Milk Price III

Dairygold up to 49.85 base. 0.65c sustainability bonus added after solids adjustment then

To give Base an example of someone who fixed, I bought land to expand the Dairy enterprise a few years back. It was a once in a lifetime opportunity, so we went to our limits to do it. At 30 cent I could comfortably make repayments but in low 20s I was in trouble. So to take out that fear I fixed a portion. Does that make sense? People with no money worries can roll the dice but others might have to look at the worst case scenario and be more cautious.

Didn't hear of any body insisting in it. At the time it was about reducing risk. Have had milk prices in low 20s twice in the last 7 years so not quiet a 1 in 20 Yr event. In dairygold it tended to be 5 or 10% max of supply in a given contract so dunno of many having a large supply fixed bar having maybe contracts rolling over each other so would prob be a max of 30% at one time.

Don't disagree with the premise, just don't think they are done correctly here

It is but most coops up to now weren’t given that option

Were not giving or did not negotiate it into the contract.

If that is right it's a really careless contract by co-op's. They must not have read the contract before offering it to there suppliers. Surely if you saw a get out of jail clause on one side you would negotiate the same on your side.

Or was it the coop looking after its customers. This tends to happen s lot in the agrifood industry. Those on the sales side tend to be account manager more than salespeople

Should be another couple of cent for May milk, Arla is really setting the standard, they obviously haven't their head in the sand re keeping suppliers onside and happy to keep the milk flowing knowing they'll get paid for it

https://www.ipmsltd.co.uk/dairy-bulletin-news/3030/incredible-4-49-ppl-further-increase-for-arlas-conventional-and-organic-members-means-a-total-of-over-8ppl-in-one-month/

Glanbia up 2 as well. Disguised as an agri input subsidy. Designed to help the people under pressure with fixed milk I would say.

Plainly put the debt levels that the co-op have taken on are of the reservation, and another couple of 100 million is going to be ploughed into this new joint venture, the 100million share exchange from a few years ago was only paid back last calander year in a 100 million euro lump sum, a carbon copy 250 million deal is now in play, that financed the buyout....

If share price stays in the doldrums, a quarter of a billion will have to be found our put aside to cover the above going forward, the margin the co-op needs to skim of milk price going forward to cover the above will be multiples of the guaranteed 3.2% margin that was apparently holding back our milk price all along in the previous joint ownership structure...

The fact they are already paying a base price that's 4-6 cent below all other co-ops when you strip back these support payments is setting of alarm bells, they're using the fixed milk situation as a cover

It co.es down to are they selling milk too cheap to Glanbia. It really seems the tail is wagging the dog.

It's a real lesson to Kerry suppliers many who think that shafting non milk supplying shareholders will suddenly solve all there problems.

The farmer elected reps on the board of Glanbia ….are Glanbia suppliers knocking there doors down demanding to know why all they are paying as a base price is 46.58 cent when ornua returns are returning near 55 ????and most other coops are paying above 50 ….without huge knowledge it looks as if a few cents are been taken from non fixed suppliers to top up fixed milk price and farmers own money within the coop been used as these extra gimmicky top ups …..no issue supporting fixed suppliers as these are unprecedented times …..coops have rarely paid close to ornua returns so money should be there to cover it without raiding cookie jars or knocking money of all suppliers to cover it ….I considered a switch to Glanbia years ago ….very glad I staid put ….even tho we’ve lots of faults too

Chinese whispers says a good few have north of 50% fixed, the sickening thing is they'll pay this top-up till November, and then pull it, and use the winter bonuses from dec-feb to mask the drop in base price, following the exact same playbook as the Spring just gone