Milk Price III

rangler1

mahoney_j wrote: »

Big dairy area around here ,no new entrants in my locality but everyone increasing nos and output by 20/50% .land for rent scarce and making fancy money

Three dairy farmers looking to rent the rest of my farm already.:D

kevthegaff

mahoney_j wrote:

Nothing story really as a lot are not starting to calve now till early Feb ,I'm betting March figures will be up ,milk man telling me yesterday milk starting to pour in now

Was the only new entrant 10 yrs ago for processor, serious prices being paid, not sure is it sustainable

yewtree

Apparently the targets for 2020 will be easily meet, more dairy cows on the ground than expected. Even this year with such a poor price last year dairy calving are increasing.
Not in a huge dairying area but there seems to be a steady stream of new entrants. A lot of lads seem to be driving on aswell. In our DG a lot of lads will have doubled productionfrom 5 years ago

Timmaay

Farmer Ed wrote: »

http://www.agriland.ie/farming-news/irish-milk-production-continues-to-fall-in-2017/

After the expected increase as quotas were removed, is the mad rush to expand over? Dairy farmers are getting older and I'm not sure there is enough young people interested in this way of life? Was harvest 2020 just a wet dream? Or are the plans for 2025 just simply a disillusion ?

The harvest 2020 target will probably be hit in 2018. As mj and free said plenty of smaller lads getting out, but that is well made back by either 200cow greenfields or existing 100cow lads bumping up output by 50%.

The 2025 targets are a hell of a lot bigger a lottery in my view, from a technical ability point of view we would have no problems hitting them, even despite fragmentation in Ireland, there still are loads of decent 200ac blocks that could potentially milk 250cows etc, tillage ground and dry stock farmers converting over. I can't see any real positivity in the price of grain, or the suckler herd moving forward, so we'll continue to see greenfield milking platforms, contractor rearing, and tillage lads growing winter fodder for dairyfarmers. However the much much bigger hurdle in my view will be the likes of nitrates, and derogation, and likes of climate change obligations, all of these are proving to be hurdles in other eu counties, and there is no reason Ireland is going to get a free pass to drive on ahead.

And of course the average price of milk paid will hugely dictate expansion moving forward also!

Mooooo

It's labour will be the limiting factor. Tslk8ng to a few lads recently and plant hire crowds and local builders taking in lads again. 2 lads I know gone from farm work to building again

Buford T. Justice XIX

kevthegaff wrote: »

Was the only new entrant 10 yrs ago for processor, serious prices being paid, not sure is it sustainable

Yeah, land prices are going to limit expansion unless lads are willing to rent a long distance away from intensive dairy areas or go into contract rearing. And even then they would probably need large blocks of ground 30-40 acres+ with wintering facilities as you couldn't be bringing silage long distances and slurry back.

Some sort of collaborative farming will have to be done here if we want to have any hope of survival in our current structures.

Farmer Ed

Fair enough some herds will get very large. Some will even make a go of it. But some would seem to be doing stuff that is hard to see being sustainable long term. That coupled with the amount of grey heads at any farmers gathering you care to attend. Even if the heart is willing as people get older the flesh will become weaker. A 7% drop in February just two years away from quotas could well mean that a lot of the expansion has already happened. Sure there will always be exception's ,but the first year after quota removal was always going to see the biggest rate of increase. Was that level of increase ever likely to be sustained ?

Farmer Ed

Mooooo wrote: »

It's labour will be the limiting factor. Tslk8ng to a few lads recently and plant hire crowds and local builders taking in lads again. 2 lads I know gone from farm work to building again

Very hard the blame them if they get a nine to five job and better pay. The reality is farming is a low margin business that depends on cheap labour, be it family labour or hired help. Often possibility farmers don't value their own time enough either.

Kerry2016

Someone from Teagsc told me last week that all we can expect to get paid for our milk for the next 5 years is 30c/L so taking that into account how many cows do you think someone ought to be milking to make a good living out of farming?

Farmer Ed

Kerry2016 wrote: »

Someone from Teagsc told me last week that all we can expect to get paid for our milk for the next 5 years is 30c/L so taking that into account how many cows do you think someone ought to be milking to make a good living out of farming?

All depends on how profitable they are I would think? That is probably different for different farms and situations. Obviously it has to be worth your while. But no point in chasing numbers for the sake of it, if it is not profitable. In that scenario the more cows farmers milks the more money they lose. But I would say not one size fits all. Land, labour,milk price and overall costs will be the new quota.

Fixture

Icbf figures showed calving very slow to get going in Jan and early Feb. That's caught up now. March will be well up on last year.

Lots of lads expanding still. Be interesting to see how many go for AA and Hereford this year. Quite a swing away from black and white in 2016.

Farmer Ed

Fixture wrote: »

Icbf figures showed calving very slow to get going in Jan and early Feb. That's caught up now. March will be well up on last year.

Lots of lads expanding still. Be interesting to see how many go for AA and Hereford this year. Quite a swing away from black and white in 2016.

The more cows that slip in to march the more empty cows next year and with less replacements in the pipeline hard to see where all this extra expansion will come from ?

orm0nd

Farmer Ed wrote: »

The more cows that slip in to march the more empty cows next year and with less replacements in the pipeline hard to see where all this extra expansion will come from ?

unreal amount of heifer calves & bulling heifers being offered for sale,

maybe it's just fellows starting to realize that bigger numbers don't always mean more profit.

pedigree 6

Farmer Ed wrote: »

The more cows that slip in to march the more empty cows next year and with less replacements in the pipeline hard to see where all this extra expansion will come from ?

Don't always work like that.
You can pull the cows back a month with good management.

pedigree 6

orm0nd wrote: »

unreal amount of heifer calves & bulling heifers being offered for sale,

maybe it's just fellows starting to realize that bigger numbers don't always mean more profit.

Are ya buying or selling?:pac:

orm0nd

pedigree 6 wrote: »

Are ya buying or selling?:pac:

whatever there's a twist to be got,

turned a lot of stock since last Monday,

Farmer Ed

pedigree 6 wrote: »

Don't always work like that.
You can pull the cows back a month with good management.

Possibly but the average calving interval is well over a year. That would mean your average cow on your average farm is going to get a little bit later every year. Sure there are some doing better, but the average will determine the average national calving date.

Just a thought but I wonder how much this years slip in calving dates could be attributed to cows not being fed as much last year as farmers tried to cut feed costs as a result of low prices?

mahoney_j

Farmer Ed wrote: »

Possibly but the average calving interval is well over a year. That would mean your average cow on your average farm is going to get a little bit later every year. Sure there are some doing better, but the average will determine the average national calving date.

Just a thought but I wonder how much this years slip in calving dates could be attributed to cows not being fed as much last year as farmers tried to cut feed costs as a result of low prices?

My take on it ,calving date has moved more to early Feb on due to farmers managing herds better ,calving becoming more compact and more trying to calve cows to grass to reduce costs ,

Farmer Ed

mahoney_j wrote: »

My take on it ,calving date has moved more to early Feb on due to farmers managing herds better ,calving becoming more compact and more trying to calve cows to grass to reduce costs ,

Fair enough there will be exceptions but the average is what will determine milk supply at a macro level. That average is in the region of 396 days so march calving cows this year would be April calving cows next year.

https://www.icbf.com/wp/?p=2548

Timmaay

Farmer Ed wrote: »

Fair enough there will be exceptions but the average is what will determine milk supply at a macro level. That average is in the region of 396 days so march calving cows this year would be April calving cows next year.

https://www.icbf.com/wp/?p=2548

Jezz Ed yes OK your defo right, all us farmers are not arsed anymore and have stopped expanding, the one single month of statistics that buckles the trend definely proves expansion is over, we'll all go join you in your negativity now. So can we go back to the milk price now please.

Farmer Ed

Timmaay wrote: »

Jezz Ed yes OK your defo right, all us farmers are not arsed anymore and have stopped expanding, the one single month of statistics that buckles the trend definely proves expansion is over, we'll all go join you in your negativity now. So can we go back to the milk price now please.

I was only asking a question? The calving interval figures are from the ICBF and not mine. Don't shoot the messenger.

mahoney_j

Farmer Ed wrote: »

I was only asking a question? The calving interval figures are from the ICBF and not mine. Don't shoot the messenger.

Still taking nothing from it as no data from 15,16 and this spring

Farmer Ed

mahoney_j wrote: »

Still taking nothing from it as no data from 15,16 and this spring

Pulling back the average calving interval from 396 days to 336 days as has been suggested here would be highly unlikely, surely?

hurling_lad

Timmaay wrote: »

OK, take the glanbia price of 31c, that works out at 6.65e/kg of protein, and 2.89e/kg bf. In the below formula take A as your protein and B as your fat (both in %)


((((A x 6.65) + (B x 2.89))x1.035) - 4) x 1.054

In the above 1.035 is the density of milk, and 5.4 the vat rate.

I've fired this all into a spreadsheet (while I sit here wasting my morning at the mart ha), in this example I've put in my March figures of protein at 3.6, and bf at 4.2, and got out an expected price of 35.2c/L.

Feel free to correct me if I'm wrong with any of the above, I already see a small Rounding mistake of some sort, the base price should be working out bang on 31c, not the 31.1c ha.

https://docs.google.com/spreadsheets/d/196m044UJNmn-BQk7jgnYaVG2_7U2ZdI1a9JW5kQLATE/edit?usp=drivesdk

Injuryprone wrote: »

Hate to be the pedantic pat but it's actually 665 e/kg of protein and 289 e/kg of bfat.

What i never could figure out is how they come up with those 2 figures. For example, for a basic price of 31c, Dairygold pays 639 e/kg protein and 315 e/kg bfat

Timmaay wrote: »

Yeh your right, I got lazy and left it as 6.65 and 2.89 because it conveniently cancelled out the divide by 100 in the protein and fat percents ha.

On how it's calculated, Glanbia have a fixed pr to bf price ratio of 2.3, we already have one formula of milk price = a+b-c (were c is always 4c/l), using the ratio above, our 2nd formula is a/b =2.3. When glanbia decide it will set a milk price of 31c, all they need to do is put that into the 1st formula, and then solve for a and b using the 2 formulas above.

And of course, the price of 31c is actually with the vat refund amount included, Glanbia only have to cough up 29.3c for each litre, the tax man gives us the other 1.7c, it sounds much better from Glanbias front that we are being paid 31c and not 29.3c though ha.

That's a brilliant reply to my original query thanks Timmaay. In my first stab at calculating this, I wasn't excluding VAT properly.

*snip*

cute geoge

Isn't it some fuk up we can not calculate what we get for our milk without having to resort to algebra .We could be conned a couple of cent a litre for our milk and we could not even prove it .
Is there any simple system to calculate to double check the price on our statements.
I can understand you multiply total litres X 1.0297 to get total of kgs of milk
What i cannot figure is how to convert cent / litre to cent per kg

hurling_lad

cute geoge wrote: »

Isn't it some fuk up we can not calculate what we get for our milk without having to resort to algebra .We could be conned a couple of cent a litre for our milk and we could not even prove it .
Is there any simple system to calculate to double check the price on our statements.
I can understand you multiply total litres X 1.0297 to get total of kgs of milk
What i cannot figure is how to convert cent / litre to cent per kg

The nub of the problem is that we have maintained c/L incl VAT at standard solids as the 'headline' milk price instead of €/KG protein and fat which is what we are actually paid for nowadays. That adds several unnecessary figures (namely the milk density, the VAT rate and the standard % P and F) into the calculation of actual milk price for given solids.

One reason that the processors would be slow to change at the moment is that they absorb any increase that the government puts on the VAT % themselves rather than passing it on to the farmer as they would have to if they quoted the Protein/Fat price excluding VAT.

*snip*

cute geoge

An A1 genuine farmer told me last year that his price/litre was calculated incorrectly by the creamery and he was refunded what was due but how the hell he could work it out is beyond me!!!

P.s. kerry claim to have paid 31cent/litre for feburary but in fact that would include a bonus of 0.4 cent for scc less then 200

Farmer Ed

cute geoge wrote: »

Isn't it some fuk up we can not calculate what we get for our milk without having to resort to algebra .We could be conned a couple of cent a litre for our milk and we could not even prove it .
Is there any simple system to calculate to double check the price on our statements.
I can understand you multiply total litres X 1.0297 to get total of kgs of milk
What i cannot figure is how to convert cent / litre to cent per kg

And the more and complex ways they can figure out to pay for our milk , the harder it will be for farmer's to compare the performance of different processors.

Wildsurfer

Have worked on this since Original question was raised. Easily enough worked out on Dairygold statement as they give the price per .1% protein and B'fat on the milk statement. So its just a case of a few simple calculations. Example: Farmer has protein of 3.47 and Butterfat of 4.26.

A(.347 X .6581) = .22836
+
B(.426 X ..3248) = .13836
= .36672
-
C(.04) = .32672
+Bonus = .005
= .33175
+vat@5.4%. = .01791
= .3496

Buford T. Justice XIX

A small rise forecast in GDT tomorrow.

http://www.farmersjournal.ie/dairy-markets-hopes-of-price-rise-at-gdt-267350

boggerman1

Gdt up 1.6% at latest auction.smp down 0.8% but wmp up slightly.

Kerry2016

With the average age of farmers being around the 60 mark in Ireland it's tough to see how we as a country will continue to increase milk production. Even for people converting to dairying from beef or tillage, they don't have a whole pile of incentive when there is only a few cents a litre of a profit margin.

I read some of the above posts where someone arose the idea that maybe their Co Op might try dodge paying as much for their milk as they are suppose to. I find such a situation highly unlikely to ever occur

Water John

One thing for sure, you won't be overpaid.

The part time boy

Kerry2016 wrote: »

With the average age of farmers being around the 60 mark

Do you have a sourse for that stat ?

Kerry2016

The part time boy wrote: »

Do you have a sourse for that stat ?

The Farmers Journal

The part time boy

I am surprised at that stat tbh.

When I was in my mid teens ( all of nearly 25 years ago , jesus !) all I used to hear was there no young farmers coming up and all the Farmers are too old.

All them old farmers have passed away or not farming anymore and yet here we are with still farmers around.

The anomaly is because farmers dont retire and the next generation don't get handed over the reins untill they are older it causes the avarge age to be high. I would not have taugh it was in the 60 though . Be interested how the journal got that stat.

Water John

Because the number of dairy farmers have been dropping rapidly, it means less young people are entering than are retiring out the other end.
That skews the stats upwards. Like three 70 year olds retiring, for one 20 year old starting.

freedominacup

Water John wrote: »

Because the number of dairy farmers have been dropping rapidly, it means less young people are entering than are retiring out the other end.
That skews the stats upwards. Like three 70 year olds retiring, for one 20 year old starting.

I'd say the number of people taking up a career in dairy farming has been pretty steady over the past 40 years. Probably fell away a bit in the early noughties but rose a bit over the past few years to balance it out.

The part time boy

Water John wrote: »

Because the number of dairy farmers have been dropping rapidly, it means less young people are entering than are retiring out the other end.
That skews the stats upwards. Like three 70 year olds retiring, for one 20 year old starting.

There less farmers because a 20 cow herd is no longer viable for a full time income.

Farms have got bigger to survive. Survival of the fitest and all that.

Now are we going down the right road that farms have time get bigger and we end up with factory farms ? That's a different discussion but that what has happened over the last 30 years.

To say there no young farmers and the future dead I think his very overly negative.

There some very good young farmers out there and I think the future is bright.

Depends how you look on life I guess

kevthegaff

In this parish when I began me and my friend were the only dairy farmers under 25, ten years later... I'm the second youngest dairy farmer.. still( big dairy area)

kowtow

The part time boy wrote:

There less farmers because a 20 cow herd is no longer viable for a full time income.

That's the essence of it. The more meaningful figure would be the average age of a farmer farming farms around the median size.... although even that would be skewed by family farms where the herd number remains in the elder generations name often for perfectly sound reasons.

Articles quoting the high age of farmers are almost always seeded by press releases from organisations promoting land transfer incentives, selling or proposing regulation requiring additional educational qualifications, advising on land transfer etc... or advocating tax incentives.

Which is all well and good, but I don't think we're going to suddenly run out of either farmers or food, we've more than our fair share of both.

Kerry2016

Milk production has to tail off if you think about it

Young people not wanting to go farming leads to less farmers which leads to less milk. Simple

This is not to say that farming is doomed or anything, just because there's less people farming doesn't mean we'll be any worse off, probably the opposite actually

I wouldn't put the average age of Irish farmers being high down to any conspiracy either, there really is very few young people taking it up or at least that's the case here

And no offence to anyone with a 20 cow herd but being tied down having to milk 20 cows morning and evening is surely a waste of any mans time?

The part time boy

I must live in a not avarge area. On our road there 8 active farmers .

20-30 = 1
30-40 = 4
40 -50 = 1
50 - 60 = 1

The 50 guy has a 25 year old son involved.

4 of the guys in the first two ranges are farming with older farmers but the younger guys has taken the lead.

So if we looked at the road on paper we could easily count the 4 lads that's have taken the lead as older farmers if we include the older farmers . There also 3 lads in there 70 's on the road who don't farm there land and is rented out .

So on paper can paint a very differnt piture

kowtow

Kerry2016 wrote: »

Milk production has to tail off if you think about it
..

And no offence to anyone with a 20 cow herd but being tied down having to milk 20 cows morning and evening is surely a waste of any mans time?

Absolutely. Which is why my relentless pursuit of efficiency is taking me up to 24.

Farmer Ed

Hopefully now we won't see prices fall at the end of 2017 a some had worried about. http://www.agriland.ie/farming-news/prices-continue-to-climb-at-the-latest-global-dairy-trade-auction/


Also in another artical. Teagasc recon 90k a year profit is a reasonable target at 29.5c even after renting land and paying for labour ?

Can we expect a shortage of teagasc advisers as they all jack in their jobs to become dairy farmers themselves?

Water John

Well a fella on Agriland, I think, organic, had his break even as 30c/litre.
Don't think there is a massive discrepancy between mainstream and organic.

Farmer Ed

Water John wrote: »

Well a fella on Agriland, I think, organic, had his break even as 30c/litre.
Don't think there is a massive discrepancy between mainstream and organic.

I know a very good organic farmer who tells me his costs are comparable to conventional. It would seem use of on farm inputs are critical so no fertilizer bill helps compensate for other losses. I also know an organic grain grower who told me his gross margin before bfp for 2016 was 700 euro per acre. Supplying Flavin's with organic oats as well as feed to other farmers.

I know very little about grain growing, so I am just telling you what the man told me. I could be wrong but he didn't appear to be Willy waving. At least if he was it wasn't visible.

hurling_lad

Kerry2016 wrote: »

Milk production has to tail off if you think about it

Young people not wanting to go farming leads to less farmers which leads to less milk. Simple

This is not to say that farming is doomed or anything, just because there's less people farming doesn't mean we'll be any worse off, probably the opposite actually

I wouldn't put the average age of Irish farmers being high down to any conspiracy either, there really is very few young people taking it up or at least that's the case here

And no offence to anyone with a 20 cow herd but being tied down having to milk 20 cows morning and evening is surely a waste of any mans time?

In recent years, there has been a decrease in the number of dairy farmers (as older farmers with smaller holdings retire), but milk production is increasing at double digits every year. The only limiting factors to milk production in the country, as I see it, are land availability and staff availability.

No matter what way you look at it, dairying is the most lucrative use for most of the land in the country, so milk production is likely to continue to increase.

Kerry2016

hurling_lad wrote: »

In recent years, there has been a decrease in the number of dairy farmers (as older farmers with smaller holdings retire), but milk production is increasing at double digits every year. The only limiting factors to milk production in the country, as I see it, are land availability and staff availability.

No matter what way you look at it, dairying is the most lucrative use for most of the land in the country, so milk production is likely to continue to increase.

In Ag College we were told that if you are someone that's turning your farm into a dairy farm you'd need to be starting with at least 90 cows for it to be worthwhile… if you were in a greenfield site you can take it for granted it would cost €5,000/cow to start the whole thing off, you'd have a lot of cows milked by the time you'd the initial outlay paid off. Would someone in good land not be better off farming part time with some dry cattle and letting them run and then having a full time job as well

Farmer Ed

Kerry2016 wrote: »

In Ag College we were told that if you are someone that's turning your farm into a dairy farm you'd need to be starting with at least 90 cows for it to be worthwhile… if you were in a greenfield site you can take it for granted it would cost €5,000/cow to start the whole thing off, you'd have a lot of cows milked by the time you'd the initial outlay paid off. Would someone in good land not be better off farming part time with some dry cattle and letting them run and then having a full time job as well

Funny how some teagasc advisers do exactly that.