Covid 19.. Milk price impact?

[som farmer]

the flush would have been dealt with without c19, I accept there has been severe and sudden change, but a healthy dairy industry, would have sorted the problem quickly, not the stupidity of some dumping milk, and s/mkts running out. It shows just how fragmented the industry is, and that is the problem, how the hell you sort it, I wouldn't have a clue. But from transport right through to sales, the dairy processers, are fighting each other, for business, at the same time, s/mkts are loving this disjointed approach, forcing ever lower quotes from processors

 

[Princess Pooper]

But cheese isn't a make today, sell tomorrow product like fresh milk, so a fall in sales in April shouldn't have any affect on production. As for social distancing and staff sickness, that's no different than other businesses. But rather than deal with it, they are passing the problem back to the producer.

At the end of the day, all we are talking about is a slightly higher spring flush than normal, due to a combination of good weather and a slight (if any) drop in overall sales of dairy nationally. Normally Dairies would suck it up by losing a couple of pennies on litres sold on spot. However, this year, there is an excuse to dump the problem back on the producer rather than deal with it.

I'm sorry, you don't seem to have a clue about the way that this has affected businesses despite your experience. Have you not been aware of the requirement for staff to self isolate if family members or themselves have symptoms? Are you not aware that some employees will also perhaps take advantage of such a situation? If a lot of your staff are not at work in a relatively small and labour intensive plant (don't forget cheese needs cutting and turning) then that affects production. Then things like social distancing on the packing line, it has to be slowed down. There is also the aspect of splitting shifts, to ensure that all the essential skilled workers are not on shift at the same time so if one goes down it is less likely to spread it to others - this is responsible risk management and a model adopted by many key industries such as power and water. Some jobs can be fairly easily replaced temporarily by agency staff, but someone like a cheese grader isn't that easy to substitute. You say other industries have to deal with this, well some of them just shut up shop! IAE, shut up shop. Car manufacturers closed down because they couldn't put social distancing in place quickly, they have now looked at it, have worked it out and are going to restart production. Our mail has been erratic at times because of short staffing and social distancing at sorting offices. Lots of parts ordered are experiencing delays. Not critical, but they don't have a refrigerated, highly perishable product arriving relentlessly at the door every day that has to be dealt with!

There is also the aspect of managing stock you already have. So your sales drop 20% overnight and you already have 3 months of high quality cheese in stock that you are now going to struggle to sell. You can freeze some of it if you can find capacity. Even if you could run the plant as usual, is is responsible to stick to planned production when you know that sales are down 20% and keep adding to your cheese mountain?

As one of the directors put it, it would be a darn sight easier just to shut the door. But then where would the milk go?

You also don't seem to understand the concept of a co-operative. We, the farmers, plus some retired farmers, basically own the dairy. There is no 'us and them'. If the dairy loses millions of pounds because they pay us full whack despite selling milk at 5ppl that they paid 22 ppl for, then that loss will affect our future milk price, the ability to invest for the future at the dairy and any prospect of future bonuses out of profits. It may also bankrupt them on the basis of cashflow. I haven't actually asked for any special Government handouts at any point, all I've done is highlight the real commercial situation some are finding themselves in and the need for the industry to work together - things like the relaxation of the competition law which has now happened.

 

[Sandpit Farm]

I'm sorry, you don't seem to have a clue about the way that this has affected businesses despite your experience. Have you not been aware of the requirement for staff to self isolate if family members or themselves have symptoms? Are you not aware that some employees will also perhaps take advantage of such a situation? If a lot of your staff are not at work in a relatively small and labour intensive plant (don't forget cheese needs cutting and turning) then that affects production. Then things like social distancing on the packing line, it has to be slowed down. There is also the aspect of splitting shifts, to ensure that all the essential skilled workers are not on shift at the same time so if one goes down it is less likely to spread it to others - this is responsible risk management and a model adopted by many key industries such as power and water. Some jobs can be fairly easily replaced temporarily by agency staff, but someone like a cheese grader isn't that easy to substitute. You say other industries have to deal with this, well some of them just shut up shop! IAE, shut up shop. Car manufacturers closed down because they couldn't put social distancing in place quickly, they have now looked at it, have worked it out and are going to restart production. Our mail has been erratic at times because of short staffing and social distancing at sorting offices. Lots of parts ordered are experiencing delays. Not critical, but they don't have a refrigerated, highly perishable product arriving relentlessly at the door every day that has to be dealt with!

There is also the aspect of managing stock you already have. So your sales drop 20% overnight and you already have 3 months of high quality cheese in stock that you are now going to struggle to sell. You can freeze some of it if you can find capacity. Even if you could run the plant as usual, is is responsible to stick to planned production when you know that sales are down 20% and keep adding to your cheese mountain?

As one of the directors put it, it would be a darn sight easier just to shut the door. But then where would the milk go?

You also don't seem to understand the concept of a co-operative. We, the farmers, plus some retired farmers, basically own the dairy. There is no 'us and them'. If the dairy loses millions of pounds because they pay us full whack despite selling milk at 5ppl that they paid 22 ppl for, then that loss will affect our future milk price, the ability to invest for the future at the dairy and any prospect of future bonuses out of profits. It may also bankrupt them on the basis of cashlow. I haven't actually asked for any special Government handouts at any point, all I've done is highlight the real commercial situation some are finding themselves in and the need for the industry to work together - things like the relaxation of the competition law which has now happened.

Brilliantly described [emoji1360].

I think many processing plants run very lean. Why would you retain additional processing capacity if you won’t need it?

I suspect there are other issues like dispensing cream into 100ml containers if you currently supply foodservice in 25l drums is not going to happen overnight... and that’s just if you have certainty you can sell it. For the processor, plugging that gap in retail isn’t worth the investment to change the production method.

There’s also the issue that it would have been illegal (until the recent change in the law) for processors to discuss internal agreements etc. It’s competition law.

 

[som farmer]

c-19 has left us all in a bloody big tangle, how we will untangle it, ? Speaking to person, who had no option but to furlough the majority of staff, has sorted a way to carry on, apparently, it's not straight forward by any means. I think many have shut their businesses down, as it is easier to do that, than try and keep going, and for certain, there will be a fraudulent side to all this. I have heard of 1 business, about to close, take advantage, to pay his staff for another 3 months ! All those who have railed at the treasuries schemes, to keep jobs, and businesses, going, so when normality returns, we can get going quicker, if they could have done better ? The schemes we have, are nowhere near perfect, do not protect everybody, wide open to fraud, and expensive ! But it is there. I also wonder, how many of those criticising guv, for not re-acting quickly enough at the start, are now shouting about re-laxing those rules !

 

[The Agrarian]

I wonder with all this chat though if some processors were asleep while covid was approaching. Our coop chief executive began planning his response in January, when the implications were starting to become clear. Extra training and retraining began for all workers so that they could be moved to other parts of the factory/business if a hole appeared in the staffing, and extra staff were brought in for training. Costly? Yes. But he had the attitude that having unprocessed/uncollected milk was going to be hugely unpopular with the membership. And he'd have been right. Feed reps have even been trained to operate our feed mill.

 

[betweenthelines]

PP,I work for one of the biggest food businesses in the UK, I know what it's like.

Which is why I'm saying what I'm saying.

 

[frederick]

PP,I work for one of the biggest food businesses in the UK, I know what it's like.

Which is why I'm saying what I'm saying.

Perhaps you should find an industry that you enjoy working in and positively engage in it.

 

[Princess Pooper]

PP,I work for one of the biggest food businesses in the UK, I know what it's like.

Which is why I'm saying what I'm saying.

You might work there, not sure what role, but unless you are a CEO you don't necessarily understand what is happening in that business let alone what is happening in other businesses and how they are being affected.

 

[upnortheast]

I wonder with all this chat though if some processors were asleep while covid was approaching.

Over the years I`ve come to the conclusion that some dairy companies think that forward planning means next weekend

 

[Sid]

Over the years I`ve come to the conclusion that some dairy companies think that forward planning means next weekend

Sitting on a board and discussing long term strategies is far harder then next weekend.

It's a bit like being in government, if it goes tits up you blame the previous administration, if it's all good it's how it was delivered.

 

[Cuckoo's nest]

Moderator note - post removed due to threat of legal action by Grahams The Family Dairy Limited

 

[lazy farmer]

Robert Graham Dairies has asked his producers to cut back by 5-10% and he has greatly increased his sales to doorstep , so why the cutback ?

Would it be so he can buy spot milk at 15p rather than pay his producers 25p

And remember he has a plant in Fife which makes products with a longer shelf life than milk.

It really makes you wonder what the hell is going on @betweenthelines

Would you be aware of how much of their milk went into catering for example?

 

[Scholsey]

Would you be aware of how much of their milk went into catering for example?

I imagine a lot more milk that goes into catering gets thrown away than at home plus people eat/drink more when eating out.

 

[peclova]

What you rather they do have a cast iron contract and go bust?

Obviously the answer to your question is: no.

But, that is not the real longer term issue. Milk contracts appear to be only breakable on one side. You try breaking your milk contract unilaterally and see what happens.

 

[lazy farmer]

As said before get some salt down.
discuss with your vet and get some bloods done for phos.

Obviously the answer to your question is: no.

But, that is not the real longer term issue. Milk contracts appear to be only breakable on one side. You try breaking your milk contract unilaterally and see what happens.

i’m not sure they are breaking the side of the contract.

 

[Scholsey]

Obviously the answer to your question is: no.

But, that is not the real longer term issue. Milk contracts appear to be only breakable on one side. You try breaking your milk contract unilaterally and see what happens.

Works both ways, look at McDonalds, signs a contract with Arla for x amount of organic milk at x price, this happens, McDs don’t want the milk anymore.

Wonder if anyone will use c19 to get out of forward sold wheat contracts if wheat off the field is higher come harvest.

 

[Bald Rick]

Tis simple.....

There is no honour among thieves

 

[Coo man]

Robert Graham Dairies has asked his producers to cut back by 5-10% and he has greatly increased his sales to doorstep , so why the cutback ?

Would it be so he can buy spot milk at 15p rather than pay his producers 25p

And remember he has a plant in Fife which makes products with a longer shelf life than milk.

It really makes you wonder what the hell is going on @betweenthelines

. Ghrahms milk selling at 1.59 for 2 litres at large spar shops in Scottish stores

 

[Sid]

Works both ways, look at McDonalds, signs a contract with Arla for x amount of organic milk at x price, this happens, McDs don’t want the milk anymore.

Wonder if anyone will use c19 to get out of forward sold wheat contracts if wheat off the field is higher come harvest.

No point in forcing the customer or dairy to take your milk if it ends up with them going bust.
Businesses will just Morph into different names and their spin offs will go bust, owe for the milk anyway and no better off.

So instead of you supplying Milkbuyer ltd they will supply milkbuyer 1 ltd who sells onto milkbuyer ltd, milkbuyer 1 ltd go bust, contract torn up, then new company formed, milkbuyer 2 ltd new contract with farmer and milkbuyer Ltd.

Always a way to structure businesses to prevent assets being taken or paying tax as per Amazon ,apple etc.

 

[Cuckoo's nest]

Moderator note - post removed due to threat of legal action by Grahams The Family Dairy Limited