Milk Price III

I was talking to hoof man on Wednesday. He said 9 out of every 10 yards he go into are reducing numbers. Either due to Nitrates or labour issues. Telling me about a big operation where the staff quit en masse one Friday evening. Over 300 cows. Word got out that 2 lads were leaving and the other 2 decided that they weren’t hanging around either.

True. But that being said a lot of lads around here are sick of the extra rooting and tearing the big numbers brought. Land a few miles away being leased and no one interested ( at what price I don’t know) - so no 500+ per acre being handed out around here. Different story other parts of the country.

Aye, always a good yarn or 2 from our hoofcare man

When pressure comes on the system it always finds the weak spot, be that heavy ground, weather, management or numbers. Having a system that is resilient is key whether, milking, beef etc is key

The big question that has to be asked on the walkout is, has that farmer ever worked off farm. Spending time off farm really helps build the skill set for management of people, it's a very different skill set. I remember meeting my old principal of secondary school a few years ago, he kept a few sucklers, as a hobby. He said you could move the worst of worst cattle , but by god you couldn't move the worst of the worst kids and there parents. It's a very different skill set need to manage staff, especially if you have spent the majority of your career working the home place on your own.

Finally we all have to keep an eye on weak spots in our farming enterprises. For me it has to be working on reducing the hours

Its not just the rent fertilizer and contractors costs/sprays/fencing materials etc are all up massively, taking 2020 as a reference year, it was costing us circa 7 c/l to rent ground fertilizer and pay contractor bills to get silage/maize into pit, for next year 2024 existing landowner in one case wants an extra 250 euro a acre rent, other man is so so, let's say he wants the same....

At 450 a acre this puts another 3c/l on production costs per litre and you can easily add on another 3c/l for fertilizer and contractors etc, the maths simply don't work out at a sub 45c/l milk price at current input costs, will be milking alot less cows here next year I'd say but it's a better option than going broke

Renting ground like that and building up a herd and facilities based on the ground remaining available never made sense in the first place. The scenario you describe is like being in a hole and keep digging

I suppose milking cows is rocket science most of the labour ( milking, machinery driving, AI, physical labour etc) involved is sub 15 euro/hour work.

It not rocket science to have an insight into what is often profitable and unprofitable.

It not exactly rocket science to understand that 500+/acre makes ABSOLUTELY no sense whether for conacre or for leases.

Labour is a cost above 100 ish cows. A fulltime labour unit is probably around 42k minimum now for a year inc employer PRSI and insurance. In a full employment economy a lot of part time will want cash at around 20/hour for short hours (3ish per day).

Very few 220 cow husband and wife operations most are father and son operation and there is no long term plan for removal of one of those labour units or a plan if anything happens to one of those labour units.

That is what is call a ''Oops'' story.

Heard of a tillage conversion that is gone straight to250 cows and six months in if he could roll it back he would.

When you are at a job where you are working but able to talk ( very few farms a good parer goes into will the farmer not be standing talking to him as he works. You will hear a lot of stuff in 30-40 minutes not to mind in a couple of hours.

Usually if it doesn't make sense on paper it gets worse as you put it into practice. Say thanks to the lads that paid 600/ acre this year. While there are dairy farmers locally they are not in the majority however the renewal rates for leases are up 150/ acre locally, it causing beef lads to walk away.

IMO it going to get worse SCBI loans are mostly variable and will be @6+% by year end. A lot of large dairy operation's will have 250k on that money.

It will depend on how intensive the operation is, whether they have to push calves out the gate at ten days and cull cows walking out of the parlour etc. In a decent well run operation you can probably still keep it below 18c/L.

Grain is softening faster on continental Europe than it is here and it is going to go lower unfortunately. There is a sh!tload of grain in storage in the Ukrainian and Russia will will flood out of there in the next 12-18 months.

There is a lot of long-term leases 10+ years that have rent reviews build in. With the present stupidity the costs of these will jump from 250-400+. Many of these leases are for standalone units.

The problem with dairying is for the last five years lads have kept digging no matter what medium term issues were pointed out ( calves quality or age before sale, slurry storage, housing, nitrates etc) the answer has always been to rent more land.

There was plenty of warning signs but most of those types of operations ignored them. It was plough on more cows and more land was the answer, everything has a limit.

Believe it or not Dunedin it's exactly that. Did the farmers paying 500+/HA and maybe BLISS on top to owner in the last 6-8 months think milk would be heading for sub 40c/ L and it may not stop there.

Many significant expansions are/ were father and son operations where the loss of one labour unit is not factored in as well many younger lads that have gone head first into dairying have not factored in how long it will take to service the debt they have accumulated at what was a sub zero Central Bank rate

You could have got 100k++ off SCBI loans last year and have it in the account within a week.

For the last five years some large operations have operated outside of TAMS limit (70k or even 140k for a father and son operation) as this was needed nearly every year

You might sneer, but wait and watch what will happen in the next two years if milk goes and stays below 35c/L.

Heard a good one today where a large dairy operation were planning to put paddocks into bales for quality feed. As rolls of plastic are 115/ roll( I can buy at 107) the whole lot is going into the pit.

This is an operation that put in a new parlour, bulk tank, roadways, drainage, road tunnel, new silage slab etc in the last 3-4 years.

I just found this hilarious when I heard it this morning. Several hundred K in development costs and a couple rolls of plastic would break the bank 🤣🤣.

You are really wasted ,some expert alright able to keep mik production cost below 18c/litre where it is probably 36c/litre

Go away back to cuckoo land !!!