Runboard.com
You're welcome.

runboard.com       Register for a free global account (learn about it) |
Log in: (), globally (lost password?)


Page:  1  2  3  4  5 

 
James Johnston Profile
Live feed
Blog
Friends
Miscellaneous info

EX93
Global user

Registered: 01-2006
Location: Glasgow
Posts: 435
Karma: 6 (+6/-0)
Reply | Quote
Re: Survey of marketing arrangements of dairy farmers


quote:

Jeremy Franks wrote:

James Jones Jones??? I take back the clever bit......
OK, first, not many people accuse me of being clever but having no common sense!

Second, you clearly feel there is nothing an individual dairy farmer can do to keep their FG price up, I disagree. Certainly collective action helps - if everybody is involved - but surely by now you can see that that ain't going to happen in UK milk.Never in dispute!??!

OPEC works because it holds supply below demand - as you say. So, how can UK I said Global not UKdairy farmers hold supply below demand. Two ways: (1) hold supply below UK I said Global not UKprocessing capacity so processors pay higher prices to keep their capacity in use. OK short term but limited medium term impact because its easy to close surplus capacity causing a second round effect, namely farmers must lower production once more. How low do you need to go to keep Supply below Demand?

(2)Milk demand is 7 billion liquid, 3 billion branded and the rest 3.5 sold onto world markets as commodities - butter, SMP, cheese. So, continue to reduce supply until 3.5 billion litres of production "vanishes" (less any that in the meantime can be converted into a branded product).

So, the question is, for your OPEC model to work Again I used OPEC as a GLOBAL example(leave aside its illegality for a moment!): which dairy farmers are among the 35-40% high cost or poor marketersHow many UK farmers will still be milking cows in 10 years if the average age of 58yrs is true? (or perhaps a combination of both) producers who will be "forced" out BECAUSE of the OPEC "solution".My OPEC "example" was just that, not a solution. If you JJ are, then you had better get out now before everybody sees the future and nobody will buy your cows+plant+farm or whatever.
I agree

I doubt the government cares about UK milk supply until it cannot get sufficint for its own tea and cheese and biscuits!

As for the role of the middle market - I take it your mean garage forecourts, inner-town expresses and corner shopsTry Aldi, Lidle Iceland and alike - they have always charged a higher price for milk than the SM - (MDC reports etc). What has changed is Tesco Fresh'n'Lo discount brand Who's??? Try again, Fresh n' Low isent a Tesco brand it's not new and it was dreamed up by the old Scottish board- treating milk as a commodity with no enhanced sales features (local, green, filtered, etc). This will certainly take overall SM prices down if it continues. And they are entiled to continue if processors are willing to supply them. If SM are selling at "below cost" then the OFT needs to be informed - but how will they or we know, they dont reveal their costs by product line.

From my perspective, I don't want to see the milk sector decimated nor do I, but it's happening, to what extent I cant quantify!??!(or more correctly decimated times 4), so I fall back on looking at ways individual farmers can help themselves.


Probably not by filling out on-line surveys IMHO

p.s. The red coulor is to highlight not to be agressive.

---
I dont want index, I dont want type, I want both!!!
15/9/2008, 16:42 Link to this post PM via Email   PM via Forum
 
FiringOnAllFour Profile
Live feed
Blog
Friends
Miscellaneous info

Ex97
Cyborg

Global user

Registered: 01-2004
Location: Northern Ireland
Posts: 2203
Karma: 43 (+43/-0)
Reply | Quote
Re: Survey of marketing arrangements of dairy farmers


Jeremy,

If you don't think that manufacturing is a feasible end use for milk, what do you suggest large exporters like the whole island of ireland, and holland etc should do?



15/9/2008, 19:49 Link to this post PM via Email   PM via Forum
 
foxleigh Profile
Live feed
Blog
Friends
Miscellaneous info

Ex97
True blue dinky-di maverick

Global user

Registered: 06-2003
Location: southern,oz
Posts: 2926
Karma: 33 (+33/-0)
Reply | Quote
Survey of marketing arrangements of dairy farmers


personally I dont care what they do with my milk so long as I get the highest possible price for it and a price that covers ALL my costs including lifestyle - we have shifted from a liquid milk processor to a milk broker because of guarenteed price.

milk processors could do well to remeber that an aging dairyfarmer population does not HAVE to milk cows most of us CHOOSE to and we all have other options avalible to us.
16/9/2008, 2:50 Link to this post PM via Email   PM via Forum
 
Jeremy Franks Profile
Live feed
Blog
Friends
Miscellaneous info

GP81
Global user

Registered: 09-2008
Location: Newcastle upon Tyne
Posts: 16
Karma: 0 (+0/-0)
Reply | Quote
Survey of marketing arrangements of dairy farmers


Several comments - quickly,
James Johnston (sorry!). Clearly I cannot envisage 14000 UK dairy farmers working together, so a globall movement (al al OPEC) never crossed my mind! About 1000 dairy farmers quit each year, upuntil recently their output was replaced by those remaining, but not for a year or so (hence the decrease in milk production). All business people can do something else - as the 1,000 a year clearly demonstrate. Its because 1,000 a year have gone, (and because of low recent profitability and because of high concentrate prices) that there has been no supply response to the recent higher milk prices - which means that those who remain in the industry have better chances of benefiting from the higher prices. Anyway, I challenged you (somewhere above) to say what your thought your three key decision making parameters were in chosing a milk buyer - what to put your neck on the line?

Firingonallfours: manufacturing can deliver a good income but it depends on branding and/or low cost production to earn a living on the global commodity markets. Holland have the brands and the co-operatives (at sizes that UK regulators have not allowed and they also have access to the entire EU land mass for milk supplies ets), Ireland have low production costs - grass not grain. Are our costs low enough to compete with Ireland and NZ on the global market - no, I dont think so. So, that's why I believe it is important to know what you milk is being used for- because it is only then that you can start to understand the processors business and their business decision, and then you can start to compare your milk price with either IMPE, AMPE or MFCV - whichever is the most relevant. Farmers can then track these markets and switch buyer to move into whichever market is likely to offer the best prices over the next 2 years. That is why I find the farmer retention funds so difficult to accept, they too strongly tie in farmers to a processor over which they have little business control, but into which they invest increasingly large sums of money (OK lets open this can of worms whilst we are at it). So, foxleigh: trade of certainty (guarantee) for uncertainty (variability) but that's no reason not to be interested in the end-use of your milk is it?
Most do now, like you, I've got work to do.

---
Dr Jeremy Franks, Newcastle University
16/9/2008, 8:33 Link to this post PM via Email   PM via Forum
 
Jeremy Franks Profile
Live feed
Blog
Friends
Miscellaneous info

GP81
Global user

Registered: 09-2008
Location: Newcastle upon Tyne
Posts: 16
Karma: 0 (+0/-0)
Reply | Quote
Re: Survey of marketing arrangements of dairy farmers


James Johnston
I've entered a response to some of your points. However, forgot to refer to Tesco's Fresh'n'Lo brand. It is Tesco's who have introduced this, and it is new to the market under current circumstances _I've no idea what the old Scottish Board did , that must be pre 1992 I guess, before my time (well, before I got into the academic game). I take this from Ian Potter Dairy Farmer ARticle, September 2008. He states " Tesco has cut prices from [sign in to see URL] pounds for 2 litres to "99 p for two litres of the Fresh'n'Lo brand". He then goes onto say "most of you reading this article will hate Tesco with a passion". If this is wrong, what's right?

---
Dr Jeremy Franks, Newcastle University
16/9/2008, 8:40 Link to this post PM via Email   PM via Forum
 
FiringOnAllFour Profile
Live feed
Blog
Friends
Miscellaneous info

Ex97
Cyborg

Global user

Registered: 01-2004
Location: Northern Ireland
Posts: 2203
Karma: 43 (+43/-0)
Reply | Quote
Re: Survey of marketing arrangements of dairy farmers


Ireland is not, in my opinion, a low cost producer. But for a small number of farms in the southern tip, most farms have all the buildings and equipment associated with high output production. Cows cannot be outwintered. I don't imagine anywhere is low cost in the old EU.

Branding strength such as arla or campina have will never be achieved here, due to lack of scale and the OFT.

So without brand strength or low cost, what do you suggest is the way forward?
17/9/2008, 9:47 Link to this post PM via Email   PM via Forum
 
Jeremy Franks Profile
Live feed
Blog
Friends
Miscellaneous info

GP81
Global user

Registered: 09-2008
Location: Newcastle upon Tyne
Posts: 16
Karma: 0 (+0/-0)
Reply | Quote
Re: Survey of marketing arrangements of dairy farmers


FiringOnAllFours (what a pity, I though it would be JJ responding).

Quick response (no magic bullet of course). Those farms I've seen in Ireland are low cost. By this I mean low variable cost because they "produce milk from grass". Because they are small they tend to incur larger fixed costs/litre I agree. However, I always associate milk from grass as low cost. I agree wrt the scale issue and farmer-owned branding - a big disadvantage to UK farmers. Also, the successful continental coops are the survivors, many went bust in the process taking farms along with them.

What to do? As in everything, it is important to get the most from everything that you have control over, and to expand the things you have control over. Benefits are not addative but multiplicative (a catch phrase recently trolled out to explain our success on the velodrome but which has been around for decades). The catch is, the more people involved the faster the benefits can multiply.

So, every dairy farmer needs to find what part of their business gives them an advantage over other dairy farmers, and exploit that. This will lead some to expand, others to specialise in production systems, others to diversify, others to quit. Also, if I was a diary farmers, I would try to initiate a local "club" of similar minded, like thinking dairy farmers and work together to improve performance, marketing etc. A club acts by providing benefits to its members, so all the benefits of this cooperation must remain the rights of the club members (no free-riders). IF this worked, it might lead to joint decisions regarding marketing - a group of 30 - 50 reasonably sized dairy farmers altering their marketing arrangements together may influence terms and conditions whereas each acting alone will not. I would then look towards securing contracts that allowed me to change buyers at short notice - here there is certainly a large degree of risk, but return is based on risk (or should be).

Now you can see the logic behind my questionnarie - is this reasonable? Do other dairy farmers follow the same model? If not, what model do they follow?

Anybody else what to put their neck on the line? Well, I hope everybody reading this does complete the on-line questionnaire (see first posting of this thread), it must be withdrawn in a couple of weeks.
(PS sorry for the length of this post, seems I do have a academic's problem with long-windedness)

---
Dr Jeremy Franks, Newcastle University
17/9/2008, 12:26 Link to this post PM via Email   PM via Forum
 
James Johnston Profile
Live feed
Blog
Friends
Miscellaneous info

EX93
Global user

Registered: 01-2006
Location: Glasgow
Posts: 435
Karma: 6 (+6/-0)
Reply | Quote
Re: Survey of marketing arrangements of dairy farmers


JJ too busy, it's not raining!!!

---
I dont want index, I dont want type, I want both!!!
17/9/2008, 13:40 Link to this post PM via Email   PM via Forum
 
foxleigh Profile
Live feed
Blog
Friends
Miscellaneous info

Ex97
True blue dinky-di maverick

Global user

Registered: 06-2003
Location: southern,oz
Posts: 2926
Karma: 33 (+33/-0)
Reply | Quote
Re: Survey of marketing arrangements of dairy farmers


quote:

Jeremy Franks wrote:

FiringOnAllFours (what a pity, I though it would be JJ responding).

Quick response (no magic bullet of course). Those farms I've seen in Ireland are low cost. By this I mean low variable cost because they "produce milk from grass". Because they are small they tend to incur larger fixed costs/litre I agree. However, I always associate milk from grass as low cost. I agree wrt the scale issue and farmer-owned branding - a big disadvantage to UK farmers. Also, the successful continental coops are the survivors, many went bust in the process taking farms along with them.

What to do? As in everything, it is important to get the most from everything that you have control over, and to expand the things you have control over. Benefits are not addative but multiplicative (a catch phrase recently trolled out to explain our success on the velodrome but which has been around for decades). The catch is, the more people involved the faster the benefits can multiply.

So, every dairy farmer needs to find what part of their business gives them an advantage over other dairy farmers, and exploit that. This will lead some to expand, others to specialise in production systems, others to diversify, others to quit. Also, if I was a diary farmers, I would try to initiate a local "club" of similar minded, like thinking dairy farmers and work together to improve performance, marketing etc. A club acts by providing benefits to its members, so all the benefits of this cooperation must remain the rights of the club members (no free-riders). IF this worked, it might lead to joint decisions regarding marketing - a group of 30 - 50 reasonably sized dairy farmers altering their marketing arrangements together may influence terms and conditions whereas each acting alone will not. I would then look towards securing contracts that allowed me to change buyers at short notice - here there is certainly a large degree of risk, but return is based on risk (or should be).

Now you can see the logic behind my questionnarie - is this reasonable? Do other dairy farmers follow the same model? If not, what model do they follow?

Anybody else what to put their neck on the line? Well, I hope everybody reading this does complete the on-line questionnaire (see first posting of this thread), it must be withdrawn in a couple of weeks.
(PS sorry for the length of this post, seems I do have a academic's problem with long-windedness)


1)grass can be more expensive to grow than many other [sign in to see URL] DM/ha is a better way to go
2) we have already formed our farmers group and lobbied for better milk prices and invited quotes for milk from outside the region and then voted with our feet and left our processor enmass.
3) when was the last time anybody asked a plastic blow moulder a) what went into his bottles and b)what that product was sold for? I bet he wouldnt care so long as he got paid what he wanted for his [sign in to see URL] I dont care who our broker sells our milk to so long as I get paid.

18/9/2008, 14:10 Link to this post PM via Email   PM via Forum
 
Jeremy Franks Profile
Live feed
Blog
Friends
Miscellaneous info

GP81
Global user

Registered: 09-2008
Location: Newcastle upon Tyne
Posts: 16
Karma: 0 (+0/-0)
Reply | Quote
posticon Re: Survey of marketing arrangements of dairy farmers


Fair enough. Did your local group action help or did it only add to your costs?

As for the plastic (bottle?) blow moulder: the only one I have seen working was in a ARLA dairy: they were rather concerned by what went into to and its impact on the quality of its product - but I guess you are right so long as it does its job lowest price is best.

I guess though that the machine could be used to mould different types of plastic bottles, and that some owners might be interested to sell bottles into a market that was undersupplied or one with a larger return to increase the profit margin for each unit sold. I guess if that were the case the owner might be inclined to study different end uses of his product - maybe (I rather fancy I would).

However, each to their own, and it sounds as if your approach suits you so that's key.


---
Dr Jeremy Franks, Newcastle University
18/9/2008, 14:30 Link to this post PM via Email   PM via Forum
 


Reply

Page:  1  2  3  4  5 





You are not logged in (login)
Back To Top

Disclaimer: Any views expressed on this site are not necessarily the views of the owner or any of the sponsors of Cowtalk..

Google
WWW COWTALK