Milk Price Tracker

Sid · Jan 24, 2017

stablegirl said:
99% of the arla milk price argument at the moment is currency related. (Dont worry im sick of me banging this drum) if the pound strengthens it will be interesting to see how muller etc stick with the arla price.

Unless you are Organic then its a guessing game if you will get a rise or a cut related to currency or the conventional unrelated but sometime linked but sometimes not.

stablegirl said:
The thing that makes me angry about Arla is quoting the milk price including the 13th payment. Its rubbish, the 13th payment is a return on a sizeable investment we have in the company. Like a dividend on shares, we have put over well £100k into arla and thats what the 13th payment is the return on.

This is the point i'm saying about the "arla dividend" it not linked to the amount you have invested and risked with Arla. How much do you get for the investment @stablegirl 5%?

farmer on a bike · Jan 24, 2017

Sid said:
True but it depends if you reward the investors or the suppliers? Those with the forethought of joining with Arla and risking their cash who may not have expanded (not all milk producers can or want to) or the add ones who jumped on the band wagon.

It is important to reward the suppliers because you can't make money without the milk, but I understand what you are saying. You have to remember that as you go forward a proportion of the retained profit is allocated to your capital account, as week as you receiving a 13th payment so that the capital investment goes up in line with supply.

farmer on a bike · Jan 24, 2017

Sid said:
Unless you are Organic then its a guessing game if you will get a rise or a cut related to currency or the conventional unrelated but sometime linked but sometimes not.

This is the point i'm saying about the "arla dividend" it not linked to the amount you have invested and risked with Arla. How much do you get for the investment @stablegirl 5%?

Last year the return for me was 23%, I think this year I also get extra capital as well so it will be more like 30%.

cornishfarmer · Jan 24, 2017

farmer on a bike said:
Last year the return for me was 23%, I think this year I also get extra capital as well so it will be more like 30%.

Do you see this as a problem? Is a co op shouldn't everyone be treated the same and get say 10% on money invested.

Einstien · Jan 24, 2017

O'Reilly said:
Ummm, what if ARLA are your local dairy? Must be the case for a lot of people.

Good point LoL, perhaps offer to use the Capital investment to pipe your milk direct to the factory - they'll love that idea!

farmer on a bike · Jan 24, 2017

cornishfarmer said:
Do you see this as a problem? Is a co op shouldn't everyone be treated the same and get say 10% on money invested.

I am not keen because once you do that you are treating the capital like a share. Next you get pressure to issue shares, then you get pressure to allow the shares to be saleable and finally the farmers loose control as the shares are sold to non farmers. That has happened to a number of co-ops around the world and in the end the supplying farmers loose out.

Orginally many co-ops had no capital accounts, so although your money helped build the co-op you never saw it back. At least this system allows you access to some of the capital when you retire from the co-op.

Einstien · Jan 24, 2017

farmer on a bike said:
That is all part of the milk price included in all the quotes of milk price so totally irrelevant

farmer on a bike said:
In the last 2 months Arla paid out more on average per litre than the milkprices.com Arla standard litre, because the average fat and protein was above the standard litre. So what you say doesn't make much sense.

If you have a low average fat and protein and you local dairy pays on a flat per litre basis or has lower quality standards then you could be better off. But that is about your farm and your management not about Arla's capital structure.

The only other explanation is that you are talking about the joining fee if you joined via AFMP/AmCo. The money deducted sits in your own capital account and is repaid on leaving. There is nothing secret about that.

No I was talking about a "Standard" liter - before BF and other Quality adjustment - that would be to be expected with any buyer really...

Identical Milk into Arla and one of the Smaller processors, why can't ARLA pay more for it as a result of all the investment in processing....?

cornishfarmer · Jan 24, 2017

@farmer on a bike a lot has changed since Arla and milk link joined. Think we all had about 5ppl in on the litres when we signed up. Will this get looked at in the future? So every one is equal again at 9/10/11ppl invested or what ever on litres produced now

farmer on a bike · Jan 24, 2017

cornishfarmer said:
@farmer on a bike a lot has changed since Arla and milk link joined. Think we all had about 5ppl in on the litres when we signed up. Will this get looked at in the future? So every one is equal again at 9/10/11ppl invested or what ever on litres produced now

It varied depending on how much you had increased production during the pervious few years of Milklink, The maximum was 5ppl and anyone with more had it repaid at that point. Mine was only about 3.5ppl at that time as we had taken on a second farm during the build up of capital in Milklink.

Currently we will each have an amount credited to our capital accounts based on our annual production. I think it will be around 0.3-0.5ppl each year. There is supposed to be a top limit on this of 7.5ppl (from memory) and anything above gets paid out with 13th payment. However their has been a habit of gradually increasing this, but this cannot carry on for ever as it is clear that the capital funds should never exceed 30% of total capital because they risk being classed as money owed to owners (a loan) rather than capital in the eyes of our lenders.

Therefore any changes in the future are likely to try and make capital invested more equal on a ppl basis, but this will be decided by the BoR with board advice, obviously the BoR should take advice from the owners they represent in making the decision.

farmer on a bike · Jan 24, 2017

Einstien said:
No I was talking about a "Standard" liter - before BF and other Quality adjustment - that would be to be expected with any buyer really...

Identical Milk into Arla and one of the Smaller processors, why can't ARLA pay more for it as a result of all the investment in processing....?

If you achieve exactly the standard litre and the standard litre prices are the same you will get the same price. The only issues will be around any joining fee being paid and possibly seasonality, (although with a flat profile it will be the same).

Arla was paying more in 2014 for sure and other were struggling to keep up, my annual average milk prices were 36ppl on one farm and 38.5ppl on the other. At that time we were also benefitting from the currency mechanism so the real Arla price was a bit lower on direct conversion. Now the dramatic drop in the £ has meant the currency smoothing is making us lag behind by about 3ppl. If it were on direct conversion today we would be on 30ppl for February putting us close to the top of the league. So the answer to your question "why?" is clearly the lag caused by the implementation of the currency smoothing.

I should also say that I expect improvement Arla have always been upfront about lagging the market both going up and coming down, so I expect more and will be unhappy if we do not get it in the next 3-4 months.

Einstien · Jan 24, 2017

farmer on a bike said:
If you achieve exactly the standard litre and the standard litre prices are the same you will get the same price. The only issues will be around any joining fee being paid and possibly seasonality, (although with a flat profile it will be the same).

You get the same price yes, but you DONT get the same amount paid into your account (Even worse if you are new to Dairying, and buying in)!

farmer on a bike said:
Arla was paying more in 2014 for sure and other were struggling to keep up, my annual average milk prices were 36ppl on one farm and 38.5ppl on the other. At that time we were also benefitting from the currency mechanism so the real Arla price was a bit lower on direct conversion. Now the dramatic drop in the £ has meant the currency smoothing is making us lag behind by about 3ppl. If it were on direct conversion today we would be on 30ppl for February putting us close to the top of the league. So the answer to your question "why?" is clearly the lag caused by the implementation of the currency smoothing.

Ahhh the good old 2014.... I cant really remember ever seeing Arla (normal Arla manufacturing or whatever the masses get) at the top of the league table, which is surprising with all the investment?????

farmer on a bike said:
I should also say that I expect improvement Arla have always been upfront about lagging the market both going up and coming down, so I expect more and will be unhappy if we do not get it in the next 3-4 months.

Farmer1001 · Jan 24, 2017

The beauty of the Arla model lagging behind on price movement is it allows producers to see whats coming in advance.

Einstien · Jan 24, 2017

runny egg said:
The beauty of the Arla model lagging behind on price movement is it allows producers to see whats coming in advance.

That's not necessarily a good thing LoL

Agreed, but contrary to what FoB says, you're paying for this!!

Farmer1001 · Jan 24, 2017

Einstien said:
That's not necessarily a good thing LoL

Agreed, but contrary to what FoB says, you're paying for this!!

I am not Arla and yes agree.

farmer on a bike · Jan 24, 2017

Einstien said:
That's not necessarily a good thing LoL

Agreed, but contrary to what FoB says, you're paying for this!!

How? You have no idea what you are talking about. You also cannot explain why "you DONT get the same amount paid into your account"

Just because you repeat rubbish enough times it does not make it true.

tomtom8 · Jan 24, 2017

look,..this is the milk price tracker..ok,but it seems tobe nothing but arla this arla that,..cant we have a separate arla page where you can all rant,if i see arla in the hedding i now pass by,that fed up of it,..

bar718 · Jan 24, 2017

tomtom8 said:
look,..this is the milk price tracker..ok,but it seems tobe nothing but arla this arla that,..cant we have a separate arla page where you can all rant,if i see arla in the hedding i now pass by,that fed up of it,..

100% agree the anti arla brigade are becoming like the vegans , twist anything they hear to spin there side of the story ignoring the truth and not listening to the correct answers as it does not fit in with there way of thinking .
If you are a member of arla you have a genuine right to ask the questions , if not a member then quite frankly it does not concern you although by the reading of a lot of the comments you might think differently .

jackrussell101 · Jan 25, 2017

25.7ppl December paid to bank. Muller non-aligned.

4.45 bf
3.4 ptn
114 scc
36 bctn

peclova · Jan 25, 2017

jackrussell101 said:
25.7ppl December paid to bank. Muller non-aligned.

4.45 bf
3.4 ptn
114 scc
36 bctn

Better than my poor return on capital employed and effort expended.

BF 4.53%
P 3.61%
SCC 94
Bacto 34

Just 24.48p/ltr paid into bank by Arla for December collections.

Sid · Jan 25, 2017

peclova said:
Better than my poor return on capital employed and effort expended.

BF 4.53%
P 3.61%
SCC 94
Bacto 34

Just 24.48p/ltr paid into bank by Arla for December collections.

How does that compare to milkprices.com

Milk Price Tracker

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0 %

Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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