Milk Price III

White Clover

alps wrote: »

Arrabawn have suppliers in west Limerick with years.......thats a pretty short run into Kanturk

Anytime I've seen an arrabawn truck leaving kanturk, it has been heading south.
What possibly happens is, if there's 3 loads to be collected, 2 loads are taken into kanturk and the final load is taken back to nenagh?

Shur, the milk arrabawn are collecting near millstreet, when dairygold were collecting that it was going to kanturk too!

Mooooo

With the motorways these distances are covered fairly fast. Shir during the winter milk would be heading on all directions from here in mid cork up to nenagh ballyraggart our driver even went to lakelands I think 2 years ago

White Clover

Mooooo wrote: »

With the motorways these distances are covered fairly fast. Shir during the winter milk would be heading on all directions from here in mid cork up to nenagh ballyraggart our driver even went to lakelands I think 2 years ago

Heading to nenagh from kanturk, you're 40 miles from a motorway.
I presume it's in winter time you're talking about traveling long distance? Probably 1 load per day?

Water John

See their worried that Glanbia Coop have too much say in Glanbia. That's a joke, as the price they have been paying shows.

Farmer Ed

Interesting bit in the indi today..
Seemingly the Germans agree that the MSAs are Allegedly, illegal. ..But ICOS say they protect Farmers. Who do you believe?

mahoney_j

Farmer Ed wrote: »

Interesting bit in the indi today..
Seemingly the Germans agree that the MSAs are Allegedly, illegal. ..But ICOS say they protect Farmers. Who do you believe?

I'm quite happy to have a signed msa with my coop and that I'm guaranteed they will collect it .....im also happy I've a portion of milk fixed with said coop which guarantees me a minimum price for it for next 3 years

Farmer Ed

mahoney_j wrote: »

I'm quite happy to have a signed msa with my coop and that I'm guaranteed they will collect it .....im also happy I've a portion of milk fixed with said coop which guarantees me a minimum price for it for next 3 years

Mahoney in all fairness unless you have looked down the barrel of a gun at a Dairygold or a Glainbia contract. You have no idea what one of them even looks like. Arrabawns contract is just a relationship. The other two are full blown marriage where your spouse gets to lock the door should you try to escape.

Interesting the Germans view all the same.

mahoney_j

Farmer Ed wrote: »

Mahoney in all fairness unless you have looked down the barrel of a gun at a Dairygold or a Glainbia contract. You have no idea what one of them even looks like. Arrabawns contract is just a relationship. The other two are full blown marriage where your spouse gets to lock the door should you try to escape.

Interesting the Germans view all the same.

Seen both ,didn't study them in huge detail ,Arrabawn's is much more straight forward and fair imo .contracts are essential tho for both ,as me a farmer that I know my milk will be collected and paid for and coop that they have milk to process and a products to sell to markets

Farmer Ed

mahoney_j wrote: »

Seen both ,didn't study them in huge detail ,Arrabawn's is much more straight forward and fair imo .contracts are essential tho for both ,as me a farmer that I know my milk will be collected and paid for and coop that they have milk to process and a products to sell to markets

I think possibility you should have a read of the co op rules while you are at it. Co ops have been legally obliged to take all members milk as far back as 1893. So to be fair this bit about milk not being collected was always a red herring. No fear of co ops running out of milk to fill contracts anytime soon either. Just look at all the over supply in storage.

But I suppose the question here is . what if the Germans are correct? What are the implications here?

mahoney_j

Farmer Ed wrote: »

I think possibility you should have a read of the co op rules while you are at it. Co ops have been legally obliged to take all members milk as far back as 1893. So to be fair this bit about milk not being collected was always a red herring. No fear of co ops running out of milk to fill contracts anytime soon either. Just look at all the over supply in storage.

But I suppose the question here is . what if the Germans are correct? What are the implications here?

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

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?