So much for market forces......

[Derrick Hughes]

Market forces have just informed me that my milk price is being lowered by 1.5ppl. It should be rising due to the currency weakening and the time of year, but it isn't. Fact is that there is just too much milk and the export market is disappearing due to you-know-what. So a substantial price cut is what we get.

Most farmers are saying it's due to spring calvers and an abundance of grass , when it dropped to 15 p a few years ago what was the reason then ?
But if they put tariffs on dairy imports the you could make a killing

 

[Kiwi Pete]

Does it though?
You've been making good money from other ventures.
If you solely depended on that 100 acres would you make enough
to pay your bill's ,have similar expectation of city dwellers and be
able to maintain and reinvest in your holding?

Good question - that all depends on your bills!

I like doing stuff for my own reasons, not necessarily to maximise "my income" but to maximise our return on investment, which is an increasingly unorthodox thought process (especially in hamsters)

Big spenders, we are not - got a wee bit of money but it's fairly well hidden (and not in plain sight) but the ranch does pay its way.

Ie the ranch pays for itself and the winter-grazing is most of the profit; I could not do that at all and still make a dent in the loan on the land, above 7.5%pa I would be forced to do some winter grazing and above 12% I would have to subsidise the interest payments from outside funding.
Happily, it's 5%.

It's really just a hobby, and something to be enjoyed, this year I'll invest 20-30k into making it more suitable for a primary-age child to operate.
Then they can play with it and grow with the new system, and if they don't want it then I can, as long as I'm healthy.
Or my wife can.

I don't want the farming business to be all about "me", as that is the trap we all fall into at some stage, I want to not be trapped.

 

[ollie989898]

via Imgflip Meme Generator

 

[Bossfarmer]

Market forces have just informed me that my milk price is being lowered by 1.5ppl. It should be rising due to the currency weakening and the time of year, but it isn't. Fact is that there is just too much milk and the export market is disappearing due to you-know-what. So a substantial price cut is what we get.

i though brexit was supposed to be good for dairy?

 

[lloyd]

via Imgflip Meme Generator

What are market forces lead by?
Events.
If you don't react to the event then your at the mercy of the market!

 

[farmerm]

What are market forces lead by?
Events.
If you don't react to the event then your at the mercy of the market!

When you produce a product that has a 6, 12, 18+ month production cycle, how quickly can you react to an event?

 

[lloyd]

When you produce a product that has a 6, 12, 18+ month production cycle, how quickly can you react to an event?

I agree it's not easy to turn off certain agricultural
production like a tap but some of these events come
with a warning well ahead of the eye of the storm.
There is plenty of evidence of forth coming turmoil
In lamb exports so who's to blame
if the fat price collapses and you've bought
store lambs based on past years marketing?

 

[DRC]

To much money pushed around to keep pen pushers in work . That's one of the reasons I voted out . Cut loose from a vast swathe of them in one fell swoop

You don’t think it’s the UK that gold plates the rules and pen pushing then?

 

[Henarar]

you can't gold plate something that isn't there

 

[Tarw Coch]

i though brexit was supposed to be good for dairy?

I have a theory it might not be, at least not if others think like you and decide to get into milk as everything will be rosy. The market will become over supplied and them pesky market forces will kick in, its probably what the duck is experiencing right now with his milk price cut as production is up on last year.

 

[Derrick Hughes]

Depends if you can store it or not

 

[Bury the Trash]

I have a theory it might not be, at least not if others think like you and decide to get into milk as everything will be rosy. The market will become over supplied and them pesky market forces will kick in, its probably what the duck is experiencing right now with his milk price cut as production is up on last year.

Possibly the same with early lambing, in that it might be deemed too high cost then instead of quitting those flocks will possibly change to later lambing to lower costs and in doing so increase lambs later on thus further reducing that normal dip in the market.

 

[Derrick Hughes]

I can remember one year my lambs avarage £10 .around the time of BSE

 

[Cowabunga]

Most farmers are saying it's due to spring calvers and an abundance of grass , when it dropped to 15 p a few years ago what was the reason then ?
But if they put tariffs on dairy imports the you could make a killing

They are not going to put tariffs on imports. They have stated again and again that they will have a free trade policy for cheaper food, which means cheaper at the UK farm gate to compete.

Others WILL NOT reciprocate. They will take every advantage of us and, as stated in the article, in all probability add the WTO rates to our exports to them. This will kill the job in the UK. Hence the warning at the end of the article that many suppliers will find it impossible to afford. That means us!

 

[Bury the Trash]

I can remember one year my lambs avarage £10 .around the time of BSE

That cost us a packet as well and ironically that was nothing to do with sheep either.

 

[Cowabunga]

I have a theory it might not be, at least not if others think like you and decide to get into milk as everything will be rosy. The market will become over supplied and them pesky market forces will kick in, its probably what the duck is experiencing right now with his milk price cut as production is up on last year.

Yes, its partly that but also if there is a hard brexit, as looks more likely than not, then our exports of cheese and other dairy products will be subject to delays and tariffs. Therefore if I was a EU based bulk buyer currently, I would be sourcing not from the UK but from elsewhere, especially if the UK supplier could not afford to pay the tariff. The risk alone is enough to drive buyers to alternatives. Hence less demand from now on.

It is entirely possible and indeed probable that some dairies that export a high proportion of their production, such as some cheddar and particularly mozzarella factories will be forced to reduce output drastically or even shut down. That will significantly further increase the supply of milk with nowhere to go. Prices would undoubtedly tumble and many farms might not even be able to sell their milk at any price, just like the factories.

 

[Derrick Hughes]

Dont we import a lot more dairy product than we export .the only liquid milk is from North to Southern Ireland . Nearly 20 % of dairy products being imported

 

[Cowabunga]

Dont we import a lot more dairy product than we export .the only liquid milk is from North to Southern Ireland . Nearly 20 % of dairy products being imported

I fail to see what that has to do with anything really. You may wish it did, but the reality is that it doesn't. You must remember the drastic effect that the loss of export markets for calves had on that market, even though the UK cattle market is huge. Also you evidently remember the foot and mouth outbreaks when exports were effected, so why do you imagine that any other reason for the loss of export markets would have any less adverse effect?

 

[ollie989898]

The Duck would blame anything on brexit. Weather, cricket scores, 1.5ppl its all old hat.

 

[caveman]

Is this really the duck?
The dirty Welsh Don Jan?