ollie989898
Member
Show me other industries where a young bloke could just go it alone and succeed?? What makes dairy farming so special? It's a business, and running a business is subject to numerous pitfalls. Twas ever thus.
Will anybody sign the petition to bring back the Milk Boards
- Thread starter westwards
- Start date
Show me other industries where a young bloke could just go it alone and succeed?? What makes dairy farming so special? It's a business, and running a business is subject to numerous pitfalls. Twas ever thus.
ollie989898
Member
Being fecked is when you are with a milk buyer who is paying you less than it costs you to produce it and they know it, and when the same buyer with retailer contracts pay some of the suppliers enough to cover their costs and a little bit for profit. Its the have's and the have not's............ simples !!
It is surely up to the individual to decide which buyer they will deal with? If everyone who had an issue with their buyer stopped dealing with them would they take notice and listen, do you think?
ollie989898
Member
The issue you will have is this. So you want a centralised milk buyer and distributor. Fine. How are they to be financed and what will the 'national milk price' be?
Farmer X keeps 900 cows all indoors 365 on a high input system and knows his COP. Lazy Farmer keeps 200, works part time by doing the very minimal amount of work and knows his COP.
You sure as heck will not find a milk price that suits both.
Farmer X keeps 900 cows all indoors 365 on a high input system and knows his COP. Lazy Farmer keeps 200, works part time by doing the very minimal amount of work and knows his COP.
You sure as heck will not find a milk price that suits both.
lazy farmer
Member
- Location
- som/dor border
True particularly when the aligned price is lower.
lazy farmer
Member
- Location
- som/dor border
But what really amazes me on this subject is apparently we want to go from a situation where 50%(apparently) are being shafted back to a situation where we were all shafted, but at least we were doing it together.
ollie989898
Member
I can understand people who feel they are being shafted and have little option to change because of their geography meaning they have few alternative buyers. But in this region, where there are multiple buyers, it very much seems like a competitive arena as buyers offer what money and terms they do and people are free to change and supply whoever they like. More and more it seems the actual baseline standard price per litre is not the only consideration, either.
£1/liter would suit both.
lazy farmer
Member
- Location
- som/dor border
Butter and powder mountains ahoy!
Yeah for sure, north of 30ppl the same, south of 25ppl the opposite.
New to the game in relative terms, but I guess you just all got too good at what you do.
Exactly
- Location
- South Molton
I thought there was already a MMB up and running?
I don't know how successful it has been?
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www.freerangemilk.net
I don't know how successful it has been?
Tonka
Member
- Location
- N Yorkshire
Big, is certainly not always best.....
- Location
- Montgomeryshire
I wasn't suggesting for one minute that it is. A pooled milk price meant that he was heavily subsidised whilst producing a substandard product that would be unsaleable by today's standards.
The NFU cannot do anything about 'retailer dominance', as the retailers pay more to belong to the NFU than you do. You have no national representation. You are on your own.
Farmer1001
Member
In 2016 very successful because the price was on its arse, as soon as price went up interest and support disappeared. Coincidentally when COVID kicked in and the FreshWays and Muller situations began to bite I was contacted to see if I would help promote and place milk. Thanks but no thanks, I was happy to help before, and continue to do so locally with some retailers who are keen to do their own thing but I dont need the hassle, the kicking or criticism. Shame really as dairy could benefit like poultry and pork sectors by expanding their options in an effort to retain consumers in an ever more competitive world all fighting for a share of the consumer. As soon as the issue was turned into aN industry debate/argument about “system” rather than an opportunity to meet consumer demands then the opportunity was gone. I’ve no idea how well ND is doing but he blew it when he pursued a campaign of system bashing rather than consumer opportunities. IMO
@ollie989898 Its seems everything must be fine below the M4 for you guys, have there been any producers in that area that you know who have been given notice to quit ?
Here in Scotland 2 milk buyers ( Muller and Grahams) have given several producers notice and if these guys want to continue to milk cows their only option at the present is Yewtree and for the poor guy's in Aberdeenshire some of who were on a Tesco contract the new cost of haulage will be near 5ppl to supply Yewtree. Do the maths.
But nearer to your end of the country many on contracts with Freshways, Medina and County Milk have had very hard time, with some giving up because there are no other buyers offering contracts.
I have a relative who was trying to sell a 500 acre dairy farm 15 miles from Muller Bellshill and he was on a Tesco contract, Muller would not even give any prospective buyers even a non aligned contract and the farm has been split up. So please remember how lucky you are in your area.
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Farmer1001
Member
Tbh the West Country is not the land of milk and honey Ollie makes out, but better than some others.
The thing that makes this current problem in the UK dairy industry particularly different from other industries, especially ones that produce commodities, is this.
Everything has a price equilibrium in economics. If the price of something goes up, because of a shortage or increase in demand, then supply will increase as producers find it profitable to do so, investing in extra production.
If the price of something goes down, because of a glut of supply or a drop off in demand, then supply will reduce as producers profits are pinched as they find it unprofitable to chase extra production or maybe even exit production altogether.
Thus in the long run, the price of something will settle at an equilibrium level. This may still mean that there are some poor inefficient operators that struggle to make a go of it at this price level, these producers are then pushed out by the good efficient operators who can still make profitable returns at this price level, and thus gain market share which the poor inefficient operators lose.
Now here's the thing with milk, it's milk right, milk is milk, so there should be an equilibrium price for it, now what would that be?
well understandably there will be regional differences of course, Somerset and Scotland are very different places indeed, to farm and as market places. But really factoring in some haulage costs or the odd bit of volume related buying, the underlying milk price shouldn't really be much different across regions, which to be fair for the most part after deregulation, from the late 90s to early 2010s it was, of course ignoring the odd unfortunate milk processor going bump. As it is with cereals, pulses, red and white meat on the whole they don't vary, they have a free market ''equilibrium price''.So an equilibrium price for farmgate milk then, well I'll pitch an average 28p, I'm sure it's not exactly right and will obviously vary with weather and how easy the season goes, but on the whole I bet that would be near to a true equilibrium price for farmgate milk in the UK, efficient producers would make a good go of it at that and some inefficient producers wouldn't. Thus on the whole that average 28p milk price would keep supply in line with demand, thus the true benefits of a free market in all its glory, and referred to by the great 17th century economic thinker Adam Smith as the wonder that is ''the invisible hand'' that guides market prices.
Now here's the thing and why I believe the current UK milk market is broken and is now starting to behave very differently from other free markets, of course with milk being perishable I know it's difficult and I certainly don't have all the answers.
There is a gap that has opened up, starting to emerge in the last dairy crisis 2015-16, and showing itself again late last year and into this year, even before Covid but obviously accelerated by Covid and the poor buggers in the food service sector. But this gap has meant that producers on aligned 31p plus contracts have suffered no dips and can continue to expand with no fear of ever recieving a low milk price that will check them, because in my opinion their 31p plus milk price is well above the equilibrium price level and they are earning too gooder profits. Pay 31p or more to every dairy farmer in the UK and you'll soon see milk coming out of everywhere and a giant surplus problem.
On the other hand, dairy farmers who are non-aligned and recieving a below market equilibrium milk price, circa 25p or below, are at the sharp end. If you get below 25p for any length of time it is unsustainable, there may be some spring calvers that can proudly stick their chest out at the pub and declare they can produce profitably at these levels, but the trouble is we are not a NZ market that makes it all into powder off the spring grass and then goes dry for 3 months, we are the UK and for the most part require an all year round level supply of milk.
When I mentioned a young man could make his way in the world with a herd of 100 cows, what I meant was, 100 cows done right, at 28p, would make a good living. I am seeing young farmers who have risked all, many investing their livelihoods and dreams in becoming 1st generational farmers unfortunately through no fault of their own finding themselves at the sharp end of milk prices. Economies of scale in a free market is one thing, but an unfair rigged market is an entirely different beast.
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ollie989898
Member
I have heard of people who have been given notice by their buyers in this region. I dare say there are some in virtually any part of the UK, and indeed the same will be true of many other countries. Ultimately you have to produce the sort of milk they want and meet their requirements for doing so.
I would argue that because of this, milk is no longer a standardised product anyone can produce; the milk you will be paid for handsomely by buyer A may not be the same thing buyer B wants and these days a lot of buyers are being very specific about how they want milk produced. You can't do X or Y and all the grief or costs associated with that.
As I implied earlier, it is a terrible shame that some producers in other parts of the country are being shafted and have little option to sell elsewhere merely because of geography. I do not understand how the creation of the MMB will solve that, however. What the long term solution is I do not know but I do know that having a milk marketing board is going to cost someone somewhere money to operate and you will never get producers to agree to a universal milk price because they aren't all producing a universal product. I know people who have invested a great deal of time and energy to meet the requirements of their buyer and secure the contract they are on.
ollie989898
Member
No business prospect is ever going to be a total automatic win, and if it was, it would never remain so for long. I have not said the South West was the land of milk and honey, I said there seemed to be a competitive environment when it came to buyers and producers. This has little bearing on the other pressures of the job: drought, flooding or animal health considerations like TB.