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

Milked out

Farmer Ed wrote: »

My apologies, maybe n future we should consider requesting boards to only accept posts that are submitted in the form of sworn affidavits.

Point is making an assumption that a large segment of farmers are expanding with their heads on the sand based on a chat with a serviceman or whoever is a bit much. Who knows what fellas reasons are for expanding, could be just wanting to, could be a son/ daughter joining, could be personal circumstance needing more in and expanding is their way of getting there. People saying everyone jumped on a bandwagon in a good year is the same as saying everyone is fcuked in the bad year, a big generalisation that doesn't hold water in my book

BoatMad

Sam Kade wrote: »

They were both buying for the father, the son said that his father was at the auction and buying. You'd think that they'd vet the bidders better in an auction like that. Either way both bidders didn't comply with the terms and conditions of the sale.

its rather strange that monies are available post the seizure that could have been accessed before the bank acted.

rather strange to act as a carpet bagger in that regard

Sam Kade

BoatMad wrote: »

its rather strange that monies are available post the seizure that could have been accessed before the bank acted.

rather strange to act as a carpet bagger in that regard

You'd want a fair chunk of money to buy 500 animals with no land or nowhere to milk them.

BoatMad

Sam Kade wrote: »

You'd want a fair chunk of money to buy 500 animals with no land or nowhere to milk them.

what I meant is that if the family could access that type of monies , why didnt they do so before the brown stuff hit the fan

Buford T. Justice XIX

BoatMad wrote: »

what I meant is that if the family could access that type of monies , why didnt they do so before the brown stuff hit the fan

The funds were the fathers pension. He is buying for his grandson rather than his son.

BoatMad

Buford T. Justice V wrote: »

The funds were the fathers pension. He is buying for his grandson rather than his son.

buying it for his grandson is simply a device to avoid the herd being seized again, his son has an outstanding judgement

but the point is that the individuals in question are prepared to part with substantial sums of money to " rescue " the herd . why didnt they offer before

longgonesilver

Sam Kade wrote: »

You'd want a fair chunk of money to buy 500 animals with no land or nowhere to milk them.

There is at least one rented farm. This talk of feeding 500 cows and followers on 170 acres is nonsense, The 170 acres is the home farm, the milking platform. Winter feed was grown off farm.

20silkcut

BoatMad wrote: »

AN industry that for years has been subject to both price controls and supply and demand intervention , is likely to have a rough time as its transitions to market pricing, The New Zealand experiment caused similar upsets.

Ultimately however , its the only way. the uneconomic producer goes out of business and the successful prosper. Those that cannot achieve successful economics, need to pivot or desist.

Farming is no different to any other business, its when it gets confused as to what it is , then the trouble starts

What this country needs right now is not more farmers who can efficiently and successfully produce more milk.
We need people who can sell milk and market milk and get it out of the warehouses.
Dairy expansion needs to be curtailed immediately and the funds and resources and time and effort put into serious marketing.
Then expand as the market requires thereafter.
What's happening now is cart before the horse stuff.

keep going

on the whole labour/how cows thing.my brother worked in england laying cable and the contract was paid by the metre.for the first 6 months they couldnt break 500 matres even though they were supposed to do 600 per week.as time went on but the by the time they were finished there was no week they didnt do a km each contract, the rate per metre crashed but the lads good at it made more.two points we are not the only people doing more for less. everything is in the technique when it comes to getting through work,it applies to shovling s%%t just much as to milking cows

Farmer Ed

Milked out wrote: »

Point is making an assumption that a large segment of farmers are expanding with their heads on the sand based on a chat with a serviceman or whoever is a bit much. Who knows what fellas reasons are for expanding, could be just wanting to, could be a son/ daughter joining, could be personal circumstance needing more in and expanding is their way of getting there. People saying everyone jumped on a bandwagon in a good year is the same as saying everyone is fcuked in the bad year, a big generalisation that doesn't hold water in my book

Read the link below.Seems incredible since there was no expansion there over the past 30 years. Don't get me wrong. I have the height of respect for the intellect of Kerry people. That worries me, if a Kerry man can get taken in by all the hype. Then it must have been a very well spun story. Don't get me wrong. Lets be clear. I am not anti expansion and I am not pro or anti big or small farmer. But the amount of hype that has been spun about the opportunities and the wealth that was going to be created in the dairy industry IMO has greatly contributed to the over supply we are seeing at the moment.

https://www.engineersireland.ie/groups/regions/cork/events/processing-capacity-expansion-in-the-dairy-industr.aspx#

BoatMad

20silkcut wrote: »

What this country needs right now is not more farmers who can efficiently and successfully produce more milk.
We need people who can sell milk and market milk and get it out of the warehouses.
Dairy expansion needs to be curtailed immediately and the funds and resources and time and effort put into serious marketing.
Then expand as the market requires thereafter.
What's happening now is cart before the horse stuff.

your answer is true and not so true

Milk is a commodity, when commodity prices fall, the only way to recover those prices is to either raise demand or cut production , This is true of oil juice and petrol

While marketing more milk is advisable, unless such marketing can make a significant difference on world markets , such that it raises demands to an extend that milk prices rise, then it risks just being a waste of money.

such marketing money of course essentially has to be found via the current costs if milk and the various profit margins. That may or may not make sense

If there are too many producers, and the prices falls, the answer is self evident

Sam Kade

longgonesilver wrote: »

There is at least one rented farm. This talk of feeding 500 cows and followers on 170 acres is nonsense, The 170 acres is the home farm, the milking platform. Winter feed was grown off farm.

But I never mentioned that they were feeding all the animals with the home farm only.

BoatMad

I may being devious here, but was the actions of the buyers a way of circumventing the enforced sale.

Milked out

Farmer Ed wrote: »

Read the link below.Seems incredible since there was no expansion there over the past 30 years. Don't get me wrong. I have the height of respect for the intellect of Kerry people. That worries me, if a Kerry man can get taken in by all the hype. Then it must have been a very well spun story. Don't get me wrong. Lets be clear. I am not anti expansion and I am not pro or anti big or small farmer. But the amount of hype that has been spun about the opportunities and the wealth that was going to be created in the dairy industry IMO has greatly contributed to the over supply we are seeing at the moment.

https://www.engineersireland.ie/groups/regions/cork/events/processing-capacity-expansion-in-the-dairy-industr.aspx#

Seeing as we export so much domestic oversupply has feck all to do with the price drop, it's a combination of EU adjustment post quota massive US increase in exports along with other countries and political interference in Russia along with collapse in grain and oil prices

Farmer Ed

Milked out wrote: »

Seeing as we export so much domestic oversupply has feck all to do with the price drop, it's a combination of EU adjustment post quota massive US increase in exports along with other countries and political interference in Russia along with collapse in grain and oil prices

That and some of our processors went mad spending like money was running out of fashion and now farmers will have to pay for it. As they say in Tesco. Every little hurts.

Irish milk supply has increased more than any country in the EU and our milk price has dropped more than any country in the EU. Just a pity a bit more market research wasn't done before everyone went a bit mad.

BoatMad

Farmer Ed wrote: »

That and some of our processors went mad spending like money was running out of fashion and now farmers will have to pay for it. As they say in Tesco. Every little hurts.

Irish milk supply has increased more than any country in the EU and our milk price has dropped more than any country in the EU. Just a pity a bit more market research wasn't done before everyone went a bit mad.

we irish do seem to have regulars runs of being " a bit mad ". Ive always claimed we are a bit of an over-addictive society

Milked out

Farmer Ed wrote: »

That and some of our processors went mad spending like money was running out of fashion and now farmers will have to pay for it. As they say in Tesco. Every little hurts.

Irish milk supply has increased more than any country in the EU and our milk price has dropped more than any country in the EU. Just a pity a bit more market research wasn't done before everyone went a bit mad.

Increased percentage wise, volume wise it's barely a drop.even compared to the Germans increase not a mind the US

Sam Kade

Farmer Ed wrote: »

That and some of our processors went mad spending like money was running out of fashion and now farmers will have to pay for it. As they say in Tesco. Every little hurts.

Irish milk supply has increased more than any country in the EU and our milk price has dropped more than any country in the EU. Just a pity a bit more market research wasn't done before everyone went a bit mad.

A drop in the ocean seeing that we only produce 5% of milk in Europe, we are after all a tiny island.

Farmer Ed

Milked out wrote: »

Increased percentage wise, volume wise it's barely a drop.even compared to the Germans increase not a mind the US

We took the biggest hit in price. That says something about our ability to sell the surplus product surely.In Spite of all the hype of high end, value added products.. It looks like the only plan was to make loads and loads more milk powder. Hardly the rocket science we were let to believe surely?

freedominacup

Sam Kade wrote: »

A drop in the ocean seeing that we only produce 5% of milk in Europe, we are after all a tiny island.

Problem is though Sam it's the 5% that has to find a home outside the EU. Always was. The eu was always self sufficient without our production iykwim. We created the oversupply. Another funny one was that the Dutch have /had as much milk available for export as NZ but you never hear anyone panicking that the Dutch are coming, the Dutch are coming in relation to world market prices. We're always told we have to price against the kiwis but never the much higher priced Dutch, funny that isn't it?

20silkcut

BoatMad wrote: »

your answer is true and not so true

Milk is a commodity, when commodity prices fall, the only way to recover those prices is to either raise demand or cut production , This is true of oil juice and petrol

While marketing more milk is advisable, unless such marketing can make a significant difference on world markets , such that it raises demands to an extend that milk prices rise, then it risks just being a waste of money.

such marketing money of course essentially has to be found via the current costs if milk and the various profit margins. That may or may not make sense

If there are too many producers, and the prices falls, the answer is self evident

If you had the choice between investing in a new dairy product company producing value added product in your local area that would give you a decent price for your milk or investing in expansion on your farm.
Which would you chose??

BoatMad

20silkcut wrote: »

If you had the choice between investing in a new dairy product company producing value added product in your local area that would give you a decent price for your milk or investing in expansion on your farm.
Which would you chose??

the answer isn't simple. If I was confident that at present milk prices I could increase production efficiently , or that such investment would allow me too compete at current prices , it might make sense

on the other hand if I was confident of the dairy product investment, that might make better sense

there no real correct answer

Buford T. Justice XIX

Farmer Ed wrote: »

Read the link below.Seems incredible since there was no expansion there over the past 30 years. Don't get me wrong. I have the height of respect for the intellect of Kerry people. That worries me, if a Kerry man can get taken in by all the hype. Then it must have been a very well spun story. Don't get me wrong. Lets be clear. I am not anti expansion and I am not pro or anti big or small farmer. But the amount of hype that has been spun about the opportunities and the wealth that was going to be created in the dairy industry IMO has greatly contributed to the over supply we are seeing at the moment.

https://www.engineersireland.ie/groups/regions/cork/events/processing-capacity-expansion-in-the-dairy-industr.aspx#

Why would expansion be needed up to now? Listowel was built with a certain processing capacity in mind. When the primary Brucellosis Eradication scheme was implemented, Kerry was the ONLY county where movement restrictions were in place at the time and Kerry suppliers were the first to suffer depopulations and loss of milking herds. Thus, when quotas were introduced in 1984, Kerry had a lower than expected dairy population and there was consternation that quotas were lower in Kerry because of this.

There was a marginal increase in quotas but insufficient in Kerry as elsewhere. When extra capacity was needed, Newmarket was bought and added a 20% surplus processing capacity to members.

In the first year post quotas, supply in Kerry was up 11% while the rest of the country was up c.20%. Now, it would be deemed deficient in management if Kerry didn't put in place additional processing capacity as it WILL be filled by suppliers in the near future. Indeed, there are plans and capacity on Kerry farms to increase supply as the ability and desire to build their businesses in in place in Kerry as in other farms all over the country.

Tbh, I don't understand the point you are trying to make here

Sam Kade

The new white gold is goat milk until everyone floods the market

http://www.agriland.ie/farming-news/you-can-make-a-living-off-goats-from-40-or-50-acres/

Farmer Ed

Buford T. Justice V wrote: »

Why would expansion be needed up to now? Listowel was built with a certain processing capacity in mind. When the primary Brucellosis Eradication scheme was implemented, Kerry was the ONLY county where movement restrictions were in place at the time and Kerry suppliers were the first to suffer depopulations and loss of milking herds. Thus, when quotas were introduced in 1984, Kerry had a lower than expected dairy population and there was consternation that quotas were lower in Kerry because of this.

There was a marginal increase in quotas but insufficient in Kerry as elsewhere. When extra capacity was needed, Newmarket was bought and added a 20% surplus processing capacity to members.

In the first year post quotas, supply in Kerry was up 11% while the rest of the country was up c.20%. Now, it would be deemed deficient in management if Kerry didn't put in place additional processing capacity as it WILL be filled by suppliers in the near future. Indeed, there are plans and capacity on Kerry farms to increase supply as the ability and desire to build their businesses in in place in Kerry as in other farms all over the country.

Tbh, I don't understand the point you are trying to make here

You have made my point for me. Kerry practically never filled its quota in 30 years of predominantly good milk price. Yet now as we enter more uncertain times. In the first year post quota even Kerry increases milk output by 11%.
Why didn't Kerry farmers decide to fill their quota when milk price was good? There was absolutely nothing stopping any individual farmer in kerry who wanted to do so, from expanding over the past 30 years and I'm sure some did. But the fact is collectively they didn't seem to have the desire to expand for whatever reason.

Now is it realistic to think that it is just a coincidence that they increased by that much last year or could it be that a lot of this extra milk production has been driven by hype? I think the kerry case study would suggest it is the latter. Can I repeat again my belief that Kerry people are as clever a bunch as you are ever likely to meet anywhere. It makes it all the more alarming that even they have got caught up in the hype.

Not to be getting of subject. The sad lesson here is that with rapid expansion comes enormous risk.

Farmer Ed

Sam Kade wrote: »

The new white gold is goat milk until everyone floods the market

http://www.agriland.ie/farming-news/you-can-make-a-living-off-goats-from-40-or-50-acres/

Great time to be getting out of goats

st1979

Farmer Ed wrote:

We took the biggest hit in price. That says something about our ability to sell the surplus product surely.In Spite of all the hype of high end, value added products.. It looks like the only plan was to make loads and loads more milk powder. Hardly the rocket science we were let to believe surely?

What about the UK. A very wealthy domestic which is not self sufficient in supply terms and unless your on a tesco contract or similar your price has more than halved. So all this crap talked about us not having developed export markets is just that.
World price sets everyone's prices unless you have import tariffs. Now with strong links to customers or niche products you may get a premium over world price but it will be linked to world prices.

Farmer Ed

st1979 wrote: »

What about the UK. A very wealthy domestic which is not self sufficient in supply terms and unless your on a tesco contract or similar your price has more than halved. So all this crap talked about us not having developed export markets is just that.
World price sets everyone's prices unless you have import tariffs. Now with strong links to customers or niche products you may get a premium over world price but it will be linked to world prices.

You make a valid point, but as far as I know in the UK a lot of milk is not processed by CoOps as we have here. A great example of what happens when the number of dairy farmers becomes so insignificant that no one cares if they go out of business or not. Hence the EU milk package, and supply contracts being introduced to protect farmers from processors who may just decide they no longer wanted their milk. Incidentally the same package says that contracts should not be used by CoOps.
But you are right. It would seem that extra Irish milk production will most likely end up on the world market. After they have paid to keep it in storage for God knows how long. All the more reason why some of our processors should not have gone mad spending multiple times the normal costs on plants they don't possibly even need and spinning all the stuff about infant formula and high end value added products. The truth is farmers must now pay for all the over elaborate waste that has been carried out by some of our CoOps at a time when they can least afford it. Lets be clear even if it is not itemised on you milk statement. The repayments for CoOp borrowings will ultimately have to come from the farmer.

the_syco

http://www.irishexaminer.com/video/news/peter-kingston-to-see-your-life-burnt-in-front-of-you-is-hard-392633.html

One New Land League member, who had come from Wicklow, berated a foreign bidder: “Did you come here to buy some cheap cows? How would you like it if I came to your country and did that to you?”

I wonder if either of the bidders have any ties to the Land League, and if the two bidders actually wanted to buy the cows at all? The above crap from the Land League will just mean that the farmer will get a bad price when the cows are slaughtered. Seems his father (unknown if part of the two bidders) had bid, but was unable to get a cash in time.

Also, from
http://www.irishexaminer.com/ireland/order-to-stop-disruption-of-auction-of-cattle-owned-by-irelands-fittest-family-392452.html

Counsel said the herd had lost all value as elite animals as the Kingstons had stopped recording or registering the animals which are prerequisites for any pedigree herd.

Seems their laziness shot themselves in the foot a long time ago.

If all of their cows were all still registered, I'd say the banks may have viewed the farm in a better light, as opposed to deciding to grab what's left of the farm, whilst they can.

http://www.independent.ie/business/farming/half-of-animals-bought-at-bankordered-auction-of-one-of-irelands-top-dairy-herds-have-to-be-resold-34631831.html

Many buyers were photographed by debt relief campaigners as they entered the farm for the auction.
Any foreign buyers who were identified by campaigners were verbally challenged on the roadway leading into the farm about their attendance at the asset sale.

Going forward, foreign investors may decide to not participate, meaning lower prices for the farmers. Like always, the only loser will be the person losing their farm; for they will get less.

=-=

The future of these sales looks bad.

Water John

It is a normal function of banking to address the issue of non performing loans.

Banks in normal circumstances should be agreeable to a write down if that makes the future of a business viable.
This is the principle that underpins debt restructuring; business examinership, personal insolvency.
Even banks themselves have been underwritten. If you applied strict, debtor must pay all his debts, capital and accumulated interest, all banks in Ireland would have been liquidated. AIB twice over.
No point in preaching moral hazard. Look at real life. Most don't set out with the intention or inclination not to pay back. S**t happens. That is part of the risk for both sides.

Remember banks are charging you interest on money printed by the ECB.

What level of writedown should a lender take?
Should there be an onus, to prove that the debtor is in an unrealistic situation?
Its why we have examinership on business. LG and also many developers and builders would not have resurrected themselves only that should practices were in place and are in fact a normal part of business finance.
Indeed examinership was written especially for LG in this country.

There is a wider societal interest to be taken into account.

The question is not if but how much of a write down should be acceptable or even imposed?
Remember many examinerships are done at 10 to 30 cent in the Euro.
In that way the small contractors are looked after to some extent also.