Milk Price III

Gawddawggonnit

Buford T. Justice V wrote: »

Every market sector is 'interfered' with by government, not just Agriculture, Dawg.

It ranges from minimum wage policy, holiday entitlements, sick pay etc etc to needing work permits to be eligible for work in some sectors to protect native workers from competition from foreign workers. It's nothing new and isn't going to change in the future.

As a sector, we utilise the tools at our disposal to help frame any legislation or policy to maximise the return to our sector, again the same as any other sector in any economy, similar to the beef sector highlighting the threat posed to animal health security by Brazilian beef imports or the health care sector highlighting the need for adequate language skills to minimise problems in that sector by workers misunderstanding instructions re care and medicines. Or French farmers spraying slurry at government offices when protesting about whatever is the current French fixation:pac:

Many are struggling to accept the fluctuations in milk prices paid and have a bigger difficulty in accepting the possible need for fixing a proportion of milk price. A lot of this is would be caused by a lack of trust by suppliers in their processors for multiple reasons, some quite understandable, others not so much.

Every farmer would agree that there is a need to manage price fluctuations but, as yet, seeing as the sector is only about 5 years old, they are undecided as to what shape this management should take. Again, Government policy has a huge part to play in this story by allowing a portion of profits from high milk price years to be partially taxed and kept in escrow in effect, until needed.

This debate is only just starting, Dawg.

+1.


Start the (informed) debate. I'll wager there's plenty folk with loads to contribute other than what they got for last months milk.

Mooooo

Imo the problem with some of the schemes are;
Participation in previous schemes giving access to next ones, reduces the choice of the supplier to use them as they see fit
Linking them to feed purchases from the same processer, this is tying the farmer too much to the one group. If thats the case they may as well just pay us a wage and rent for the cows and land and let them take the risk seeing as they set the price of outputs and inputs

If they are done right it should just be take it or leave it, fixed price for x amount for x period that's it, with a buyer on the other end to take the product at x price.

Gawddawggonnit

Panch18 wrote: »

That's a poor price, I thought beef in France was making more than that

Holxlim and holxpt are worthless. Pure beef breeds are the ones that make the money.
Saying that the last batch of bulls that left a fortnight ago averaged €1512/hd at under 15mts.
I find it pays better than rearing replacement heifers...and another way of hedging against low milk price!

K.G.

Just on the whole 5 year fixed price thing,would any of ye reckon 5years is going to cover two lows and one high price periods if it starts i january as things look at the minute

kowtow

Buford T. Justice V wrote: »

Every market sector is 'interfered' with by government, not just Agriculture, Dawg.

It ranges from minimum wage policy, holiday entitlements, sick pay etc etc to needing work permits to be eligible for work in some sectors to protect native workers from competition from foreign workers. It's nothing new and isn't going to change in the future.

As a sector, we utilise the tools at our disposal to help frame any legislation or policy to maximise the return to our sector, again the same as any other sector in any economy, similar to the beef sector highlighting the threat posed to animal health security by Brazilian beef imports or the health care sector highlighting the need for adequate language skills to minimise problems in that sector by workers misunderstanding instructions re care and medicines. Or French farmers spraying slurry at government offices when protesting about whatever is the current French fixation:pac:

Many are struggling to accept the fluctuations in milk prices paid and have a bigger difficulty in accepting the possible need for fixing a proportion of milk price. A lot of this is would be caused by a lack of trust by suppliers in their processors for multiple reasons, some quite understandable, others not so much.

Every farmer would agree that there is a need to manage price fluctuations but, as yet, seeing as the sector is only about 5 years old, they are undecided as to what shape this management should take. Again, Government policy has a huge part to play in this story by allowing a portion of profits from high milk price years to be partially taxed and kept in escrow in effect, until needed.

This debate is only just starting, Dawg.

Once Governments start setting producer prices you can kiss goodbye to quality and count on an increase in corporate profits. Centrally managed economies only go in one direction, and the bigger the economy the faster it goes. It's probably not a coincidence that the EU issued legal guidance yesterday to allow countries (like France) to give guaranteed purchase rights for land to tenants, to neighboring farmers, or basically to whomsoever the government chooses.

Ask any Mauritian hotelier why, with the best fishery and shellfish in the Indian Ocean, they are the largest net importers of frozen seafood in the region and no hotel will bother to buy or serve anything locally caught...

It's not price, it's the fact that once guaranteed a price (margin) fishermen gave up caring about the quality of the product and the quality of the sea it came from.

If you want a local lobster in a hotel in Mauritius you'll have to book a room for it and bring it with you.

kowtow

There's actually a slightly weird and interesting bifurcation taking place which, if you ignore all the Brexit politicking, might be a taste of the real battleground of the future and the way things could go.

On the one hand, Europe is laying out the terms under which governments can interfere in agricultural land sales to allocate it to selected buyers on preferential terms, while France paves the way for central government control over farm gate prices (and therefore the wages to be paid to those who own the land).

On the other, in the UK (which is likely to remain an unplanned economy), The Minister for Agriculture Michael Gove - who, whatever else one might say about him, is keen and intelligent - is for the first time acknowledging that there are only 100 harvests left in the United Kingdom's soil and that when he says environmentally and animal friendly farming in a post Brexit UK he means it. There is an organic (with a small o) dimension to his 25 year plan.

Floki

Setting producer product prices is another way of reintroducing quotas back again.
The first thing we learned in business organization class is the law of supply and demand and how demand sets price and vice versa over/undersupply setting price. If the French guarrantee price it needs either intervention for when demand drops (if they do this it phuks it up for the rest of the eu) and/or quotas to control supply.
Of course the French have form in centralized control of every facet of life in the country going back hundreds of years and the French as a people have grown with this idea of control and seem extremely unnaturally too comfortable with this. IMO.

Free economies with boom and bust good. It's what any capitalist with half a brain thrives on.
This other keeping the sick patient alive stuff not so good.

kowtow

Floki wrote: »

Free economies with boom and bust good. It's what any capitalist with half a brain thrives on.
This other keeping the sick patient alive stuff not so good.

Unfortunately, as some wag pointed out to me the other day, Capitalism isn't all that popular with a generation that never seems to have any capital.

We are moving into interesting times, economically speaking.

All countries - and the Eurozone in particular - have written a tremendous & unfunded cheque in the form of QE drawn on the future. One way or another, some event must occur which will bounce or stop that cheque and cleanse the system of all the imaginary assets and obligations which it's writing supported. If you need evidence of this you need only consider that European Junk bonds - and I don't just mean the ones issued by NTMA - are trading at a lower risk than American Treasuries entirely due to the activities of the ECB.


The traditional way of righting a capsized financial system was hyper inflation, War a close second. Deflation is a third (either sharp and shocking in the financial bust sense or cruel and slow in the depression sense). There is a growing school of thought among a new generation of socialists which seeks to re-define the traditional role of money altogether, to keep printing it, and to give it out as of right to all those whose jobs will be replaced by robots.... whatever happens when I look around the Western world at asset prices today I find it very difficult to believe that the current political, social, and economic environment will be recognizable to our grandchildren.

What happens between here and there is anyone's guess.

George Sunsnow

It's cheap food policies i.e. Politics that's the problem
People have to eat and that food has to be produced
The day needs to come where the work going into food production is respected or stops altogether
Most producers and workers can strike for a few weeks to gain that respect farmers can't or won't

The French guarantee'ing cost of production (including a set salary for the farmer which isn't guaranteed at all now) is a step in the right direction
If that is the post Brexit direction of EU farming policy,I'm all for it

kowtow

George Sunsnow wrote: »

It's cheap food policies i.e. Politics that's the problem
People have to eat and that food has to be produced
The day needs to come where the work going into food production is respected or stops altogether
Most producers and workers can strike for a few weeks to gain that respect farmers can't or won't

The French guarantee'ing cost of production (including a set salary for the farmer which isn't guaranteed at all now) is a step in the right direction
If that is the post Brexit direction of EU farming policy,I'm all for it

I understand where you are coming from, but is taking a Government job while losing control of your own farm & land really the only - or an adequate - solution to the fact that selling produce to corporate food manufacturers does not produce adequate returns for reinvestment?

My choice would be for farmers to connect more directly with customers, to win their hearts and minds with quality. Essentially that's a local thing, but it is a powerful one.

Buford T. Justice XIX

George Sunsnow wrote: »

It's cheap food policies i.e. Politics that's the problem
People have to eat and that food has to be produced
The day needs to come where the work going into food production is respected or stops altogether
Most producers and workers can strike for a few weeks to gain that respect farmers can't or won't

The French guarantee'ing cost of production (including a set salary for the farmer which isn't guaranteed at all now) is a step in the right direction
If that is the post Brexit direction of EU farming policy,I'm all for it

Just on that, farmers are the only sector who are prevented from withdrawing their products from the market to force a more favourable price for their produce. Partly due to the short life span of the products and partially, at least here in Ireland, due to laws preventing it.

Atm, Europe is having its cake and eating it with a lot of talk about family farms being protected while not doing anything to enable them to take on huge corporations that actively control product specifications and prices to their own benefit.

I agree with kowtow, there will be a reckoning in the near future because the two opposing sides of the EU model are mutually incompatible but I don't see much happening until food becomes scarce and expensive again and that might not be too far away with the majority of human calories coming from a very small number of crops, wheat, rice and potatoes. If there is an outbreak of disease like a wheat rust or similar on one of those crops, the whole foundations of society will be shaken.

I don't have a very positive outlook for the medium future, tbh.

George Sunsnow

kowtow wrote: »

I understand where you are coming from, but is taking a Government job while losing control of your own farm & land really the only - or an adequate - solution to the fact that selling produce to corporate food manufacturers does not produce adequate returns for reinvestment?

My choice would be for farmers to connect more directly with customers, to win their hearts and minds with quality. Essentially that's a local thing, but it is a powerful one.

The problem with that is humans are selfish
There aren't enough who think eating for as little as possible despite the cost to the farmer is wrong
You'd be depending on the middle to higher earners too who are already the minority,not to mention the minority within that group who will actually pay for quality off their own bat
So yeah I think government policy is the only game in town
Thus far that's been for cheap food
Tweaking that to include a decent guaranteed standard of living for the producer ,I'm in favour of
Byproduct is sustainable quality food production

We can but dream

Floki

I can't get my head around this.

How can you guarantee a price to an independent sole trader farmer?
Every farmer is a different size and has a different cost of production. How do you know which farmer to base your price for the whole mass of farmers?
The farmer with the lowest cop or the highest cop?
Who decides this and the only way they can enforce this is by having unrestricted access to every farmers accounts.
Will the government decide what you can and can't buy?
Whether you can and can't lease land and what price you pay for that land?
Then you have the reality of cop always rising to gobble up that guaranteed price.

What we have now is perfect except for the unequal bps or any subs for that matter. Actually it's not perfect. There's too many market distortions already and low sellers (who can afford to do so) keeping the price down.

K.G.

One question lads wheres the money going to come from.

George Sunsnow

It’s not a price you are guaranteeing it’s a fair wage and only on farms where the Sale of product at least meets the farms cost of production over an average of say 5 years
That’s probably the vast majority of farmers

Of course to do that you’d have to completely overturn the cheap food political mindset because it would involve a doubling of the CAP budget and every full time farmer would get the same
You could of course legislate such that the measure is funded from a fair share of shop price
I’d argue such legislation would be a matter of national/EU security

We can but dream of course

Mooooo

What yer talking about there is like Tesco contracts in the UK which are based on cop. Accounts handed over etc and the group of suppliers pooled and price based on average cop with the bottom 5% given a few months to improve or else they are dropped which in turn starts dropping the average cop as Tesco tighten things up. Plenty conditions to meet to keep the contract as well. Where does the end game come then?

George Sunsnow

To be honest Moooo its an idea but the last place I’d look for a template to implement it would be Tesco or any multiple

Mooooo

George Sunsnow wrote: »

To be honest Moooo its an idea but the last place I’d look for a template to implement it would be Tesco or any multiple

Not saying Tesco is the way to go but intervention be it like the French or anything else could turn out to be worse than markets in the long term.

George Sunsnow

Hard to know because it would involve political will
You’d basically either be legislating for a basic income for full time farmers (effectively double the average bps if that’s €11k) and decoupling that altogether from production as long as the farm is not loss making due to non viability
Funded either from the market by law ,the EU,governments or all
Incentive would be maintained obviously because any profit you make you keep
You’re taxed as normal on all incomes

As I said,it doesn’t happen or something
Similar because there’s no respect for primary food producers
We can but dream as I say

Mooooo

George Sunsnow wrote: »

Hard to know because it would involve political will
You’d basically either be legislating for a basic income for full time farmers (effectively double the average bps if that’s €11k) and decoupling that altogether from production as long as the farm is not loss making due to non viability
Funded either from the market by law ,the EU,governments or all
Incentive would be maintained obviously because any profit you make you keep
You’re taxed as normal on all incomes

As I said,it doesn’t happen or something
Similar because there’s no respect for primary food producers
We can but dream as I say

That is unlikely to ever happen. Other industries would have to get something similar. The way to go is target retailers imo. At least get them to show there breakdown of profits within Ireland which should be able to be done more so with brexit. Using food as loss leaders and putting pressure on suppliers then so they can sell some other ****e with their name on it is bollix. Veg crowd would attest to that

George Sunsnow

Other industries wouldn’t as this would be a food security law

But anyhow I’m old enough to remember the great PAYE protest in 1979 in which the farmer was vilified for not paying tax
There was no respect for the primary producer then or now,it was ever thus and we as farmers reap the consequences

Yes food security laws could compel multiples to deliver a fair margin to food producers
The only way that’ll happen is starvation
Currently a lot of farm labourers probably have a better living than what’s left for the farm family

kowtow

Floki wrote: »

I can't get my head around this.

How can you guarantee a price to an independent sole trader farmer?
Every farmer is a different size and has a different cost of production. How do you know which farmer to base your price for the whole mass of farmers?
The farmer with the lowest cop or the highest cop?
Who decides this and the only way they can enforce this is by having unrestricted access to every farmers accounts.
Will the government decide what you can and can't buy?
Whether you can and can't lease land and what price you pay for that land?
Then you have the reality of cop always rising to gobble up that guaranteed price.

What we have now is perfect except for the unequal bps or any subs for that matter. Actually it's not perfect. There's too many market distortions already and low sellers (who can afford to do so) keeping the price down.

+1000

The two measures referred to are the first steps on the road to Nationalizing farms and farming. That is almost certainly not the end goal - but they are very difficult steps to "untake" (look at how difficult the CAP is to undo)... and once you go down that road it is very difficult indeed to stop until you reach the logical conclusion which is 100% planned national production on national farms as pioneered by Lenin et. Al. in Russia.

And for all their breadbasket land, that didn't feed the Russians very well - it doesn't matter how cheap food is if there is none of it on the shelves.

You cannot demand a minimum wage as a farmer, it isn't compatible with operating the farm as a business which you own. Simple as that, end of story.

Demanding the conditions in the marketplace which mean farmers are able to make a living within reason - well that is a different thing entirely and absolutely laudable.

We're sometimes not very good at seeing the difference. We want to own the business, the assets, and the profits - but we want someone else to guarantee the salary. That's not possible, we're farmers not bankers!

George Sunsnow

Funny I’d have thought legislating for a fair return to primary producers has nothing to do with nationalisation but everything to do with fair trade

kevthegaff

Gawddawggonnit wrote:

€3550/t being offered and I'm looking for €100/t more. No max age on heifers and 24mts max age on bulls.

Do u something about CAP we don't?

kowtow

George Sunsnow wrote:

Funny I’d have thought legislating for a fair return to primary producers has nothing to do with nationalisation but everything to do with fair trade

Fair trade is a consumer movement, you can't legislate for it. Consumers agitated and retailers responded... quite slowly iirc.

We're a bit divorced from it in Ireland because of our commodity export focus. It's difficult to ask an African buying milk powder to pay more so that an Irish farmer can afford to clothe his children (think about that for a moment because that is the industry we have created).

What the Irish government has done is attempt to legislate the great alternative to fair trade.. which is the clean green angle. There are parallels but whether the actual consumers of the bulk of our exports will pay more for it, to the extent that it pays the farmer, remains to be seen.

The elephant in the room is probably our sense of entitlement.. that we have a divine right to produce more and more and export markets should pick it up regardless and either consumers should pay up or someone should step in to make the books balance....

I think when Ireland feeds Ireland, and for historical reasons the U.K. as well, there is a case for ensuring that the connection to the consumer is of sufficient quality to ensure a fair price for the farmer.

Outside these islands, and niche brands like Kerry, I don't think we are justified in stamping our feet.

kevthegaff

Are assets too high in value across the eu, house prices, shares? Kt might enlighten us. If a standard house in Dublin is 300 k plus, childcare, transport can u expect them the pay a large % on food. More people are from urban areas who have little knowledge of food production, labour and quality only how symmetrical their tomatoes are(still talking about food!) .

kowtow

kevthegaff wrote:

Are assets too high in value across the eu, house prices, shares? Kt might enlighten us. If a standard house in Dublin is 300 k plus, childcare, transport can u expect them the pay a large % on food. More people are from urban areas who have little knowledge of food production, labour and quality only how symmetrical their tomatoes are(still talking about food!) .

I find Ireland shockingly expensive and I came here from Switzerland!

The problem here is that the workforce in the FDI economy is overpaid - for what they do - because of the tax arbitrage. To some extent this sector sets the benchmark prices, particularly in Dublin, and successive governments have pushed public sector and minimum wages up in a misguided attempt at equality and distribution.

This artificially high cost base makes small businesses, farms, etc. Virtually inoperable without subsidy and without their owners working long long hours at low wages.

freedominacup

George Sunsnow wrote: »

It’s not a price you are guaranteeing it’s a fair wage and only on farms where the Sale of product at least meets the farms cost of production over an average of say 5 years
That’s probably the vast majority of farmers

Of course to do that you’d have to completely overturn the cheap food political mindset because it would involve a doubling of the CAP budget and every full time farmer would get the same
You could of course legislate such that the measure is funded from a fair share of shop price
I’d argue such legislation would be a matter of national/EU security

We can but dream of course

Let those who want it work away but don't inflict this sort of nonsense on those who would rather have some control over their own destiny. For the first time in my career I can run my farm to it's potential. We made money last year despite the poor prices and can invest in the business this year with better prices. The last thing I ever again want to see is a civil servant dictating what I can produce or what I get paid for it. I despair for this industry every time I hear someone looking for the comfort blanket. And for the record we don't own big acreage or have a sfp that would allow us to farm badly. The sfp we do have is being whittled away because it is relatively high per ha and transfered to farms with multiples of our acreage. We no longer factor it into long term plans. The land we would need keep it simply isn't available locally. Get your comfort blanket if you want it just don't expect me to get under it with you.

George Sunsnow

Eh?
How is requiring by law a fair market a ‘comfort blanket’
Please explain

You have your fair price this year without any calamity,why shouldn’t you have it every year?

K.G.

George Sunsnow wrote: »

Eh?
How is requiring by law a fair market a ‘comfort blanket’
Please explain

You have your fair price this year without any calamity,why shouldn’t you have it every year?

What do you use as a comparison as a fair market price.tbh honest arent we already getting subsidies from eu taxpayers to priduce food and now you expect those people to subsidize us again through higher prices