Legislation on milk contracts

[Alfred]

Just been reading this article in British Dairying very interesting and a good read. opinions please?

 

[Deereone]

That makes depressing reading.
I for one vote to buy and sell with as little outside interference as possible.

 

[bar718]

Interesting read and should be seen as a wake up call to the nfu’s to consider all the consequences of what they are asking for.

 

[wasted years]

Interesting read and should be seen as a wake up call to the nfu’s to consider all the consequences of what they are asking for.

Fair point but a journalist wouldn't stand between two sides and throw an opinion around just for the journalists own ends would he?
The processors of any shade will always fight farmers getting their hands on power within the supply chain as they are in such a dominant position.
If we farmers were in that position we would try to hold on too.
Remember , processors argue openly that they should have the final say on price,just imagine if we had that within our gift.

 

[Alfred]

Fair point but a journalist wouldn't stand between two sides and throw an opinion around just for the journalists own ends would he?
The processors of any shade will always fight farmers getting their hands on power within the supply chain as they are in such a dominant position.
If we farmers were in that position we would try to hold on too.
Remember , processors argue openly that they should have the final say on price,just imagine if we had that within our gift.

So are we going to get a gift, and be able to set a price outside of what the markets actually deliver to those processors?
If you think that we can, I'm sorry but you'd better invest in your own processing.
Because there will be no processors left solvent in this country.
That's unless the government are going to take control of all the processing and effectively reinvent the mmb.
Just my opinion, supply and demand set the market and in turn set the price.

 

[wasted years]

So are we going to get a gift, and be able to set a price outside of what the markets actually deliver to those processors?
If you think that we can, I'm sorry but you'd better invest in your own processing.
Because there will be no processors left solvent in this country.
That's unless the government are going to take control of all the processing and effectively reinvent the mmb.
Just my opinion, supply and demand set the market and in turn set the price.

That's not quite true though is it?
Processors can compete with each other for contracts simply by reducing the price paid to their farmer supplier, completely ignoring both market values and marketing opportunities elsewhere.
If Processors had to pay a price, however it was set they could,
1) Charge the customer, more.
2) Innovate,and /or pursue new markets,
3) Stop undercutting other processors with farmers money.

 

[frederick]

How could arla work if the contract stipulated a price for a period. Its a coop it pays out what it gets in. A price for a fixed period would result in more money being paid out than can be afforded or money held in the business.

The only straight forward way around this would be to underpay for 12 months until december and then have a larger 13th payment in march which would be a nonsense.

 

[Alfred]

How do you ensure the loyalty of the customer?
ie. When the Irish/nz/dannish ect....
follow a true market price and flood us with butter and cheese!, undercutting uk contracts, with a raw material price much cheaper than the UK processor's can source it. Because they are tied to a premium price. what do you think the retailers will actually do?

 

[wasted years]

How do you ensure the loyalty of the customer?
ie. When the Irish/nz/dannish ect....
follow a true market price and flood us with butter and cheese!, undercutting uk contracts, with a raw material price much cheaper than the UK processor's can source it. Because they are tied to a premium price. what do you think the retailers will actually do?

You are making up your own scenario, it doesn't have to be like that.

 

[bar718]

That's not quite true though is it?
Processors can compete with each other for contracts simply by reducing the price paid to their farmer supplier, completely ignoring both market values and marketing opportunities elsewhere.
If Processors had to pay a price, however it was set they could,
1) Charge the customer, more.
2) Innovate,and /or pursue new markets,
3) Stop undercutting other processors with farmers money.

I think you may of gone off target with your comment here saying if processors had to pay a price. In any of the comments I have seen both in the agricultural press and nfu press releases have I seen it say that their will be a fixed price that processors will have to abide by, set by the government or an outside body. The fixed price bit is a price your processor offers you for your milk for a fixed period.

 

[wasted years]

Not entirely sure I understand you post @bar718 ?

 

[bar718]

Not entirely sure I understand you post @bar718 ?

In your post you assume that the processor would set a high price and charge a customer more. Customers are free to move their trade elsewhere to a cheaper supplier for one and on a rising market the processor you are contracted to may be able to undercut other processors as they know they have cheaper milk for a set time at the farmers expense.

 

[wasted years]

In your post you assume that the processor would set a high price and charge a customer more. Customers are free to move their trade elsewhere to a cheaper supplier for one and on a rising market the processor you are contracted to may be able to undercut other processors as they know they have cheaper milk for a set time at the farmers expense.

Hopefully, 'it' will be more sophisticated then that.

 

[bar718]

Hopefully, 'it' will be more sophisticated then that.

Hopefully the nfu’s see sense and realise what they are asking for has hidden consequences and pull back and stop it more like.

 

[dairyrow]

with the uk market being 50% fresh milk maybe everybody should have some of that supermarket premium rather than a few. Its the only way we are going to see investment on farms to raise welfare that apparently consumer want to see.

 

[westwards]

with the uk market being 50% fresh milk maybe everybody should have some of that supermarket premium rather than a few. Its the only way we are going to see investment on farms to raise welfare that apparently consumer want to see.

The retailers control the price we are all given, they have far too much control !! I have seen some of the papers on these new contracts and they work fine in Spain !!
Somebody needs to do something with a national CoP of around 28p/litre and a price predicted to drop a few pence below that we are all sleep walking into oblivion !!

The retailers make a mark up of 40-65% on cheese and other dairy products,

There is and always has been enough in the chain for everyone to get a fair kick at the ball, but ever since the Wiseman Bro's came on the big stage OUR share has been taken form producers and given to the retailers and there need to be a rebalancing of the profit share in the dairy market, it might be scary but doing nothing is even more scary !!!

 

[westwards]

Most folks will have had a chance to read the article now, any fresh comments or different idea's.

 

[frederick]

I think the limited comments simply show how little importance farmers attach to this.

 

[organicguy]

Legislation that no milk can be paid for at less than CPO, not farmer or dairy.
Frightening some of the losses this year in the processors.

 

[Alfred]

Most folks will have had a chance to read the article now, any fresh comments or different idea's.

I have to confess that I am a little shocked by the apparent apathy of fellow dairy farmers on this subject. Guess that they are all too busy pushing out an extra ltr of milk or two to worry about the proposed biggest change in the industry since deregulation!!!