Milk Price III

Farmer Ed

mahoney_j wrote: »

Not getting sucked in to this ed but contracts are essential ,just look over in the U.K. A year or 2 back ,there was a lot of farmers over there who would give there right arm for a contract[/quote

Like comparing apple's with oranges. Farmers over there did not have co ops who processed their milk like here, but were totally at the mercy of the likes of the tescos of this world. The idea of contracts was born out of a need to protect farmers who were supplying private milk purchasers. The very EU directive that proscribed contracts as a solution to the UK problem, clearly states that they should not apply to a relationship between a farmer and his or her co op .I don't know the grounds for the Germans legal opinion, but possibly that could have something to do with it. ICOS could yet possibly end up with egg on their face here if the Germans are proved correct.

Waffletraktor

Farmer Ed wrote: »

Like comparing apple's with oranges. Farmers over there did not have co ops who processed their milk like here, but were totally at the mercy of the likes of the tescos of this world. The idea of contracts was born out of a need to protect farmers who were supplying private milk purchasers. The very EU directive that proscribed contracts as a solution to the UK problem, clearly states that they should not apply to a relationship between a farmer and his or her co op .I don't know the grounds for the Germans legal opinion, but possibly that could have something to do with it. ICOS could yet possibly end up with egg on their face here if the Germans are proved correct.

It's the farmers without a tesco contract(via Muller iirc) that were in the poo.
Arla is the largest milk pool and a co-op, Muller are privately owned but had a good name so long as the supplier was aligned and signed up. It's the likes of first milk that was screwing it's members.
Though facts are easily brushed over to suit your narative if needed.

alps

The contract that farmer shareholders had with their coop was the ultimate contract. 
The coop was obliged to buy all of the milk from all of the cows the shareholder milked on the catchment area of the coop.

The coops were protected by quotas, in never being pressurised in fulfilling this contract.

But end of quotas ment these shareholder contracts became a huge liability. Hence the introduction of MSA, so suppliers would sign off in their rights under the original agreements.

This of course may have been a necessary move by processors, so as to limit and control this liability. It could be said that this ultimately would be to the benifit of the supplier. 

The unfortunate thing for me was that the farm organisations pushed for contracts, as being some form of security for the producer. But why, when the farmer already had the ultimate contract, with all the advantages, and none of the limitations. Was there too much compromise in our leadership who align to leadership roles for the principles at both sides of these contracts? 
We all lost so much by our capitulation...loss of rights, loss of bargaining power, loss of forced efficiency on the processor, loss of the high ground....
What a shame...

Farmer Ed

Waffletraktor wrote: »

It's the farmers without a tesco contract(via Muller iirc) that were in the poo.
Arla is the largest milk pool and a co-op, Muller are privately owned but had a good name so long as the supplier was aligned and signed up. It's the likes of first milk that was screwing it's members.
Though facts are easily brushed over to suit your narative if needed.

Am I right in saying that first milk were totally dependent on selling on their milk to third parties for processing? A contract that did not specify a price would not have protected UK farmers from anything. The UK set up has been a mess for a long time and should stand as a lesson to all of us how irrelevant farmers become.As numbers fall we become more and more irrelevant.

kowtow

Farmer Ed wrote:

Am I right in saying that first milk were totally dependent on selling on their milk to third parties for processing? A contract that did not specify a price would not have protected UK farmers from anything. The UK set up has been a mess for a long time and should stand as a lesson to all of us how irrelevant farmers become.As numbers fall we become more and more irrelevant.

My reading of the first milk situation is simply the effect of spot prices...

And spot prices are inevitable once the fixed price contracts have been used up. As discussed here many times the question for the coop movement is how - whether - perhaps to share the premium these contracts represent between smaller and larger, old and new, static and expanding suppliers..

In the end farmers can only receive a price somewhere between spot and the best fixed price in the market. Which farmers receive what has to be decided amongst the coops and their members.

My complaint with MSAS is not that they werent needed - something had to provide a post quota framework - but that they were presented as a "processor knows best" fait accompli.

I'm not persuaded that msa's gave anything to farmers that they didn't already have... but they certainly came with a cost. On that basis alone had their introduction been less patronising and more equitable all sides might be happier today.

Farmer Ed

kowtow wrote: »

My reading of the first milk situation is simply the effect of spot prices...

And spot prices are inevitable once the fixed price contracts have been used up. As discussed here many times the question for the coop movement is how - whether - perhaps to share the premium these contracts represent between smaller and larger, old and new, static and expanding suppliers..

In the end farmers can only receive a price somewhere between spot and the best fixed price in the market. Which farmers receive what has to be decided amongst the coops and their members.

My complaint with MSAS is not that they werent needed - something had to provide a post quota framework - but that they were presented as a "processor knows best" fait accompli.

I'm not persuaded that msa's gave anything to farmers that they didn't already have... but they certainly came with a cost. On that basis alone had their introduction been less patronising and more equitable all sides might be happier today.

Agreed and what did farmers get in return that they did not have already? That plus it was made clear at least in Dairygolds case that the MSA was being demanded by the banks. In short farmers were used by the Co Op as security with the banks. The quote the chairman "No more 100% mortgages are being given so contracts are needed by the banks"

freedominacup

alps wrote: »

The contract that farmer shareholders had with their coop was the ultimate contract. 
The coop was obliged to buy all of the milk from all of the cows the shareholder milked on the catchment area of the coop.

The coops were protected by quotas, in never being pressurised in fulfilling this contract.

But end of quotas ment these shareholder contracts became a huge liability. Hence the introduction of MSA, so suppliers would sign off in their rights under the original agreements.

This of course may have been a necessary move by processors, so as to limit and control this liability. It could be said that this ultimately would be to the benifit of the supplier. 

The unfortunate thing for me was that the farm organisations pushed for contracts, as being some form of security for the producer. But why, when the farmer already had the ultimate contract, with all the advantages, and none of the limitations. Was there too much compromise in our leadership who align to leadership roles for the principles at both sides of these contracts? 
We all lost so much by our capitulation...loss of rights, loss of bargaining power, loss of forced efficiency on the processor, loss of the high ground....
What a shame...

How many co-ops are processing milk? I know glanbia co-op has never processed a single litre.

alps

freedominacup wrote: »

How many co-ops are processing milk? I know glanbia co-op has never processed a single litre.

What I said above was that the coops were obliged to BUY all of the milk produced from all of the cows (that grazed land.....which is unusual) in the catchment area.

Many if not most coops process that milk, many just sell it on...

freedominacup

alps wrote: »

What I said above was that the coops were obliged to BUY all of the milk produced from all of the cows (that grazed land.....which is unusual) in the catchment area.

Many if not most coops process that milk, many just sell it on...

Which ones? Co-ops still are obliged to process shareholders milk I'm just curious as to what co-ops are still processing milk.

My milk goes to the private limited company GII who have no obligation whatsoever to process anyone's milk other than suppliers with an msa. GII shareholders voted in favour of this by a large majority. They seemed to be quite happy to introduce this situation.

Farmer Ed

http://m.independent.ie/business/farming/dairy/german-report-puts-spotlight-on-milk-supply-agreements-35649443.html

This is the actual article on the Indo. Looks like the Germans actually have a competition authority. The bit about having the price of milk agreed before collection is also contained in the EU legislation that the ICOS keep harping on about. It also clearly states that they should not apply to farmer owned co ops.

Actually can anyone list 3 positive things ICOS has done for farmers or the dairy industry over the past 10 years? Or what practical function does ICOS actually serve?

Actually you could ask the same question about our competition authority.

kowtow

I'm told by my coop that there is no legal obligation on a coop to collect milk from a geographical area.... which isn't to say that they won't.

How is the catchment area defined?

Farmer Ed

kowtow wrote: »

I'm told by my coop that there is no legal obligation on a coop to collect milk from a geographical area.... which isn't to say that they won't.

How is the catchment area defined?

Ask them for a copy of the rules. They are obliged to give them to you. Having read the rules I beg to differ with who ever told you that.

Water John

The broad rules of any coop, not necessarily milk, is that they provide a specific service to their members.
Quite often, this will be in an approximate geographic location. If a new person wants the service, the coop would survey if it is economic to provide it. They could in fact refuse new membership at that point, based on unrealistic cost.

Milk, in Ireland may in many cases not be processed by a coop. correct me if I'm wrong, but most farmers supply a coop, however.

It is interesting BTW, that many coop don't ask for exclusive service. I'm a member of Cork Coop Marts. They don't insist that, if I am selling cattle in a mart, that it has to be one of theirs.

I still believe that mainly the coop rules are sufficient to cover a shareholders milk sales to the coop. No need for MSA for that reason.
If there are other reasons, coops should, with transparency, state them.

kowtow

Water John wrote: »

The broad rules of any coop, not necessarily milk, is that they provide a specific service to their members.
Quite often, this will be in an approximate geographic location. If a new person wants the service, the coop would survey if it is economic to provide it. They could in fact refuse new membership at that point, based on unrealistic cost.

Yes, that was my assumption which is why I didn't press the point...

They've said in the past that they'll find a way to pick up our surplus if we want them to, and I'm more than happy with that - in fact I'm going to try and put arrangements in place for it this season. If there is any reasonably way I can make it more economic for them I will. In the meantime I continue to buy, as I always have, the huge majority of our inputs from them.

but I struggle with the idea either than they have a territory or that they would be obliged to accept any number of new producers in that territory and buy whatever they could produce.

Farmer Ed

kowtow wrote: »

Yes, that was my assumption which is why I didn't press the point...

They've said in the past that they'll find a way to pick up our surplus if we want them to, and I'm more than happy with that - in fact I'm going to try and put arrangements in place for it this season. If there is any reasonably way I can make it more economic for them I will. In the meantime I continue to buy, as I always have, the huge majority of our inputs from them.

but I struggle with the idea either than they have a territory or that they would be obliged to accept any number of new producers in that territory and buy whatever they could produce.

From memory the obligation to purchase milk applies to members only. However if they refused to collect anyone who was in their territory it would just draw attention to the fact that they actually have territory and in effect a possibly illegal gentlemen's agreement.

mahoney_j

Few posts deleted here I see ,did I miss something !!!!!

atlantic mist

the glanbia msa is a bit draconian for such a large organisation (future generations, all milk produced from land etc) and the EU version would have been more appropriate. Told me more about our management structure and strategy than anything else, they are old school and age profile has a lot to do with that. Head of strategy, ceo & board...age? all at latter end of career, will those who formulate/implement strategy be working/active in company in 5-10 years this effects their thinking, encourages shorter term thinking

MSA did reduced our ability to improve domestic price through increased competition when we had availability in processing just after quotas left, however currently processors are not able to handle milk going into them (lorries going everywhere) but under our MSA they must collect all our milk so its the other side of the knife now, suddenly our processors are able to pay for additional processing facilities from processor cash flow and were able to do this with close to 50% of product mix going to powder...doesnt add up, really would love to see actual set of our processor accounts

Farmer Ed

freedominacup wrote: »

Which ones? Co-ops still are obliged to process shareholders milk I'm just curious as to what co-ops are still processing milk.

My milk goes to the private limited company GII who have no obligation whatsoever to process anyone's milk other than suppliers with an msa. GII shareholders voted in favour of this by a large majority. They seemed to be quite happy to introduce this situation.

If you check the wording of the rules I am pretty sure it will say that the co op is obliged to purchase all members milk. They is no reference regarding their obligation regarding processing it so technically they could spill it if they wished, but they are obliged to purchase it and pay every member using the same method so as all profits should be shared fairly amongst members. Now that brings us to another grey area??

freedominacup

Farmer Ed wrote: »

If you check the wording of the rules I am pretty sure it will say that the co op is obliged to purchase all members milk. They is no reference regarding their obligation regarding processing it so technically they could spill it if they wished, but they are obliged to purchase it and pay every member using the same method so as all profits should be shared fairly amongst members. Now that brings us to another grey area??

I have no doubt that this is in co-op rules but I also have no doubt that much id not a majority of Irish milk is neither collected or processed by a co-op.

Farmer Ed

atlantic mist wrote: »

the glanbia msa is a bit draconian for such a large organisation (future generations, all milk produced from land etc) and the EU version would have been more appropriate. Told me more about our management structure and strategy than anything else, they are old school and age profile has a lot to do with that. Head of strategy, ceo & board...age? all at latter end of career, will those who formulate/implement strategy be working/active in company in 5-10 years this effects their thinking, encourages shorter term thinking

MSA did reduced our ability to improve domestic price through increased competition when we had availability in processing just after quotas left, however currently processors are not able to handle milk going into them (lorries going everywhere) but under our MSA they must collect all our milk so its the other side of the knife now, suddenly our processors are able to pay for additional processing facilities from processor cash flow and were able to do this with close to 50% of product mix going to powder...doesnt add up, really would love to see actual set of our processor accounts

Did you see the standard of auditing we have in this country as exposed by Johnathan Sugarman?

Milk always moved all over the place this time of year. I doubt if there is anywhere near a shortage of capacity. But they will try and justify their need to overspend.

If there is shortage of capacity why were they trying to steal supplier's from each other? Sure there is a lot of milk at the moment but they all seem to be looking for more. Have they a market for it is a totally separate question?

Buford T. Justice XIX

mahoney_j wrote: »

Few posts deleted here I see ,did I miss something !!!!!

Nope, we can see all the posts we delete and nothing showing up:)

alps

freedominacup wrote: »

I have no doubt that this is in co-op rules but I also have no doubt that much id not a majority of Irish milk is neither collected or processed by a co-op.

Arrabawn
Audio
Bandon
Dairygold
LacPatrick
Lakeland
Lee Strand
North Cork
Tipperary
All collect and process milk

Bandon
Barryroe
Drinagh
Lissavard
Own associated companies that process the milk

Boherbue
Maudabawn
Newtownsands
Fealsbridge
BUY and sell to a customer

Callen
Centenary
Mullinahone
Oldcastle
You might know what agreement these have with Gambia

Someone here might explain the Kerry set up. I've rand a Kerry supplier but he didn't know who he sells his milk to not who pays him, so a little confusing

And then we have glanbia suppliers who as you say supply a non coop...

Buford T. Justice XIX

alps wrote: »

Arrabawn
Audio
Bandon
Dairygold
LacPatrick
Lakeland
Lee Strand
North Cork
Tipperary
All collect and process milk

Bandon
Barryroe
Drinagh
Lissavard
Own associated companies that process the milk

Boherbue
Maudabawn
Newtownsands
Fealsbridge
BUY and sell to a customer

Callen
Centenary
Mullinahone
Oldcastle
You might know what agreement these have with Gambia

Someone here might explain the Kerry set up. I've rand a Kerry supplier but he didn't know who he sells his milk to not who pays him, so a little confusing

And then we have glanbia suppliers who as you say supply a non coop...

Kerry PLC own the stainless steel and buys and pays for the milk. One of the co-ops main responsibilities is in the management of its shares in the PLC. So Kerry is purely PLC.

whelan2

What's the story with Bellview?

ellewood

whelan2 wrote: »

What's the story with Bellview?

Dryer problem?
Supposed to b back up tomorrow

mahoney_j

Buford T. Justice V wrote: »

Nope, we can see all the posts we delete and nothing showing up:)

It's me needs my eyes checking chief ,couple of posts I thought were in this thread were actually in another !!!!

Fixture

ellewood wrote: »

Dryer problem?
Supposed to b back up tomorrow

That's same as I heard

boggerman1

Gdt up again today3.6%.22500 approx on offer.butter milk powder up 21.5% which prob boosted the average.butter up 1.5%,wmp up again too.#white gold. Ha ha

Buckmickley

At a meeting last night in Gorey,Board member John Murphy reckoned that our current milk price will stay or rise further this year
It's more likely to rise
Only 40% of suppliers are in fixed price schemes
So the vast majority are on Base price plus constituents

That's interesting

On the proposal we're voting on the 18th of may he said it needs 66% and it might not get it
It's worth about 15000 to the average shareholding
He said there will be further spin outs as the new entity will eventually buy the entire agri and milk business

There was something asked about too about an expensive law case involving the EU and Belview
Apparently the creation of the new entity will neuter this
The pension liabilities are also a serious matter,we are buying 60% of those but that elephant is unavoidable as there's already GIIL exposure albeit smaller but always there

freedominacup

Buckmickley wrote: »

At a meeting last night in Gorey,Board member John Murphy reckoned that our current milk price will stay or rise further this year
It's more likely to rise
Only 40% of suppliers are in fixed price schemes
So the vast majority are on Base price plus constituents

That's interesting

On the proposal we're voting on the 18th of may he said it needs 66% and it might not get it
It's worth about 15000 to the average shareholding
He said there will be further spin outs as the new entity will eventually buy the entire agri and milk business

There was something asked about too about an expensive law case involving the EU and Belview
Apparently the creation of the new entity will neuter this
The pension liabilities are also a serious matter,we are buying 60% of those but that elephant is unavoidable as there's already GIIL exposure albeit smaller but always there

So as far as Johnny can see it's all good? That's good to know. Very reassuring really.

Buckmickley

I see in the journal that Lakeland profits halved last year due to price support
God love them
I'd say most of that 60% of Glanbia farmers not in fixed schemes made a loss last year aswell as a good portion of those with paltry amounts in them who are probably part of the 40% statistic

The arrogance at times from our processors is incredulous

With the news this morning that after Brexit a large GB store is going to ban Irish produce,I'd be preparing new EU markets instead of crying about having to give a fairer proportion of what's got for our milk to those of us who do most of the hard work producing it

orm0nd

arrabawn paying 2c/ltr bonus on feb milk next year, no strings attached

alps

orm0nd wrote: »

arrabawn paying 2c/ltr bonus on feb milk next year, no strings attached

Short withold tubes allround me thinks

alps

Buford T. Justice V wrote: »

Kerry PLC own the stainless steel and buys and pays for the milk. One of the co-ops main responsibilities is in the management of its shares in the PLC. So Kerry is purely PLC.

Nosing around a bit more.....just to get a feel for how far removed from market the farmer has become.

Could I be correct in saying Kerry Agribusiness collects and pays for the milk...Kerry Creameries process the milk....

Both subsideries of the plc..

leg wax

glanbia price will be up this month to get the vote thru :rolleyes:

Buford T. Justice XIX

leg wax wrote: »

glanbia price up will be up this month to get the vote thru :rolleyes:

It'll force the rest up, too, hopefully

whelan2

leg wax wrote: »

glanbia price up will be up this month to get the vote thru :rolleyes:

By How much?

freedominacup

leg wax wrote: »

glanbia price will be up this month to get the vote thru :rolleyes:

There's no two ways about it that motion should be defeated in two weeks time. It'll be worth a hell of a lot more to dairy farmers than the spinoff over the next six months. Vote it through then if te want.

whelan2

freedominacup wrote: »

There's no two ways about it that motion should be defeated in two weeks time. It'll be worth a hell of a lot more to dairy farmers than the spinoff over the next six months. Vote it through then if te want.

Got a call today from farm services about the vote, I will be on holidays , so I wanted to send a proxy voter, no proxy votes allowed for this vote

Farmer Ed

leg wax wrote: »

glanbia price will be up this month to get the vote thru :rolleyes:

What happens when they run out of stuff to vote on?

Wildsurfer

Not a hope of an increase I'd say. iFA are only considering seeking a 1cent increase this month. They are usually looking for 5 before we get 1!

whelan2

What do ye think for April price?

pedigree 6

whelan2 wrote: »

Got a call today from farm services about the vote, I will be on holidays , so I wanted to send a proxy voter, no proxy votes allowed for this vote

I was just looking today at the coop shares being spunout into plc shares.
The way it's going with the cancelled shares i'll have none left in the coop.:pac:

GrasstoMilk

pedigree 6 wrote: »

I was just looking today at the coop shares being spunout into plc shares.
The way it's going with the cancelled shares i'll have none left in the coop.:pac:

Like a lot of prople I would imagine

pedigree 6

GrasstoMilk wrote: »

Like a lot of prople I would imagine

Did you hear the Farm Show on south east radio last Friday evening?

I missed it. Apparently they were talking about the upcoming Glanbia Vote.
And the Glanbia representative said if the vote went through that milk price would go up by 33 per cent?
I think the person who told me this must have meant 33 cent.

Anyway I thought it was amusing.
Same old same old about vote for this and get a better milk price. Ha!:pac:

Farmer Ed

pedigree 6 wrote: »

Did you hear the Farm Show on south east radio last Friday evening?

I missed it. Apparently they were talking about the upcoming Glanbia Vote.
And the Glanbia representative said if the vote went through that milk price would go up by 33 per cent?
I think the person who told me this must have meant 33 cent.

Anyway I thought it was amusing.
Same old same old about vote for this and get a better milk price. Ha!:pac:

How exactly can they explain how the vote could effect the milk price so quickly? I'm not a gill supplier so excuse my ignorance, but it sounds to me like there is an attempt being made to buy votes if promises like that are being made?

GrasstoMilk

pedigree 6 wrote: »

Did you hear the Farm Show on south east radio last Friday evening?

I missed it. Apparently they were talking about the upcoming Glanbia Vote.
And the Glanbia representative said if the vote went through that milk price would go up by 33 per cent?
I think the person who told me this must have meant 33 cent.

Anyway I thought it was amusing.
Same old same old about vote for this and get a better milk price. Ha!:pac:

I haven't got to go to any meetings about it and my knowledge on the vote is very poor. I think it will go through because lads will just be thinking about the money aspect.
I had a GIIL man at the table last week and he was advocating it will return the coop to more like it was 10 years ago, more farmer oriented. Instead of it just being for shareholders.
I don't know the whole ins and outs of it, others more in the know will tell me im sure if he was puffing smoke

alps

Little bit of light reading on March milk prices. It's beginning to frighten me as to the gap that is appearing between our prices and the likes of the Dutch....even the kiwis...

Would make you wonder why IF A currently only pushing for 1c increase....is our product mix that bad.?

Farmer Ed

As I said I'm not a gill supplier and haven't been following this. But am I right in saying that no matter if it is the co op or the PLC that own the processing facilities, the processed product will still have to be sold through the PLC. So in effect now the farmer is taking all the risk and costs involved in processing but has to sell all the processed milk products to the PLC, who in effect can pay the co op what ever they see fit as they are only answerable to the PLC shareholders? Or am I missing something here ?

kowtow

alps wrote:

Would make you wonder why IF A currently only pushing for 1c increase....is our product mix that bad.?

Are those figures available monthly or quarterly for the last couple of years?

Look for an inverse correlation between our volume relative to the rest of Europe and our price relative to the rest of Europe. If we are slipping more as relative volume increases it suggests that our product mix is not up to the job.

Bit tied up at grass this week but if the figures are around I'll try and have a look.