Milk price drop!

Sid

Member
Livestock Farmer
Location
South Molton
What about 15ppl.
These cost cost stripped out in lean years can have a negative effect in the good years. Vicious cycle.
Sell on the spot market at 10p and you need a COP of 10p?

If the cycle is going to be 30 for a year then 20 for a year. Then by the time you spend to increase production in peak you will be in the trough.

Can any industry afford to break even year on year?
 

pappuller

Member
Livestock Farmer
Location
M6 Hard shoulder
Sell on the spot market at 10p and you need a COP of 10p?

If the cycle is going to be 30 for a year then 20 for a year. Then by the time you spend to increase production in peak you will be in the trough.

Can any industry afford to break even year on year?
Why would you spend to increase production at a peak ? Budget to start increasing at the bottom, then ride the wave ?
 

Clay52

Member
Location
Outer Space
Sell on the spot market at 10p and you need a COP of 10p?

If the cycle is going to be 30 for a year then 20 for a year. Then by the time you spend to increase production in peak you will be in the trough.

Can any industry afford to break even year on year?

Long term profitability is the key. You cannot predict the lowest of the low prices before they happen.

Farms can be extremely profitable and still make a loss at a certain point in time.

Lowest cost of production doesn’t automatically equal most profitable.
 

Stinker

Member
Don't think the tax man will be happy about you hiding money from him in the good times to get you out of trouble in the bad times.
 

Bald Rick

Moderator
Livestock Farmer
Location
Anglesey
Long term profitability is the key. You cannot predict the lowest of the low prices before they happen.

Farms can be extremely profitable and still make a loss at a certain point in time.

Lowest cost of production doesn’t automatically equal most profitable.

Whilst I agree, there is an interesting debate at the moment around setting aside profitability and concentrating on margin.
Ultimately you can only do so much to address your COP which is why I have an ongoing dialogue with my buyer & not just rock up at the annual producer meeting in a temper because the price has dropped.
 
It's still 30ppl so no need to panic yet. The Average I am working from is around 25ppl based on my previous post, so if it does go down to 16ppl I can cope for a while, but then other dairy farms running on fine margins will go bust/shut up shop, supply will drop and price will rise again. Hopefully it doesn't get that low again as the last drop ate into the below average reserve funds and has just recovered to where I want it. As HC says, low price is only an issue if it's prolonged for a long period, brining a 5 yearly average down.
is your milk contract linked to the spot price? should you not be looking to get on a cop contract to avoid the fluctuations?
 
Tags
milk

SFI - What % were you taking out of production?

  • 0 %

    Votes: 79 42.0%
  • Up to 25%

    Votes: 66 35.1%
  • 25-50%

    Votes: 30 16.0%
  • 50-75%

    Votes: 3 1.6%
  • 75-100%

    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 7 3.7%

Red Tractor drops launch of green farming scheme amid anger from farmers

  • 1,291
  • 1
As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
Top