Dairy supply, to much milk.

[ollie989898]

Never stopped us!

Exactly, I always drank the stuff from the tank irrespective of the TB angle, and always had milk in tea etc on every customer's farm without a second thought.

 

[Steevo]

I agree.
cheapest ingredient in in coffee is the tap water.

or the air!

 

[Dragon]

or the air!

Absolutely...
same as ice cream sold by the litre

 

[Cowmangav]

That's because the bottling plants are working flat out to meet the increased demand from people sitting at home drinking coffee, while the factories that packed for the catering trade have seen demand disappear and are dumping milk on the spot market where there is only a limited capacity to process the extra. It is carnage out there in the milk market.
If it wasn't for the one indeterminate reactor to the tb test, I would have done the same as a large dairy farmer near Carmarthen [not that one!] did the other day, and sold the whole herd off to cut his losses.
I anticipate, hopefully wrongly, that my average milk price for April and May will be around 12ppl, when my cost of production is double that even at this time of year. That will yield me, a relatively small producer, £15,000/month loss.

I hope I'm wrong.

We had months of those sort of losses when First Milk dropped us to 13 ppl. It did permanent damage , which I never had time to recover from.

 

[Cowabunga]

We had months of those sort of losses when First Milk dropped us to 13 ppl. It did permanent damage , which I never had time to recover from.

It is very difficult to recover from such losses and increases in debt, because all repayments have to be taxed first. That requires a hefty profit margin to achieve which is almost impossible when the supermarkets are constantly being offered cheaper milk by processors that bid down to get the contracts, undercutting each other all the time. It's a mug's game, given the constant re-investment required to keep up standards and the risks involved.

 

[Tarw Coch]

It is very difficult to recover from such losses and increases in debt, because all repayments have to be taxed first. That requires a hefty profit margin to achieve which is almost impossible when the supermarkets are constantly being offered cheaper milk by processors that bid down to get the contracts, undercutting each other all the time. It's a mug's game, given the constant re-investment required to keep up standards and the risks involved.

I’m fortunate enough to have never been on a loss making situation, I was under the impression that losses could be offset against tax and rolled on indefinitely

 

[Cowabunga]

I’m fortunate enough to have never been on a loss making situation, I was under the impression that losses could be offset against tax and rolled on indefinitely

You don't pay tax if you don't make a profit but you might make a profit but it doesn't cover capital repayments and personal drawings. Either way it is no comfort that you pay less tax after a very low profit and increased debt when it comes to actually rebuilding the lost capital, it is all taxed at the full rate.

 

[Farmer_Joe]

Yet some shops are still limiting how much milk customers can buy.

Ha ha got shafted at Tesco tonight with that I have 4 kids plus me and wife we get though milk mega quick we literally making trips just for milk it’s rediculus that farmers are dumping it army should step in makes me furious

 

[Tarw Coch]

Ha ha got shafted at Tesco tonight with that I have 4 kids plus me and wife we get though milk mega quick we literally making trips just for milk it’s rediculus that farmers are dumping it army should step in makes me furious

No doubt panic buying caused problems in retail and the supply chain but these limits on what you can buy are far from ideal given the current situation. Ideally shopping trips should be as infrequent as possible to minimise contact with others which would mean larger amounts purchased less frequently, then there’s those who are also shopping for the elderly and vulnerable along with their own, these limits on purchases mean they have to shop more often than really necessary, throw into the mix that shop opening hours have been reduced and the result is that there’s more folk out shopping at any one time than is ideal if the aim is to reduce contact with others.

As for the army, not sure what they could do about milk being dumped.

 

[Farmer_Joe]

I made the rash assumption it was lack of drivers but re reading it seems not

 

[Hindsight]

You may find the rationing of milk in Tesco and other supermarkets bears little relation to farm supply of milk, or even only some relation to packing and processing capacity.

Milk is regarded as a staple. Thus it must always be seen to be on the shelf available in this 'war'. If it were to run out at an individual shop there would be outrage and more importantly to Tesco result in the customer for their next shop going to a competitor.

So if I were a senior Tesco executive I would simply ration to two bottle per customer, that way every customer gets some milk but as my computer forecast gives me a good forecast of customers I can ensure adequate supply to fill the ration. I have no reason to sell as much of the farmers milk as possible - which may seem at odds to a farmer dumping milk. My main concern is for the name of Tesco, so ensuring a daily supply, albeit rationed is a more logical and rational business decision.

Dairy farmers may even find milk consumption decreases at the moment if my approach is the case.

To date on my visits to local Morrisons, Co-op and Holbeach Tesco I saw good supply of milk, similar to pre Covid days, but in all stores it was rationed. Thus as it was at similar levels to pre Covid days I couldn't understand why it was rationed - other than some fear of it being all taken by a few customers to freeze or horde or whatever.

 

[Tarw Coch]

You may find the rationing of milk in Tesco and other supermarkets bears little relation to farm supply of milk, or even only some relation to packing and processing capacity.

Milk is regarded as a staple. Thus it must always be seen to be on the shelf available in this 'war'. If it were to run out at an individual shop there would be outrage and more importantly to Tesco result in the customer for their next shop going to a competitor.

So if I were a senior Tesco executive I would simply ration to two bottle per customer, that way every customer gets some milk but as my computer forecast gives me a good forecast of customers I can ensure adequate supply to fill the ration. I have no reason to sell as much of the farmers milk as possible - which may seem at odds to a farmer dumping milk. My main concern is for the name of Tesco, so ensuring a daily supply, albeit rationed is a more logical and rational business decision.

Dairy farmers may even find milk consumption decreases at the moment if my approach is the case.

To date on my visits to local Morrisons, Co-op and Holbeach Tesco I saw good supply of milk, similar to pre Covid days, but in all stores it was rationed. Thus as it was at similar levels to pre Covid days I couldn't understand why it was rationed - other than some fear of it being all taken by a few customers to freeze or horde or whatever.

I’m sure you’re right about consumption dropping, if folk get the idea milk is being rationed/in short supply they are going to be careful about how much they use, quite probably using less than they otherwise would

 

[Hindsight]

I’m sure you’re right about consumption dropping, if folk get the idea milk is being rationed/in short supply they are going to be careful about how much they use, quite probably using less than they otherwise would

Yes, afraid so. Law of unintended consequences. What Tesco should be doing if truly supporting farming, rather than supporting Tesco is say loudly there is loads of milk, it is good for you, good for protection against Covid (Chinese did) and it is being thrown away - please take as much as you want and we will keep on bringing it in the shop. But the general public is now so brow beaten by the media and government into this war footing that that message will not resonate. Afraid it is a siege mentality.

I am not at all involved in dairy. But if there are any official figures on milk consumption I would love to know in due course if milk consumption over this period is as before, increased if so by how much, or decreased. If only to prove me wrong.

But rationing in store makes the Tesco head office logistics so much easier to manage!!

 

[tepapa]

You may find the rationing of milk in Tesco and other supermarkets bears little relation to farm supply of milk, or even only some relation to packing and processing capacity.

Milk is regarded as a staple. Thus it must always be seen to be on the shelf available in this 'war'. If it were to run out at an individual shop there would be outrage and more importantly to Tesco result in the customer for their next shop going to a competitor.

So if I were a senior Tesco executive I would simply ration to two bottle per customer, that way every customer gets some milk but as my computer forecast gives me a good forecast of customers I can ensure adequate supply to fill the ration. I have no reason to sell as much of the farmers milk as possible - which may seem at odds to a farmer dumping milk. My main concern is for the name of Tesco, so ensuring a daily supply, albeit rationed is a more logical and rational business decision.

Dairy farmers may even find milk consumption decreases at the moment if my approach is the case.

To date on my visits to local Morrisons, Co-op and Holbeach Tesco I saw good supply of milk, similar to pre Covid days, but in all stores it was rationed. Thus as it was at similar levels to pre Covid days I couldn't understand why it was rationed - other than some fear of it being all taken by a few customers to freeze or horde or whatever.

I also think that by rationing milk. The customer comes back sooner then they would have if they had brought more. Only they spend more money as they buy more than just milk on the second trip. Supermarkets yet again profiting whilst endangering the public with a higher chance of catching the virus.

 

[Cowmangav]

You don't pay tax if you don't make a profit but you might make a profit but it doesn't cover capital repayments and personal drawings. Either way it is no comfort that you pay less tax after a very low profit and increased debt when it comes to actually rebuilding the lost capital, it is all taxed at the full rate.

I don't think you are allowed to make losses for more than five years though, in HMRC eyes.

 

[devonshirekiwi]

Do you think the demand of flour is still the same?

Bakeries won't be needing their giant 50lb + bags of flour or the types they needed. Cake flour. Bread flour. Specialized mixes.

However retail flour has increased. Smaller bags. All purpose flour for the most part. Probably more whole wheat.

Apply that to dairy yet you've got 100 other products involved based on the processing. Cream percentages, cheese, yogurt, ice cream, sour cream, butter....

Much like the meat sectors all of a sudden struggling because people not eating out has dropped the demand in ground beef.

The restaurant industry has lost an exponential amount of revenue in this. What they would normally be using they aren't. That demand is not there. Instead it's people at home who, while demanding the same, aren't really demanding the same. They want different sizes of packaging and different cuts/qualities/end products/etc.

Maybe the quantity demand is the similar as a whole, but nothing else is.

Apparently in NZ the problem with flour is a shortage of packaging for the1kg bags, still available in the large bakers bags.

 

[Will Blackburn]

You don't pay tax if you don't make a profit but you might make a profit but it doesn't cover capital repayments and personal drawings. Either way it is no comfort that you pay less tax after a very low profit and increased debt when it comes to actually rebuilding the lost capital, it is all taxed at the full rate.

There is credit when the balance sheet is hit, that offsets any subsequent rebuilding of capital, no way should there be a double take.

 

[Steevo]

Apparently in NZ the problem with flour is a shortage of packaging for the1kg bags, still available in the large bakers bags.

It’s the same here. Packaging and packaging plant capacity.

 

[tw15]

Simple answer to packageing shortage they sould just have a ibc of milk and you bring your own used milk carton to fill . Every house will have a milk carton that is holding milk at the moment if they use milk that is .

 

[Steevo]

Simple answer to packageing shortage they sould just have a ibc of milk and you bring your own used milk carton to fill . Every house will have a milk carton that is holding milk at the moment if they use milk that is .

or those dairy vending machines many farms have struggled to make profitable.