Milk Price III

Farmer Ed

Apparently there's a new market opening up for antifreeze in hell. IFA are reported on Agriland as having a problem with the new proposal. Well at least the need to buy feed part of it. Interesting times.

George Sunsnow

whelan2 wrote: »

Aye, for that reason I'm out

Yeah I'm not going into the 5 year fixed thing either for the reasons stated but I'd imagine those going into this one like the last 12 month one will get larger or generous allocations due to the lack of demand

whelan2

I wonder will there be much uptake on the feed part

Farmer Ed

K.G. wrote: »

Farmer Ed wrote: »

Just supposing a co op is making a return from product of x then how will this effect milk price using 2 different payment scenarios.

Co op can return 25 cent and 10% is fixed at 31cent. Then the farmer will get 31cent for 10% and 24.33cent for the remaining 90% of the milk. But the average is still 25 cent

Co op can return 40 cent and 10% fixed at 31 cent the remaining 90% would be paid for at 41cent. But the average is still 40 cent.

Of course there are many other different scenarios that would see some farmers fixed and some farmers not, but at the end of the day unless the Co op has a five year fixed price contract themselves with their customer's as a direct result of fixing the price with farmers, the amount of money available to the Co op to pay the farmers for milk is totally unaffected by fixing a percentage of the farmers milk price.

So my question? How is this being sold as something that is going to guarantee more money in farmers pockets in times of poor milk price? At best its farmers betting against farmers.
The pot that the Co op has to share amongst farmers will remain the same. The only thing that will change is how its divided.

So really all your saying is fixed price has no effect on the price paid for the other milk other than to extagerate the highs and lows and dosent result in farmers being paid less for their milk.

What I am saying is that it is not on average putting any extra money in to farmers pockets during highs or lows as the pot of money to be shared by the Co Op amongst farmers will always be the same. But it is a very clever way of getting farmers to sign up to a five contract.

What it will also do is create a situation where there will be winners and losers as farmers bet against each other.

I think John B struck the nail on the head when he said the only way to make every farmer happy was to give evey farmer a bit more that the other farmers.

K.G.

Farmer Ed wrote: »

What I am saying is that it is not on average putting any extra money in to farmers pockets during highs or lows as the pot of money to be shared by the Co Op amongst farmers will always be the same. But it is a very clever way of getting farmers to sign up to a five contract.

What it will also do is create a situation where there will be winners and losers as farmers bet against each other.

I think John B struck the nail on the head when he said the only way to make every farmer happy was to give evey farmer a bit more that the other farmers.

Its just that i thought you argued before that fixed price schemes resulted in non fixed milk subsidising the fixed but i could be wrong.no big deal anyway

Farmer Ed

K.G. wrote: »

Farmer Ed wrote: »

What I am saying is that it is not on average putting any extra money in to farmers pockets during highs or lows as the pot of money to be shared by the Co Op amongst farmers will always be the same. But it is a very clever way of getting farmers to sign up to a five contract.

What it will also do is create a situation where there will be winners and losers as farmers bet against each other.

I think John B struck the nail on the head when he said the only way to make every farmer happy was to give evey farmer a bit more that the other farmers.

Its just that i thought you argued before that fixed price schemes resulted in non fixed milk subsidising the fixed but i could be wrong.no big deal anyway

If you care to look at the two scenarios I just gave you there, it clearly shows that is what they exactly do. In the absence of the Co Op forward selling product that directly correlates to the fixed price milk. Fixed schemes are simply a system where the lower priced milk subsidies the price of the higher priced milk. In theory the average price paid should still be the same so the average farmer has no extra money. But it may give the farmer the illusion he/she might be getting a little bit more than his/her neighbour and so proves the John B Keane theory of rural economics.

whelan2

Lacpatrick up 1.5 cpl

Water John

Funny to see the piece on new prices on last week's IFJ. They documented all the rises and to what price, but then left out the price being paid by WC. They have to be gentle and not hurt other processors feelings.

Farmer Ed

https://www.glanbiaingredientsireland.com/news/glanbia-ingredients-ireland-launches-wexford-cheese-plant-upgrade

Very interesting that they are proposing to make 100% GM free cheese? Obviously there is a market for GM free grass fed. A lot of people said it couldn't be done. A lot of people even got upset at the suggestion. Wonder will the milk suppliers get much of a premium?

whelan2

Anyone else's glanbia connect playing up? Mines not showing the months figures.

whelan2

Was there due to be a milk auction today? Or does it matter?

Buford T. Justice XIX

whelan2 wrote: »

Was there due to be a milk auction today? Or does it matter?

None today, next one is 5th Sept.

I think there is only 2 auctions/month?

https://www.globaldairytrade.info/en/gdt-events/calendar/

Farmer Ed

http://www.independent.co.uk/life-style/health-and-families/low-fat-diets-kill-you-study-food-drink-eat-health-barcelona-cardiology-canada-a7918666.html Still looking good for butter and red meat.

whelan2

What's the story with the Glanbia share price , down over 20% or 4 euro/share since January. Down 2 euro in the last month. From 19.48 in January to 15.49 today. How much have we lost out on since the share spin out? Kerry meanwhile are up 2 euro/share in the last month and level with what it was this time last year... Why?

rangler1

whelan2 wrote: »

What's the story with the Glanbia share price , down over 20% or 4 euro/share since January. Down 2 euro in the last month. From 19.48 in January to 15.49 today. How much have we lost out on since the share spin out? Kerry meanwhile are up 2 euro/share in the last month and level with what it was this time last year... Why?

Same as any market, there's more shares for sale than there is demand for.

Water John

I think Whelan can manage to work that out, herself. The question is why, one food ingredient company is going up in value whilst another is declining?

One would expect them both to be largely going in the same direction, even if one was out performing the other.

rangler1

Water John wrote: »

I think Whelan can manage to work that out, herself. The question is why, one food ingredient company is going up in value whilst another is declining?

One would expect them both to be largely going in the same direction, even if one was out performing the other.

If it was that easy read the stockmarket we'd be all at it
Most shareholders never milked a cow, Maybe spun out shares are being sold...could be any reason people are losing confidence. stock market is very fickle and supply and demand ....

kowtow

Water John wrote: »

I think Whelan can manage to work that out, herself. The question is why, one food ingredient company is going up in value whilst another is declining?

It depends whether one or other of them was over or under priced.

freedominacup

kowtow wrote: »

It depends whether one or other of them was over or under priced.

You can't just drop that there and walk away. You have your homework now for the weekend. We'll expect a thorough analysis by Monday.

Farmer Ed

I had shares in a company that I'm not allowed to mention here. Had a face value of one euro each and were being touted as something that would go up in value. Long story short. Company folded and by the time all the debts were paid and another company I have shares in had to borrow more money and find creative ways of extracting money from suppliers to try and cover up the mess. The value of the shares was something like 7 cent per share by the time everyone had been paid off. Company lost in the region of 400m and the same PR company is still selling the dream for the parent company.

Do know much about stock markets. But I know enough not to take everything your told at face value. All those statements and catch phrases have been carefully thought out by highly paid PR people. We really need to wake up to that.

Farmer Ed

https://www.agriland.ie/farming-news/could-europe-be-facing-a-shortage-of-milk-cream-and-butter-this-christmas/

Farmer Ed

https://www.agriland.ie/farming-news/could-europe-be-facing-a-shortage-of-milk-cream-and-butter-this-christmas/

Arla 38.3 c per Kg for September. How is it the Danes know the price they are going to get paid before they supply the mil?

greenfield21

Thought I heard that ages ago. I can't see it anyway.

whelan2

Farmer Ed wrote: »

https://www.agriland.ie/farming-news/could-europe-be-facing-a-shortage-of-milk-cream-and-butter-this-christmas/

Arla 38.3 c per Kg for September. How is it the Danes know the price they are going to get paid before they supply the mil?

For the milk we are supplying now in the last few days of august we wont know until the middle of October what we are getting. See dawg on here able to tell us what he is getting months ahead of supplying it

Farmer Ed

Makes it even more interesting if you heard it ages ago. How far in advance do they know how much they are going to be paid? We don't find out until the month after we supply the milk. Anyone know why things are different in Denmark?

Wouldn't say no to 38cent base milk price here for September.

Buford T. Justice XIX

Farmer Ed wrote: »

https://www.agriland.ie/farming-news/could-europe-be-facing-a-shortage-of-milk-cream-and-butter-this-christmas/

Arla 38.3 c per Kg for September. How is it the Danes know the price they are going to get paid before they supply the mil?

They are supplying more milk straight into consumer products so can reliably predict the prices months in advance.

In contrast, only a small percentage of our milk goes into reliable high margin products so the ability to predict milk price is greatly reduced as we send more into a fluctuating powder market.

Farmer Ed

Buford T. Justice V wrote: »

Farmer Ed wrote: »

https://www.agriland.ie/farming-news/could-europe-be-facing-a-shortage-of-milk-cream-and-butter-this-christmas/

Arla 38.3 c per Kg for September. How is it the Danes know the price they are going to get paid before they supply the mil?

They are supplying more milk straight into consumer products so can reliably predict the prices months in advance.

In contrast, only a small percentage of our milk goes into reliable high margin products so the ability to predict milk price is greatly reduced as we send more into a fluctuating powder market.

No doubt that is the case. But Denmark is only a county of 5 million people. So its not that dissimilar to Ireland apart from the fact that our production would be more grass based and it could be argued of a superior quality. The question then is? Where are we going wrong?

mahoney_j

Farmer Ed wrote: »

No doubt that is the case. But Denmark is only a county of 5 million people. So its not that dissimilar to Ireland apart from the fact that our production would be more grass based and it could be argued of a superior quality. The question then is? Where are we going wrong?

Big difference beteween usand the Danes is we are an island of just 4 odd million ,Danes have there internal and huge European market on doorstep .grass based farming should delievery a premium but dose not no matter how much we like to dress it up .where are we going wrong ,we have happy cows our grazing lively lush grass which is supposed to deliever better taste etc than tmr fed ,marketing if U ask me

whelan2

rangler1 wrote: »

If it was that easy read the stockmarket we'd be all at it
Most shareholders never milked a cow, Maybe spun out shares are being sold...could be any reason people are losing confidence. stock market is very fickle and supply and demand ....

I stand corrected but I dont think the spin out shares have been issued yet

kowtow

Fresh milk has a competitive edge because it can only be supplied from a relatively small local area, it can't be stored, and it's expensive to transport.

Once we dry it or process it, it can be stored and transported - opening up more markets of course, but equally so can everybody else's - so creating greater competition in those markets. What's more, if your main business is supplying Fresh milk there will always be a proportion of oversupply (marginal milk) which you are willing to dispose of at or below the cost of production.

Would it be possible to sell more fresh Irish milk direct into European markets?, perhaps the cost of transport really is prohibitive.

One thing is sure, we see and talk about the world's milk markets through a lens which is very much shaped by our capacity to produce and export, which isn't always helpful when trying to understand price differentials.

Edit: Of course, if butter really does continue to come back into favour and we can work out how not to get caned on the skim then history tells us we have a product which is exportable in it's own right - and where we also have a well deserved reputation for quality. Perhaps it's churns we need to be investing in rather than driers (or can they be used to dry the skim?)