Milk Price Tracker

[farmer on a bike]

Joke of the day right - you don't think a) it costs any money to run the system - if it costs, you are paying for it trust me! and b) you don't think that by delaying revenue either way has a negative (and positive) effect on ARLA's financials, thus as they are overall debt heavy, this is going to be costing something to achieve, even if it is an opportunity cost, the member will ultimately pay!

Ah well keeps another team of ARLA employee's busy, and give the paid attendees of a meeting something to talk about I guess!

You are not taking in what I have written. I could work it out with a calculator in 15 minutes, that is the cost. No revenue is delayed, as I explained, so it has no effect on Arla's results and so it has no effect on debt. You are trying to over think something that is very simple.

Imagine it didn't exist and you had to do the conversion on a daily basis, that would require a team of accountants to get it right. This greatly removes complication of calculation.

 

[farmer on a bike]

NO, take a young farmer trying to get into Dairying and tell them they have bankroll ARLA's Capital Requirements out of their milk cheque at the same time as trying to get their own cashflow in order - sorry but as the majority of long term farm owners can't make a Dairy Farm work, this just does not work, THIS IS THE difference between a Paper Plan and Reality...

Apart from the initial joining fee, the capital comes from the profit and a proportion is allocated in the owners name and is available for them to withdraw if they leave. The rest of the profit is distributed as a 13th payment.

Compare that to a PLC or private company taking your milk. Where does their ongoing capital requirement come from? It comes from the profit, each year some money will be reinvested. What then happens to the rest of the profit? It is paid out in dividend to the share holders.

So the same amount of money is removed before the milk price is paid in a PLC or private company, just none of it ever gets back to the farmers.

 

[cornishfarmer]

Apart from the initial joining fee, the capital comes from the profit and a proportion is allocated in the owners name and is available for them to withdraw if they leave. The rest of the profit is distributed as a 13th payment.

Compare that to a PLC or private company taking your milk. Where does their ongoing capital requirement come from? It comes from the profit,

Remember the £100/month basic cost and 1.023ppl deduction that will add up to more than the 13th payment in many cases

 

[Sid]

Apart from the initial joining fee, the capital comes from the profit and a proportion is allocated in the owners name and is available for them to withdraw if they leave. The rest of the profit is distributed as a 13th payment.

Compare that to a PLC or private company taking your milk. Where does their ongoing capital requirement come from? It comes from the profit, each year some money will be reinvested. What then happens to the rest of the profit? It is paid out in dividend to the share holders.

So the same amount of money is removed before the milk price is paid in a PLC or private company, just none of it ever gets back to the farmers.

Shareholders get paid on the proportion of the business they own not on what they supply the business.

 

[supercow]

A measly 0.7 p? U got ur Arla resignation in @meekers ?

 

[Farmer1001]

milkprices.com ‏@MilkpricesCom 16h16 hours ago
Miserable past week on the Futures 1.3ppl wiped from UKMFE. Darker clouds are forming as buyers are now stepping back from commodity markets.
Basically 20% off spot milk and cream from the highs and we havent even hit spring. Get a plan in place and consider if you could survive another downturn like the last - because the next could be far worse if we carry on as we are.

 

[Beef farmer]

milkprices.com ‏@MilkpricesCom 16h16 hours ago
Miserable past week on the Futures 1.3ppl wiped from UKMFE. Darker clouds are forming as buyers are now stepping back from commodity markets.
Basically 20% off spot milk and cream from the highs and we havent even hit spring. Get a plan in place and consider if you could survive another downturn like the last - because the next could be far worse if we carry on as we are.

The only reason it will be worse is because farms haven't had time to build up a cash reserve.
If it gets down to 17p again, cows will be killed and it will swing again.

I think most are surprised at how quick mill output has increased. Tanker came here and couldn't fit all the milk on. Not because of me, but farm down the road.

 

[Sid]

The only reason it will be worse is because farms haven't had time to build up a cash reserve.
If it gets down to 17p again, cows will be killed and it will swing again.

I think most are surprised at how quick mill output has increased. Tanker came here and couldn't fit all the milk on. Not because of me, but farm down the road.

Its always someone elses fault(I'm not saying its yours but you know what I mean.)

 

[More to life]

Its always someone elses fault(I'm not saying its yours but you know what I mean.)

@Beef farmer expanding never

 

[Einstien]

Apart from the initial joining fee, the capital comes from the profit and a proportion is allocated in the owners name and is available for them to withdraw if they leave. The rest of the profit is distributed as a 13th payment.

Compare that to a PLC or private company taking your milk. Where does their ongoing capital requirement come from? It comes from the profit, each year some money will be reinvested. What then happens to the rest of the profit? It is paid out in dividend to the share holders.

So the same amount of money is removed before the milk price is paid in a PLC or private company, just none of it ever gets back to the farmers.

I have the T shirt for this - and trust me it's full of holes and worn out because the Money always seems to be coming in the future!

If the same amount of money is removed before the milk price is paid - why was the money paid into my account each month so much better from a local dairy, even though the initial price per liter was identical. This is the reality! Yes you'll say the 13th payment and less volatility will make up for that but a) NO they don't, and b) Definitely don't when a local dairy can beat Arla's PPL.

Answer this then - if ARLA's secret is the power of raising this capital from the "Members" and using it to prop up supreme dream world investment to make them so efficient, why is the price they pay per liter NOT now significantly more than any one else's? And why wont it ever be.....?

If it's not going to ever be significantly more than a local dairy, the capital cost to the farmer is never rewarded.

 

[bigw]

The only reason it will be worse is because farms haven't had time to build up a cash reserve.
If it gets down to 17p again, cows will be killed and it will swing again.

I think most are surprised at how quick mill output has increased. Tanker came here and couldn't fit all the milk on. Not because of me, but farm down the road.

I think some people have seen the shortage of milk in the back end as a signal to produce more as the market is short. The problem is that intervention stores are full and all this product needs to come back onto the market and buying into intervention likely wont happen this this spring if the price crashes.

Cheese makers who made cheese on cheap milk last spring should do ok you would think though.

 

[Beef farmer]

Its always someone elses fault(I'm not saying its yours but you know what I mean.)

I'm happy to take the flack.

 

[Manney]

@Beef farmer did you get your core reallocation letter today?

They've given me a few off the extra litres I applied for but naff all really.

 

[O'Reilly]

I have the T shirt for this - and trust me it's full of holes and worn out because the Money always seems to be coming in the future!

If the same amount of money is removed before the milk price is paid - why was the money paid into my account each month so much better from a local dairy, even though the initial price per liter was identical. This is the reality! Yes you'll say the 13th payment and less volatility will make up for that but a) NO they don't, and b) Definitely don't when a local dairy can beat Arla's PPL.

Answer this then - if ARLA's secret is the power of raising this capital from the "Members" and using it to prop up supreme dream world investment to make them so efficient, why is the price they pay per liter NOT now significantly more than any one else's? And why wont it ever be.....?

If it's not going to ever be significantly more than a local dairy, the capital cost to the farmer is never rewarded.

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

 

[farmer on a bike]

Remember the £100/month basic cost and 1.023ppl deduction that will add up to more than the 13th payment in many cases

That is all part of the milk price included in all the quotes of milk price so totally irrelevant

 

[farmer on a bike]

Shareholders get paid on the proportion of the business they own not on what they supply the business.

Same cake just a different way of cutting it

 

[farmer on a bike]

I have the T shirt for this - and trust me it's full of holes and worn out because the Money always seems to be coming in the future!

If the same amount of money is removed before the milk price is paid - why was the money paid into my account each month so much better from a local dairy, even though the initial price per liter was identical. This is the reality! Yes you'll say the 13th payment and less volatility will make up for that but a) NO they don't, and b) Definitely don't when a local dairy can beat Arla's PPL.

Answer this then - if ARLA's secret is the power of raising this capital from the "Members" and using it to prop up supreme dream world investment to make them so efficient, why is the price they pay per liter NOT now significantly more than any one else's? And why wont it ever be.....?

If it's not going to ever be significantly more than a local dairy, the capital cost to the farmer is never rewarded.

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.

 

[stablegirl]

FOAB I'm normally agree with what you say.

But milkprices.com is a standardised litre a fair way of comparing. If the average got more its because they sent more milk solids and deserve more.

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.

Local dairies will often pay more and thats great but a lot of us don't have a local dairy. The price they pay will often be relative to a basket so for you guys you should hope for a successful arla since you probably get Arla +1ppl or 2ppl etc.

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.

 

[Sid]

Same cake just a different way of cutting it

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.

 

[farmer on a bike]

I totally agree that if you send more solids you deserve more, my point was the possible reason an Arla member doe not achieve the standard litre is because they are sending less solids than a standard litre and not because of some mythical capital deduction.

I agree to a point about the 13th payment, however if we treat it as purely a return on your capital account then it represents at least a 10% return and often a lot more if you have been expanding.

Remember once you are a full member you also receive an addition to your capital account each year, which represents an extra 5% on your money which you will be able to withdraw on leaving.