysdream

coolshannagh28 wrote: »

Is a bank fund or institution Irish US or ootherwise which has been bailed out by state funds and forced to make provision for bad debt morally entitled to foreclose on a distressed asset such as a farm also bearing in mind that the majority of loans are being repaid in full

If you feel morality,fairness or other similar things apply in business then fair play to you.Any successful businessman I have ever met would cut your throat for tuppence whilst smiling and telling you what a nice decent fellow you are.

Or maybe its been my misfortune to meet a right shower of ho%rs throughout my life!!!!!!!!!!

freedominacup

coolshannagh28 wrote: »

Is a bank fund or institution Irish US or ootherwise which has been bailed out by state funds and forced to make provision for bad debt morally entitled to foreclose on a distressed asset such as a farm also bearing in mind that the majority of loans are being repaid in full

That's not the question I asked. Define or give your own definition of moral hazard.

Sam Kade

freedominacup wrote: »

That's not the question I asked. Define or give your own definition of moral hazard.

In economics, moral hazard occurs when one person takes more risks because someone else bears the cost of those risks.

coolshannagh28

freedominacup wrote: »

That's not the question I asked. Define or give your own definition of moral hazard.

IMO moral hazard occurs where an individual or similar is disadvantaged by another who is treated advantageously

farawaygrass

Buford T. Justice V wrote: »

Just as I didn't believe all the world was solid gold at 38c/l, I don't believe the world is sh!te now at 24c/l.

I agree with you completely there. It will no doubt come good again. But you couldn't pick up a paper last year and it was all about going at dairy, spend spend spend. China will pay for it all. Even the banks were only interested in dairy and I know that first hand. The whole thing was definitely similar to the housing bubble

Milked out

paddysdream wrote: »

If people have such strong emotional ties to their land maybe they should exercise caution in using the self same land as collateral.
Many people seem to think giving land as security is just a paperwork exercise and the bank/lending institution will have no recourse to this when things go pear shaped.
I would think this attitude has become more prevelent in the last 20 or so years.Before that the deeds were minded and most farmers ambition was to live and see the day that they could reclaim them from the bank(well it was here anyways!!)
People who grew up before the 70's had much more regard for these things maybe because credit was dear and hard to get.
The prevelance of easily accessed credit and an obsession with levereging/sweating your assets to maximise your potential and keep up with the latest get rich scheme would look very iffy to those who actually sweated blood and tears to acquire the land in the first instance.
The average Irish farmer was ,for generations,a most risk averse,conservative,what we have we hold,keep your bills paid at any cost type of person.Whether this was a good ,bad or other idea is debatable but from this stems the reluctance to part with land and a suspicion of banks,credit and other "foreign" ideas.

Risk, expansion ,the NZagri /US business model and all it entails is all fine and dandy when it is looked at from afar but a rather different attitude is taken in those places to land etc.

In those days, from what I hear as I'm only a young buck, the price of grain, milk or a bullock was commanding the same or more than what it would be today while all costs associated with producing them have sky rocketed. Even in the last 25 years 4 of us were put thru college and a man employed for a good number of years here off 80 to 100 cows in that time frame. Quota had to be bought No extra income. Now investment was curtailed due to all that, same parlour throughout that period and secondhand gear only ever bought with any extra building added slowly and a fair chunk done in house. But going forward I don't see 100 cows managing that tbh not with upgrading of facilities due to age etc and rising costs. Cost of production and cost of living rises all the time so depending on ones stage of life/ circumstances expansion may be the only way to standstill. Now I'm not talking about jumping to 600 cows bit still the extra 20 or whatever may make the difference. Getting the funding using land as collateral may be the only way to do it for some, I agree the emotional attachment shouldn't come into it so of it comes to bother selling land should not be an issue. Every case is individual but just because those before us may have blood sweat and tears put into it behind a horse or with their hands doesn't mean the current generation haven't but the emotional attachments must go or lesson at least

Sam Kade

farawaygrass wrote: »

I agree with you completely there. It will no doubt come good again. But you couldn't pick up a paper last year and it was all about going at dairy, spend spend spend. China will pay for it all. Even the banks were only interested in dairy and I know that first hand. The whole thing was definitely similar to the housing bubble

The banks weren't throwing money around like the celtic tiger days though, not aib anyway.

kowtow

coolshannagh28 wrote:

Is a bank fund or institution Irish US or ootherwise which has been bailed out by state funds and forced to make provision for bad debt morally entitled to foreclose on a distressed asset such as a farm also bearing in mind that the majority of loans are being repaid in full

Moral hazard is the risk that a bailed out bank (or a forgiven borrower) will - in future - invest and act as if there was no prospect of loss because a further bailout would be certain.

pedigree 6

I don't really get the bigger is better argument.
If you can keep costs down to as low as you can and do most of the work yourself repairs, building, buy simple secondhand milking machines, etc.
Now saying that I've got bigger by 50% than what I was when quotas were here.
But if you can keep as much money to yourself and do your own thing and not have borrowings to pay you should be fine.

Sam Kade

pedigree 6 wrote: »

I don't really get the bigger is better argument.
If you can keep costs down to as low as you can and do most of the work yourself repairs, building, buy simple secondhand milking machines, etc.
Now saying that I've got bigger by 50% than what I was when quotas were here.
But if you can keep as much money to yourself and do your own thing and not have borrowings to pay you should be fine.

When I mentioned simple secondhand milking parlours on here a few years ago I was laughed at. Everyone wanted nothing but the best with all the gadgets and gizmos and everything new.

Bass Reeves

Milked out wrote: »

In those days, from what I hear as I'm only a young buck, the price of grain, milk or a bullock was commanding the same or more than what it would be today while all costs associated with producing them have sky rocketed. Even in the last 25 years 4 of us were put thru college and a man employed for a good number of years here off 80 to 100 cows in that time frame. Quota had to be bought No extra income. Now investment was curtailed due to all that, same parlour throughout that period and secondhand gear only ever bought with any extra building added slowly and a fair chunk done in house. But going forward I don't see 100 cows managing that tbh not with upgrading of facilities due to age etc and rising costs. Cost of production and cost of living rises all the time so depending on ones stage of life/ circumstances expansion may be the only way to standstill. Now I'm not talking about jumping to 600 cows bit still the extra 20 or whatever may make the difference. Getting the funding using land as collateral may be the only way to do it for some, I agree the emotional attachment shouldn't come into it so of it comes to bother selling land should not be an issue. Every case is individual but just because those before us may have blood sweat and tears put into it behind a horse or with their hands doesn't mean the current generation haven't but the emotional attachments must go or lesson at least

When you go above 70-80 cows you need more than one labour unit. So expansion is self defeating to a certain extent. This is especially true at present as labour costs are rising. was discussing this lately with a lad that at present any lad that wants work has it if he is any good.

If family labour is available (kids in secondary school or college locally) it is possible to rise it is 100-120 cows. However after that you have to have good management skills. Nobody will watch your cows like yourself. This is why a lot of the lads milking large scale go for the hybrid cows as they are easier to manage.

This may be part of the issue here. I think a 500 cow pedigree herd is would take huge management skills. Very few pedigree herds go this this size. Trying to maximize pedigree sales off a herd this size would require a large skill set and huge energy and enthusiasm. You would want to live for nothing else. Ho cows require good management, trying to maximize the potential of a 500+ pedigree herds would be a massive task. Along with that you have a limited market in Ireland as these cows have limited appeal in Ireland.

pedigree 6

Sam Kade wrote: »

When I mentioned simple secondhand milking parlours on here a few years ago I was laughed at. Everyone wanted nothing but the best with all the gadgets and gizmos and everything new.

It's the way we've always done it and will continue to.
Bought our 8 unit parlour with feeders and augers in 2009 for e2500.
Bought the milk tank secondhand for e1000.
Should always use your head and do your own thing and not be influenced by other people but stand back and judge for yourself.

boggerman1

Sam Kade wrote: »

The banks weren't throwing money around like the celtic tiger days though, not aib anyway.

Banks may not be throwing around money but u couldn't escape the hype around "white gold" of milk.when u see the banks suddenly employing more Agri advisors than before it was like the housing bubble all over again.u were a nobody if u weren't getting into milk or blowing what u have out of the water.

mahoney_j

Bass Reeves wrote: »

When you go above 70-80 cows you need more than one labour unit. So expansion is self defeating to a certain extent. This is especially true at present as labour costs are rising. was discussing this lately with a lad that at present any lad that wants work has it if he is any good.

If family labour is available (kids in secondary school or college locally) it is possible to rise it is 100-120 cows. However after that you have to have good management skills. Nobody will watch your cows like yourself. This is why a lot of the lads milking large scale go for the hybrid cows as they are easier to manage.

This may be part of the issue here. I think a 500 cow pedigree herd is would take huge management skills. Very few pedigree herds go this this size. Trying to maximize pedigree sales off a herd this size would require a large skill set and huge energy and enthusiasm. You would want to live for nothing else. Ho cows require good management, trying to maximize the potential of a 500+ pedigree herds would be a massive task. Along with that you have a limited market in Ireland as these cows have limited appeal in Ireland.

100/120 cows with good yard facalities ,compact Spring calving is no problem for 1 person .good relief Milker for at least 2 mil kings a week from mid April on and a local eager student every Saturday during Spring is essential though .also contracting out as much slurry and fertliser as possible as well as the usuals like silage ,reseeding etc negates the need for expensive machines lying around the yard

pedigree 6

mahoney_j wrote: »

100/120 cows with good yard facalities ,compact Spring calving is no problem for 1 person .good relief Milker for at least 2 mil kings a week from mid April on and a local eager student every Saturday during Spring is essential though .also contracting out as much slurry and fertliser as possible as well as the usuals like silage ,reseeding etc negates the need for expensive machines lying around the yard

Is it truly one person though. Might be one person getting a wage but I doubt it's one person doing all the work. I was giving the cows boluses here with a headscoop and it's some help having someone help you wouldn't like to be doing it on my own. Even for mental health it's not good to be working on your own esp during a hectic calving season. Are you really managing 120 cows on your own in the spring seeing no one in the yard all day and night?

farawaygrass

Sam Kade wrote: »

The banks weren't throwing money around like the celtic tiger days though, not aib anyway.

A step back from the Tiger days but there was the same feeling about the whole think. One bank manager told me if I was dairying I would get the loan I wanted (Ulster bank)

Buford T. Justice XIX

pedigree 6 wrote: »

Is it truly one person though. Might be one person getting a wage but I doubt it's one person doing all the work. I was giving the cows boluses here with a headscoop and it's some help having someone help you wouldn't like to be doing it on my own. Even for mental health it's not good to be working on your own esp during a hectic calving season. Are you really managing 120 cows on your own in the spring seeing no one in the yard all day and night?

No wife and kids in the yard, jaysus, the peace is glorious:D

Muckit

Bass Reeves wrote: »

When you go above 70-80 cows you need more than one labour unit. So expansion is self defeating to a certain extent. This is especially true at present as labour costs are rising. was discussing this lately with a lad that at present any lad that wants work has it if he is any good.

If family labour is available (kids in secondary school or college locally) it is possible to rise it is 100-120 cows. However after that you have to have good management skills.

Expansion seems to be the only view at the moment for the future of farming regardless of enterprise. But if thought about logically how is that going to work? As you have said Bass, there is only so much a human can do until it becomes too much.

Also if every generation had to keep expanding or expand possibly twice in their career to keep viable, to follow to its logical conclusion, you would end up with a handful of factory farms supplying all agricultural produce in every country.

Can lads not see this? Its inevitable that more farms will get into financial difficulty as this continues. It only takes a few unseen or unprecedented events to f**k things up and send the train off the tracks.

Buford T. Justice XIX

Muckit wrote: »

Expansion seems to be the only view at the moment for the future of farming regardless of enterprise. But if thought about logically how is that going to work? As you have said Bass, there is only so much a human can do until it becomes too much.

Also if every generation had to keep expanding or expand possibly twice in their career to keep viable, to follow to its logical conclusion, you would end up with a handful of factory farms supplying all agricultural produce in every country.

Can lads not see this? Its inevitable that more farms will get into financial difficulty as this continues. It only takes a few unseen or unprecedented events to f**k things off the send the train off the tracks.

Some 145,000 dairy farmers in Ireland in 1973.
Some 17,000 dairy farmers in Ireland in 2016.

Tillage, pigs and cereal farms have similar or worse contraction in numbers. It will happen in beef as well, just when it will start is the question.

Many have said it before but I will repeat it. The only difference between 1820 and 2020 in Ireland is the numbers of landlords and tenants will be reversed.

Milked out

pedigree 6 wrote: »

Is it truly one person though. Might be one person getting a wage but I doubt it's one person doing all the work. I was giving the cows boluses here with a headscoop and it's some help having someone help you wouldn't like to be doing it on my own. Even for mental health it's not good to be working on your own esp during a hectic calving season. Are you really managing 120 cows on your own in the spring seeing no one in the yard all day and night?

Doing that here, obviously don't plan on it being long term but unfortunately getting to where I want to be is a time when most money is going out so taking someone on is difficult at this time. Getting the balance right when can be touch and go as taking someone on can lesson the workload but the wages going out may prevent other work which needs to be done from being carried out by reducing repayment capacity or whatever and an employee is the same as the bank loan it must be paid in good and bad years

mahoney_j

pedigree 6 wrote: »

Is it truly one person though. Might be one person getting a wage but I doubt it's one person doing all the work. I was giving the cows boluses here with a headscoop and it's some help having someone help you wouldn't like to be doing it on my own. Even for mental health it's not good to be working on your own esp during a hectic calving season. Are you really managing 120 cows on your own in the spring seeing no one in the yard all day and night?

This spring 90 calved in 10.5 weeks on my own ,have good parlour ,sheds ,crush facalities in yard and adequate housing .i bolused all the cows on my own after milking 10 days ago in 2.5 hours .outvof bed at 6.30 every morning and it's rare I'm I yard after 6.30',from now on it'll be 6 .i dread virtually no slurry ,no fertliser and dehorned no calves ,all contracted out .im a lazy fooker and refuse to be a busy fool ..my max cow nos will be 110 ,can't and won't afford any sort of regular labour so invested in yard facalities as well as grassland ,roads etc .i refuse to be a busy fool/slave and would class myself as a lazy fook .i do love working with and breeding good cows though.....

pedigree 6

Buford T. Justice V wrote: »

No wife and kids in the yard, jaysus, the peace is glorious:D

Everyone is aspiring to be a one man show but I think it can't be done.
Having 1.2 labour units at 140 cows does not automatically mean 120 cows can be done on 1 labour unit.
I know i'm coming from a straw bedded system and bedding by hand takes time.
But so does cleaning and liming cubicles, feeding cows silage, feeding calves, registering calves, calving cows, milking cows, cleaning yards, dealing with disease/ viruses, selling calves, etc, etc and on and on.
Can one man/ woman really do all this on their own with 120 cows or is this just teagasc talk. I believe it can't and you'll always need someone to give you a hand even for part of the day.

mahoney_j

pedigree 6 wrote: »

Everyone is aspiring to be a one man show but I think it can't be done.
Having 1.2 labour units at 140 cows does not automatically mean 120 cows can be done on 1 labour unit.
I know i'm coming from a straw bedded system and bedding by hand takes time.
But so does cleaning and liming cubicles, feeding cows silage, feeding calves, registering calves, calving cows, milking cows, cleaning yards, dealing with disease/ viruses, selling calves, etc, etc and on and on.
Can one man/ woman really do all this on their own with 120 cows or is this just teagasc talk. I believe it can't and you'll always need someone to give you a hand even for part of the day.

Yes they can but you need good facalities around yard ,good time management ,good attitude and cruically luck !!!.ive gone to more farm walks over last few years on a variety of different places ,big and small and took something from them all .somethings won't work for me like X breeding (don't want to start the war again!!!).i know my farm ,it's limitations and my own and try and implement some of those things I've picked up to improve .a lot have worked ,a lot have failed but what about it

pedigree 6

mahoney_j wrote: »

This spring 90 calved in 10.5 weeks on my own ,have good parlour ,sheds ,crush facalities in yard and adequate housing .i bolused all the cows on my own after milking 10 days ago in 2.5 hours .outvof bed at 6.30 every morning and it's rare I'm I yard after 6.30',from now on it'll be 6 .i dread virtually no slurry ,no fertliser and dehorned no calves ,all contracted out .im a lazy fooker and refuse to be a busy fool ..my max cow nos will be 110 ,can't and won't afford any sort of regular labour so invested in yard facalities as well as grassland ,roads etc .i refuse to be a busy fool/slave and would class myself as a lazy fook .i do love working with and breeding good cows though.....

Go to bed you've to be up in the morning.:D
Being fussy here but you should be including the brought in labour for spreading fert and slurry. Even though it's cost effective to get it contracted out in spring.
If you had someone in for a milking every day they would be included as labour so should be no difference for field work.
As I said there's no such thing as one labour unit on a farm you'll always need to call on someone sometimes.

Sheep breeder

i agree with mahoney the key is being a worker and more important being a learner, you have to improve on the small things and make life simpler and no your limits.
one of the best dairy man in our area milks 110 cows and has a neighbour to spread fert and a good contractor which he reckons is one of the main parts and he says the most important part is to manage animals and they will look after you.

Farmer Ed

You see the part here I think we are all missing is whether or not it is possible for one person to manage 120 cows on their own? The fact remains it takes more time to look after 120 cows than it does to look after 70. The question is as farmers are we going to be paid for that extra work? It is something we seem to have bought into hook line and sinker. We do all this extra work for very little or even less money.

Most other professions if they work overtime get paid time and a half. A lot of us are effectively salivating at the mouth at the idea of working extra hours for free or even taking a pay cut. Try selling that one to the Luas workers! We must surely be some gullible shower of ejits! I have have heard one farm consultant describe this irrational mindset by using the analogy of people getting carried away with comparing the size of their mickeys. Size is of no use if it doesn't reap any extra benefit. Infact it could end up weighing you down. Metaphorically speaking of course.

Sam Kade

mahoney_j wrote: »

This spring 90 calved in 10.5 weeks on my own ,have good parlour ,sheds ,crush facalities in yard and adequate housing .i bolused all the cows on my own after milking 10 days ago in 2.5 hours .outvof bed at 6.30 every morning and it's rare I'm I yard after 6.30',from now on it'll be 6 .i dread virtually no slurry ,no fertliser and dehorned no calves ,all contracted out .im a lazy fooker and refuse to be a busy fool ..my max cow nos will be 110 ,can't and won't afford any sort of regular labour so invested in yard facalities as well as grassland ,roads etc .i refuse to be a busy fool/slave and would class myself as a lazy fook .i do love working with and breeding good cows though.....

That's late 5.30 here.

st1979

Sam Kade wrote:

That's late 5.30 here.

Look on the UK forums and some of them like to be putting first cups on at 4.30am getting up at 3.30. On twice a day milking. Mental.

dev100

paddysdream wrote:

Rubbish. If I borrow your tractor and then refuse to give it back until it suits me should all my neighbours help and sympathise with me? Those Dutch "pricks" were doing their job same as the sheriff ,guards there on duty (pictures in paper) etc etc. And yes it prob. is coming to a townland near me. What should I do ?Stand in solidarity with someone who has messed about for years,paid no one they could avoid and when they couldn't avoid it,paid as little and late as possible? Not a hope .Genuine hard luck cases are very rare and they deserve help but people who borrow millions and then it all goes wrong ?Would people feel the same about all those builders/developers who went under a few years ago?Just cause its farmers that are feeling the cold wind of reality at this time is no reason to lose our reason

The same developers got a nice salary from nama to look after their bad debts.
The rule book rarely gets applied evenly in this country .

Sheriffs are just leeches no sympathy for them what so ever