More retail pressure

[pappuller]

No good selling it to the supermarkets as liquid for a pish poor price either!

A certain buyer wanted to drop the price it paid for organic milk, no was the reply, well we are paying x, you wont get the milk, we will see.
They didn't get the milk, the milk was shipped elsewhere, and they shouted and were short of product and guess what, paid the price.

We should be sellers of our products not suppliers!

cashflow is the biggest killer though, you divert your milk to a storable product, that's fine but that then leaves a hole in your cashflow if you've got to pay for the milk and haven't sold the product, hence why we have treadmill.

 

[Sid]

cashflow is the biggest killer though, you divert your milk to a storable product, that's fine but that then leaves a hole in your cashflow if you've got to pay for the milk and haven't sold the product, hence why we have treadmill.

That's where a mix is essential, eggs in baskets and product to release to help cashflow.
Spot price is reasonable atm. But a huge slug of milk would soon dent that.

Short term pain can mean long term gain, ask the EX milk link suppliers about that !

 

[pappuller]

That's where a mix is essential, eggs in baskets and product to release to help cashflow.
Spot price is reasonable atm. But a huge slug of milk would soon dent that.

Short term pain can mean long term gain, ask the EX milk link suppliers about that !

Fully agree but alot business's can't stand short term pain nowadays let alone long term

 

[Sid]

Fully agree but alot business's can't stand short term pain nowadays let alone long term

Even with money so cheap.

Just shows the strangle hold multi nationals have over small businesses.

 

[The Agrarian]

This isn't caused by inflexibility in product lines Sid. Moving production to bulk cheddar or powder doesn't solve it. There's enough flexibility out there in the British Isles and Europe to balance out supply across lines as it is. Market efficiency is not perfect, but it's efficient enough for milk to make its way to the better returning products, bringing the value of them back into line.

Plus, you're making the assumption this is purely a liquid milk issue. How do you know? It could also be cheese and butter and yoghurts etc. Moving milk to oversupply another line isn't the answer.

 

[pappuller]

Even with money so cheap.

Just shows the strangle hold multi nationals have over small businesses.

Or just that we all want more !

 

[teslacoils]

Perhaps the suppliers could all turn round and unilaterally put the prices to Tesco up by ten percent?

 

[Sid]

This isn't caused by inflexibility in product lines Sid. Moving production to bulk cheddar or powder doesn't solve it. There's enough flexibility out there in the British Isles and Europe to balance out supply across lines as it is. Market efficiency is not perfect, but it's efficient enough for milk to make its way to the better returning products, bringing the value of them back into line.

Plus, you're making the assumption this is purely a liquid milk issue. How do you know? It could also be cheese and butter and yoghurts etc. Moving milk to oversupply another line isn't the answer.

It's about shorting the market.
Empty shelves drive demand , just look at loo roll. People want what they cant have.

 

[buffalo_soldier]

I do sometimes think that failing to capture more of the retail side has been the biggest biggest missed opportunity of our generation.

Think of all the sub either direct or indirect that has been piled into farms in the last decade or 2.
Wouldn't have been the hardest thing to use that to buy Morrisons et.al. for example. With enough left over to control processing and logistics. Then Tesco suddenly ain't got no business model to dictate jack.
We be doing it for ourselves.

Just lacked someone with the drive, the hanger on model we have now is easier for them I guess.

 

[Sid]

I do sometimes think that failing to capture more of the retail side has been the biggest biggest missed opportunity of our generation.

Think of all the sub either direct or indirect that has been piled into farms in the last decade or 2.
Wouldn't have been the hardest thing to use that to buy Morrisons et.al. for example. With enough left over to control processing and logistics. Then Tesco suddenly ain't got no business model to dictate jack.
We be doing it for ourselves.

Just lacked someone with the drive, the hanger on model we have now is easier for them I guess.

A lot of people are retailing their own produce, farm shops etc.
But the supermarkets offer choice, such a wide range we have never seen the likes of before.
Some people just see the produce leave the farm and dont care where it goes.

 

[Still Farming]

Any their profits are up over 30% so how does this work???

 

[Tarw Coch]

Tesco milk suppliers are on a fairly good milk price, currently in the region of 32-33ppp iirc, reckon there’s room for a bit of a cut there without them feeling too much pain

 

[Sid]

Tesco milk suppliers are on a fairly good milk price, currently in the region of 32-33ppp iirc, reckon there’s room for a bit of a cut there without them feeling too much pain

We pay our suppliers a fair price blah blah blah

 

[Dr. Alkathene]

Tesco allegedly wants in future all its suppliers to plant xxx number of trees per annum on their land. So Tesco can claim credit and good publicity for xxx hundreds of thousands of trees planted annually, reducing Tesco’s carbon footprint.

According to a Tesco supplier I talked to earlier this year.

 

[Tarw Coch]

Tesco allegedly wants in future all its suppliers to plant xxx number of trees per annum on their land. So Tesco can claim credit and good publicity for xxx hundreds of thousands of trees planted annually, reducing Tesco’s carbon footprint.

According to a Tesco supplier I talked to earlier this year.

I e heard that too, second hand, a mate of aate is a Tesco milk supplier.
Not sure ow that works on a rented farm though

 

[Sid]

Tesco allegedly wants in future all its suppliers to plant xxx number of trees per annum on their land. So Tesco can claim credit and good publicity for xxx hundreds of thousands of trees planted annually, reducing Tesco’s carbon footprint.

According to a Tesco supplier I talked to earlier this year.

Isnt that what Arla , and any carbon negative company wants to do as well?

Use their producers for their carbon credits?

 

[Lowland1]

If people don't like Tesco then don't supply them but from personal experience Lidl and Aldi are not white knights riding to help farmers. They have a different business model but in the end it's all about profit Lidl and Aldi are family run so can run on a lower profit than Tesco because they don't have to share it out but if it gets tough they will be telling their suppliers exactly the same thing. For everyone it is going to be survival of the fittest and there will downward pressure on prices because unless we hit the reset button pretty quickly no-one will have any money.

 

[betweenthelines]

One lesson from the start of the lockdown is just how vulnerable the supermarket supply chain is. If everyone left the plug out of the tank for 24 hrs, the shelves would be empty. But when have farmers ever worked together?

I'd be concerned about this story if I worked for Tesco or was a shareholder, because what they are saying is "We can't run our business as well as Aldi & Lidl do, the only way we can compete is by screwing our suppliers"

As an aside, when Muller bought out Wisemans, staff were told that as the Muller business is so big, Tesco won't be able to dictate terms in future.

As has been suggested on here, Muller and Arla should be big enough, and have other markets, that they can tell Tesco this is one game they won't be playing. Tesco can hardly say, "Well, we'll buy elsewhere" can they!

And before anyone suggests it, neither the consumer or the Govt (think balance of payments) would stomach imported liquid milk.

 

[Sid]

One lesson from the start of the lockdown is just how vulnerable the supermarket supply chain is. If everyone left the plug out of the tank for 24 hrs, the shelves would be empty. But when have farmers ever worked together?

I'd be concerned about this story if I worked for Tesco or was a shareholder, because what they are saying is "We can't run our business as well as Aldi & Lidl do, the only way we can compete is by screwing our suppliers"

As an aside, when Muller bought out Wisemans, staff were told that as the Muller business is so big, Tesco won't be able to dictate terms in future.

As has been suggested on here, Muller and Arla should be big enough, and have other markets, that they can tell Tesco this is one game they won't be playing. Tesco can hardly say, "Well, we'll buy elsewhere" can they!

And before anyone suggests it, neither the consumer or the Govt (think balance of payments) would stomach imported liquid milk.

Isnt that like farmers saying we need more money for our milk because we our COP is too high?

Having said that dairy farmers have become alot more efficient in last 40 years.

 

[Moors Farmer]

Tesco milk suppliers are on a fairly good milk price, currently in the region of 32-33ppp iirc, reckon there’s room for a bit of a cut there without them feeling too much pain

I don't think Tesco milk price would be that high. Possibly Booths, and maybe M&S and Waitrose close to it.
Is the cop style contract such a bad thing?