Farming Forum UK

A forum for farmers and country-folk worldwide.
It is currently Wed Sep 20, 2017 10:52 pm

All times are UTC [ DST ]



Post new topic Reply to topic  [ 18 posts ]  Go to page 1, 2  Next
Author Message
 Post subject: A bloody good read
PostPosted: Sun Oct 05, 2014 10:59 am 
Offline
User avatar

Joined: Sun Sep 07, 2008 10:18 pm
Posts: 8048
Location: Woof Woof
8)

http://www.theguardian.com/uk-news/2014 ... itish-milk

Simples :wink:

(and very appropriate considering the title of the thread below)

_________________
Somebody Stop Me


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Sun Oct 05, 2014 11:41 pm 
Offline
User avatar

Joined: Sun Aug 02, 2009 9:53 pm
Posts: 4077
Location: Location: Location:
... & then there's the folk in the middle! :?

ie. Those who can't expand & gain economies of scale, & those who can't find a niche market to add value.
Good article, but there's no solutions, except battern down the hatches & weather the storm at the moment.

At least when Arla's price changes you know it's following a set formula. I'm sceptical about the others, they'll follow Arla's price down, but will they follow it back up (if+when! :? )


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 8:40 am 
Offline
User avatar

Joined: Sun Sep 07, 2008 10:18 pm
Posts: 8048
Location: Woof Woof
I am not a great thinker , and tend to be a bit cynical of a lot of things , but what strikes me was the messages coming from Dairy conference in the Spring as regards milk products being wanted wanted , on the world market !
And people in Ireland and Holland just ready to accelerate production , and the signs from millers and the media about people who weren't in milk going back in again (which is their perrogative) , all means very tough times ahead . Some big big decisions to be made .
We are lucky we can stick 2 fingers up at any time , having paid off all our loans to a degree , so possibly any leavers might help the ones left in .
As Graybo said about the F1 - Its a Croc of Shit

_________________
Somebody Stop Me


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 9:39 am 
Offline
User avatar

Joined: Sun Aug 02, 2009 9:53 pm
Posts: 4077
Location: Location: Location:
Huffy wrote:
I am not a great thinker , and tend to be a bit cynical of a lot of things , but what strikes me was the messages coming from Dairy conference in the Spring as regards milk products being wanted wanted , on the world market !

Yes, not long ago everyone was saying our future was trading with the Chinese ... who have themselves now upped production to more or less meet their own needs. :roll:
Can't remember the figure, but even the amount being sent to Russia by the Uk isn't supposed to be that significant to have caused all these price drops.


Quote:
And people in Ireland and Holland just ready to accelerate production , and the signs from millers and the media about people who weren't in milk going back in again (which is their perrogative) , all means very tough times ahead . Some big big decisions to be made .
We are lucky we can stick 2 fingers up at any time , having paid off all our loans to a degree , so possibly any leavers might help the ones left in .

Fullwood rep said they'd loads of enquiries about robots from new entrants. I think these guys have been making this milking lark look too easy! :roll: I've got no idea who they'd sell their milk too though. Can't see buyers wanting to pick up lots of 'little' producers.
We'll just keep plodding on ... family labour doesn't cost much & if you work them long enough hours they don't have the time to go spending any money anyway! :lol:
:wink:


From FFA
First official FFA milk protest taking place at Market Drayton, Shrops on Monday 6 October 2014. Meet at Market Drayton Livestock Centre at 8 pm.


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 9:52 am 
Offline
User avatar

Joined: Sun Nov 09, 2008 11:02 pm
Posts: 6223
Location: south Suffolk
I have never had any direct involvement with dairy farming, but am well aware that the economics are questionable at best. I really can't be bothered to read a Guardian article on the subject, but for those who can manage a bit longer, I think public realization that the supermarkets etc. are getting their milk too cheaply is growing steadily. Tesco are regarded by the majority now as an evil organisation who lie through their teeth habitually, which can only be good.

I do know one or two local dairymen who keep small to moderate numbers of cows, and make artisan cheeses as well as selling milk. The cheese is excellent, and they make a living out of it - but it's tremendously hard work.


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 11:05 am 
Offline

Joined: Wed Jan 14, 2009 3:00 am
Posts: 506
Location: Somersetshire
I'm going to defend Tesco (and Sainsbury) to a point. I supply Tesco via a core contract with Tesco Sustainable Dairy Group. Using a cost tracking method of price calculation, my milk price going forwards (to May 2015) is 32ppl.

The bad boys in the supermarket world are Morrisons, Aldi, Lidl and Asda.

I think the big problem is farmers - in all aspects of the industry - are too distant from the retailer and the consumer.

As far as the milk price in general, we've all been led to believe the export markets are the way forwards with demand and growth outstripping production. Painfully obvious it is not so. I read somewhere uk export to Russia amounted to about 300, 000 tonnes of cheddar - so not really massive.

Global market = global prices.

The bit that really annoys me is that there are huge margins in cheddar cheese (for example) global price is £1880ish), retail price is circa £7000ish.

The way forward?...............ffuk knows.


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 11:17 am 
Offline

Joined: Mon Apr 27, 2009 6:43 pm
Posts: 446
Location: cornwall
What percentage of tesco milk comes from the dairy group,i bet its close to bugger all.Its a marketing tool for them.
Having said that my milk price is cbased on a basket of milk prices,tesco being one of them so i am gratefull that they are paying better than some of the others.


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 11:30 am 
Offline
User avatar

Joined: Sun Sep 07, 2008 10:18 pm
Posts: 8048
Location: Woof Woof
RGSP wrote:
I have never had any direct involvement with dairy farming, but am well aware that the economics are questionable at best. I really can't be bothered to read a Guardian article on the subject, but for those who can manage a bit longer, I think public realization that the supermarkets etc. are getting their milk too cheaply is growing steadily. Tesco are regarded by the majority now as an evil organisation who lie through their teeth habitually, which can only be good.

I do know one or two local dairymen who keep small to moderate numbers of cows, and make artisan cheeses as well as selling milk. The cheese is excellent, and they make a living out of it - but it's tremendously hard work.

That's one thing I considered a while back ,and we might do that . 80 cows lends itself more to that sort of thing ,but at the end of the day , if my sons not too fussed about cows , we might not be producing for much longer .
I hadn't really thought the end of quotas would affect us that much , but I was being a bit naive :?

_________________
Somebody Stop Me


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 11:33 am 
Offline
User avatar

Joined: Sun Sep 07, 2008 10:18 pm
Posts: 8048
Location: Woof Woof
andrew830 wrote:
What percentage of tesco milk comes from the dairy group,i bet its close to bugger all.Its a marketing tool for them.
Having said that my milk price is cbased on a basket of milk prices,tesco being one of them so i am gratefull that they are paying better than some of the others.

Its been a good thing to some extent , its the braces holding the others from heading south ,it appears , but with Tescos share price dip and the way they are dropping in the UK market , makes you wonder how they can keep juggling that one??

_________________
Somebody Stop Me


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 12:50 pm 
Offline
User avatar

Joined: Sun Nov 09, 2008 11:02 pm
Posts: 6223
Location: south Suffolk
Huffy wrote:
RGSP wrote:
I have never had any direct involvement with dairy farming, but am well aware that the economics are questionable at best. I really can't be bothered to read a Guardian article on the subject, but for those who can manage a bit longer, I think public realization that the supermarkets etc. are getting their milk too cheaply is growing steadily. Tesco are regarded by the majority now as an evil organisation who lie through their teeth habitually, which can only be good.

I do know one or two local dairymen who keep small to moderate numbers of cows, and make artisan cheeses as well as selling milk. The cheese is excellent, and they make a living out of it - but it's tremendously hard work.

That's one thing I considered a while back ,and we might do that . 80 cows lends itself more to that sort of thing ,but at the end of the day , if my sons not too fussed about cows , we might not be producing for much longer .
I hadn't really thought the end of quotas would affect us that much , but I was being a bit naive :?


If you can face the drive right across the country, I'll introduce you to Jason Salisbury, who is a lovely man and loves his Guernsey herd. I don't know his wife really, but I think she plays a significant part in the business, and Jason certainly works his socks off, but seems to enjoy life all the same.


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 1:03 pm 
Offline
User avatar

Joined: Sun Aug 02, 2009 9:53 pm
Posts: 4077
Location: Location: Location:
RGSP wrote:
I think public realization that the supermarkets etc. are getting their milk too cheaply is growing steadily. Tesco are regarded by the majority now as an evil organisation who lie through their teeth habitually, which can only be good.


My milk price has dropped 6ppl over the last 6 months. Has the price changed in the shop/supermarket?
Was milk a loss leader before? Are the supermarkets now making a profit on it? :?


I can understand the price cuts from an Arla perspective - we know we've got to take the lows with the highs (& hope the highs out do the lows in the long run!) - but are other processors just jumping on the Arla bandwagon?
Does the Uk market warrant these price cuts?


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 1:07 pm 
Offline
User avatar

Joined: Sun Aug 02, 2009 9:53 pm
Posts: 4077
Location: Location: Location:
Moors Farmer wrote:
I'm going to defend Tesco (and Sainsbury) to a point. I supply Tesco via a core contract with Tesco Sustainable Dairy Group. Using a cost tracking method of price calculation, my milk price going forwards (to May 2015) is 32ppl.

The bad boys in the supermarket world are Morrisons, Aldi, Lidl and Asda.

andrew830 wrote:
What percentage of tesco milk comes from the dairy group,i bet its close to bugger all.Its a marketing tool for them.
Having said that my milk price is cbased on a basket of milk prices,tesco being one of them so i am gratefull that they are paying better than some of the others.


The only milk in Tesco that is comes from the TSDG is that with 'Tesco' on the label. They sell an awful lot of other milk too & the price they charge for all of it will have little bearing on what they pay their direct suppliers.
I don't think Tesco is so sweet & innocent in all this.


Top
 Profile  
Reply with quote  
 Post subject: Potter today
PostPosted: Mon Oct 06, 2014 4:23 pm 
Offline
User avatar

Joined: Sun Sep 07, 2008 10:18 pm
Posts: 8048
Location: Woof Woof
IP Dairy Farmer – October 2014 (Original Uncut Version)

The dairy industry is in crisis. Globally farmers have responded to higher milk prices by producing 5% extra milk than normal, which has outpaced the predicted annual increased demand (+2.5%) by a factor of 2 to 1. Marry this to the Russian ban, plus a Chinese cooling in demand, and prices have gone south big style.

With Russia it’s a political ban that has created a vortex all farmers are paying the price of. The Russians buy the equivalent of 1.5% of total EU milk production, predominantly in the form of around 300,000 tonnes of cheese and butter.

The Commission has stepped in, agreeing Private Storage Aid (PSA) to include most types of cheese. Note, though, PSA for between three and seven months (the maximum) will end at the same time as the EU’s spring flush, which is not smart. Consequently the Irish are lobbying for a one year storage period to coincide with what is hoped will be the end of the ban. It’s a good shout, but it’s of minimal value to any processor who needs cash in the bank now. Cheese in storage is not the same as cash in the bank.

There is now serious lobbying by various member states for the Commission to do more to bring stability, and a more confident outlook for the industry. A front-runner is to remove butter and SMP to intervention but at an inflated price, as opposed to the current 17.5ppl IMPE price. The Irish are calling for the IMPE safety net to reflect current production costs with others suggesting a revalued IMPE north of 23ppl. There is also a push for export refunds for processors seeking alternative export markets to replace lost Russian sales.

PSA and intervention will help balance a depressed market, however, in reality all they do is take product off the market now, only for it to reappear at a later date when the market conditions have improved.

There are even rumblings of pressure to retain milk quotas beyond the 31st March 2015. This has triggered a mini run on milk quota to the point that we now have buyers outnumbering sellers by a factor of 9 to 1. Add to this the imminent 21st October deadline for trading single farm payment entitlements and a host of claimants keen to realise some cash for their 5ha or less of entitlements and our office is buzzing!

Not long ago significant numbers of dairy farmers pushed for their milk price to be linked to commodity prices. Many succeeded, but now the cream has turned sour and some of those very same farmers are claiming we are “an island of fresh milk consumers and are divorced from world prices”. That’s called picking and choosing when it suits!

Others took advantage of short-term contracts linked to commodity prices. Some simply joined the growing numbers of milk tarts who signed-up for the extra money, and as soon as someone offered them an extra 0.5ppl in went their notice. But for some it has ended in tears: large and small producers who are either out of contract or under resignation have nowhere to go, and no processor really wants them. Few, if any, processors are recruiting.

Those who have secured a safe home for their milk need not worry. For some of the tarts it’s a simple choice of either accepting a poor world commodity linked price or exiting the industry.
Processors are not exactly sitting back smiling, because some have invested heavily in new facilities, which need to be full to capacity. They don’t want producer confidence dented to the point farmers either cut back on production or leave. Sadly for some that decision has already been taken, though.

Those who went public last year with the claim that we should increase domestic production have now either gone on mute, or gone all together. Some clearly aren’t here (in the real world) at all. And this brings me to a press article from Mole Valley Farmers only days after a dozen or so milk price cuts, including the infamous 3ppl First Milk one! The headline was “Drive for more litres in light of low feed costs”. In the article I was gobsmacked to read the conclusion that “it is well worth pushing for extra litres this winter, despite the recent drop in farm gate milk prices.” Dr Chris Bartram, Mole Valley’s Feed Solutions, Head of Nutrition, went on to say that, at current feed prices, “That brings an astronomical possible milk price to feed cost ratio of 2:5 to 1 based on an average milk price of 30ppl”.

Well Dr Bartram, it may be good for your employers to push for extra litres in the hope it helps maximise the output from Mole valley’s feed mills, particularly the new one in Ayrshire, but it is NOT going to help processors, or the milk price right now! The days of an average UK paid out milk price of 30ppl have gone for most and the evidence was before your eyes prior to the article!

In this edition I was hoping to write about the review of the Voluntary Code but more than seven months since its announcement and all is silent. Yet, initially, it was “expected to be concluded quickly, by the Spring.” Surely the review chairman didn’t receive a postbag of farmer comments? On that score I have asked for details on the number of submissions he received, excluding the staunch defenders of the code eg the NFU and NFUS. More on that soon!

Finally, two requests: first to First Milk. Please rename your so-called liquid contract, or merge liquid and manufacturing and just have one. It’s not a liquid contract any more it’s predominantly an ingredients or commodity one. My second one is for everyone to keep an eye on comments relating to Morrisons. It is currently out to tender for its liquid milk requirements. If Dairy Crest retains some of it, for instance, and then issues a comment to the City similar to when it retained the Sainsbury’s contract in 2013 (“Although the conditions of the contract will change from 2014 our on-going cost reductions are expected to offset any financial impact on our business” i.e they got the milk much cheaper!) then we will know Morrisions have screwed the processors. And we can’t afford for that to happen to the liquid processors. It is also not right or ethical for Morrisons to assume that the processors will simply pass the shortfall back to the farmer. That’s the attitude that prevailed before SOS Dairy, remember.

_________________
Somebody Stop Me


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 5:00 pm 
Offline
User avatar

Joined: Sun Aug 02, 2009 9:53 pm
Posts: 4077
Location: Location: Location:
Quote:
But for some it has ended in tears: large and small producers who are either out of contract or under resignation have nowhere to go, and no processor really wants them. Few, if any, processors are recruiting.

Arla's doors are now shut & they have a 'waiting list' of folk who want to join them.


Quote:
There are even rumblings of pressure to retain milk quotas beyond the 31st March 2015. This has triggered a mini run on milk quota to the point that we now have buyers outnumbering sellers by a factor of 9 to 1. Add to this the imminent 21st October deadline for trading single farm payment entitlements and a host of claimants keen to realise some cash for their 5ha or less of entitlements and our office is buzzing!

Being cynical, I often wonder where these 'rumblings' actually start from! :roll:


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Oct 06, 2014 5:33 pm 
Offline

Joined: Sun Jun 28, 2009 3:05 pm
Posts: 10608
Location: The Zone
I read most of the Guardian article and it did raise a few interesting points about people wanting cheap milk but not wanting big dairies to produce it. I would like to add however, that nobody is forcing anybody to milk cows.

_________________
keep honking, I'm reloading


Top
 Profile  
Reply with quote  
Display posts from previous:  Sort by  
Reply to topic 
 [ 18 posts ] 
Post new topic  Go to page 1, 2  Next

All times are UTC [ DST ]


Who is online

Users browsing this forum: No registered users and 1 guest


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
Powered by phpBB® Forum Software © phpBB Group Color scheme by ColorizeIt!