Milk Price Tracker

[rusty]

Are the farmers in Victoria who supply Fonterra on a direct supply contract or are they members of the coop now? It’s 12 years ago since I was in Victoria and I think Fonterra had just moved in then.

 

[puntabrava]

In a word yes. I'm still on Tesco, others I know now under notice. Have you got a link to the Twitter?

I have a few customers around Honiton who have handed notice to tescos, a dairy farmer I admire told me several months ago that the aligned contracts were holding the price back.

 

[Ben B]

Are the farmers in Victoria who supply Fonterra on a direct supply contract or are they members of the coop now? It’s 12 years ago since I was in Victoria and I think Fonterra had just moved in then.

When Fonterra came to us looking for milk the contract for northern Victoria. The normal Vic price ie $8.22 per kg was payed and we would be payed the extra bonus northern price for every kg we could commit to supplying every single day.

The northen Vic bonus price you signed a contract price but for the convental price no one is contracted. Where I am Northern Vic/southern NSW most farms fall into the 2 million l's plus and are all mostly flat so most farms around here are all contracted to someone for some period.

Fonterra Australia is still owned by Fonterra NZ but there is some talk of a demerger of of Aus from the NZ business.

Where in Victoria where you working?

 

[rusty]

When Fonterra came to us looking for milk the contract for northern Victoria. The normal Vic price ie $8.22 per kg was payed and we would be payed the extra bonus northern price for every kg we could commit to supplying every single day.

The northen Vic bonus price you signed a contract price but for the convental price no one is contracted. Where I am Northern Vic/southern NSW most farms fall into the 2 million l's plus and are all mostly flat so most farms around here are all contracted to someone for some period.

Fonterra Australia is still owned by Fonterra NZ but there is some talk of a demerger of of Aus from the NZ business.

Where in Victoria where you working?

I was only over for a week as part of my Nuffield Scholarship travels. I was in the Sheparton area staying with Jamie Snell but also had a couple of days at Lake Boga? in the north and a few days in Gippsland.

 

[Farmer Keith]

I have a few customers around Honiton who have handed notice to tescos, a dairy farmer I admire told me several months ago that the aligned contracts were holding the price back.

They’ve been happy enough to take the premium for the last decade though. Interesting how many are jumping ship. Let’s just say for example the market collapses in 18 months time but those aligned retailer pools return to the top paying 10% over the market again, will the model still be broken?

 

[Shuffle]

They’ve been happy enough to take the premium for the last decade though. Interesting how many are jumping ship. Let’s just say for example the market collapses in 18 months time but those aligned retailer pools return to the top paying 10% over the market again, will the model still be broken?

Exactly why I'm incredibly undecided. I keep telling myself give it another month, right or wrong, we will see.

 

[Farmer Keith]

Exactly why I'm incredibly undecided. I keep telling myself give it another month, right or wrong, we will see.

Time to get the crystal ball out, I think what is an absolute certainty is that the market will drop again at some point so the question really is where do you want to be when it does?

 

[Tarw Coch]

They’ve been happy enough to take the premium for the last decade though. Interesting how many are jumping ship. Let’s just say for example the market collapses in 18 months time but those aligned retailer pools return to the top paying 10% over the market again, will the model still be broken?

You can’t have your cake and eat it.
The aligned contracts offer a price above cost of production plus a profit margin and presumably still do today .
I’m sure over a long term average the aligned contracts will continue to be the best paying.

For anyone not wanting to put up with the mither, now would be a good time to get out as you can possibly get more elsewhere and to a fair degree pick where you want to go

 

[Ben B]

I was only over for a week as part of my Nuffield Scholarship travels. I was in the Sheparton area staying with Jamie Snell but also had a couple of days at Lake Boga? in the north and a few days in Gippsland.

Very nice. 12 years ago you would have been around just after a very rough time for our region with the droughts and water security.

 

[frederick]

When farmers a baulking at cost of production contracts it just proves fixed price contracts are a dangerous thing.
Let's just hope the Nfu and defra don't cock it up for all of us
Bizzarely the milk market has actually proven the most responsive to market circumstances and the least in need of further regulation.

Pork and poultry really need the help.

 

[Will Blackburn]

They’ve been happy enough to take the premium for the last decade though. Interesting how many are jumping ship. Let’s just say for example the market collapses in 18 months time but those aligned retailer pools return to the top paying 10% over the market again, will the model still be broken?

There is no premium being paid if you account for contract requirements, cream sales and the plum geographical spread of producers (haulage costs).

Muller must have been absolutely apoplectic when Sainsbury ripped out 50% of their hard earned Cheshire producers and slotted them into Tomlinsons.

 

[Farmer Keith]

There is no premium being paid if you account for contract requirements, cream sales and the plum geographical spread of producers (haulage costs).

Muller must have been absolutely apoplectic when Sainsbury ripped out 50% of their hard earned Cheshire producers and slotted them into Tomlinsons.

Give yourself a shake. If I’d been supermarket aligned for the past decade I’d be tens of thousands of pounds better off even after jumping through the hoops.

 

[lazy farmer]

Give yourself a shake. If I’d been supermarket aligned for the past decade I’d be tens of thousands of pounds better off even after jumping through the hoops.

depends if the money had been spent wisely or not.

 

[Barmyfarmer]

depends if the money had been spent wisely or not.

With how quick they have been moaning it would suggest maybe not as wisely as you would like to think

 

[Will Blackburn]

Give yourself a shake. If I’d been supermarket aligned for the past decade I’d be tens of thousands of pounds better off even after jumping through the hoops.

If Aunty had bo11ocks she would be your Uncle.

 

[frederick]

depends if the money had been spent wisely or not.

The aligned are oddly at a disadvantage now. They didn't experience the last downturn so didn't cut their cloth accordingly. A lot of those savings stick so the non aligned would on average be running a lower cop model enabling a lot of this price increase to stick.

 

[Shuffle]

Time to get the crystal ball out, I think what is an absolute certainty is that the market will drop again at some point so the question really is where do you want to be when it does?

This is the main thing keeping me here, I remember supplying in to Muller at 18ppl or so, plus the ALDI bonus at the time. There's alot further to fall now with current COP, it could be an utter bloodbath. I've heard some folk within the group arguing we should just take whatever we're given now because they once paid alot more money. I don't agree with that, I think we need to call them out more than ever now and get changes made to the group that we need ready for the bad times, especially given the COP price wasn't and isn't keeping up. At the moment we have some leverage for the first time in a very long time.

For anyone not wanting to put up with the mither, now would be a good time to get out as you can possibly get more elsewhere and to a fair degree pick where you want to go

This is the other side of it, lost my only full time staff, father is getting older and wants to do less. Can I afford to be in the office box ticking when I need to be on the ground keeping things moving forward? It could well only be me here alot of the winter, with 150 cows to look after, plus the youngstock.

Pork and poultry really need the help.

This is absolutely true.

There is no premium being paid if you account for contract requirements, cream sales and the plum geographical spread of producers (haulage costs).

Muller must have been absolutely apoplectic when Sainsbury ripped out 50% of their hard earned Cheshire producers and slotted them into Tomlinsons.

I wouldn't say no premium, but it's far less lucrative than it looks from the outside. Cost of being in the group, plus deductions you get on your litre that don't apply to non aligned take a bite out.

The aligned are oddly at a disadvantage now. They didn't experience the last downturn so didn't cut their cloth accordingly. A lot of those savings stick so the non aligned would on average be running a lower cop model enabling a lot of this price increase to stick.

I think that's true, the aligned COP is intrinsically higher also because of all the hoops you have to jump through. Resigning would significantly lower my COP, which when you would also get a big jump in the price makes it look very attractive.

 

[vantage]

depends if the money had been spent wisely or not.

You like racehorses don’t you?

 

[Will Blackburn]

The aligned are oddly at a disadvantage now. They didn't experience the last downturn so didn't cut their cloth accordingly. A lot of those savings stick so the non aligned would on average be running a lower cop model enabling a lot of this price increase to stick.

Some will some won't, like it's always been. I would say the spread of COPs is huge, then again farmers are very competitive and do their very best to not to include costs they really should include., and vice versa.

 

[TheRanger]

Any examples of these supermarket "hoops" the rest of us don't have to worry about?