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James Johnston Profile
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EX93

Registered: 01-2006
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Re: Survey of marketing arrangements of dairy farmers


quote:

Jeremy Franks wrote:

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 1.44 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?



Fresh n Low was the top selling branded milk in Scotland pre deregulation. Wiseman offered a ?,000,000 sum of money to buy it at one point. 2 liters in Tesco today of Fresh n Low is selling for £1.06. Fresh n Low, I think is a great "brand name" for adding value to SM.

As for s**t srirring quota broker's who are trying to find a way to make money from dairy farmers now quota is virtualy worthless??? I'm afraid they were a nessasery evil, I've never liked them, trusted them or wanted them, still dont!!! They are paracites, no more no less. Them comenting on dairy politics is akin to asking turkeys to vote for xmas emoticon

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I dont want index, I dont want type, I want both!!!
18/9/2008, 17:17 Link to this post PM via Email   PM via Forum
 
FiringOnAllFour Profile
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Ex97
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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.
)



Grass might be cheaper than most things, but grass is associated with low production per cow and low turnover. Low production per cow is associated with high fixed cost per litre. Therefore, on northern farms in particular, grass is only part of the diet varying from farm to farm, especially considering that it doesn't feature in the diet for six or seven months of the year, and perhaps only during the day in summer. The scale of the farms is a secondary problem to this.

In the south where they use grass more, May production exceeds december production by roughly eight times. This isn't very productive for factories, thus adding further cost.

Therefore, I believe grass is only cheap in a country which doesn't have to house the cows at all, has no buildings and little slurry facilities bar a dirty water tank.

Dairy farmers are good at dairy farming. Processors are paid to make the milk into something which will return as high a value as possible. That is their job.


18/9/2008, 19:49 Link to this post PM via Email   PM via Forum
 
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Ex97
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Re: Survey of marketing arrangements of dairy farmers


quote:

FiringOnAllFour wrote:

  Processors are paid to make the milk into something which will return as high a value as possible. That is their job.





Is it? I think most processing companies would see their job as being to buy their inputs (milk)as cheap as possible and then sell as much of their product at the best price they can (but not sacrificing turnover for the very highest price), thereby returning as large a profit as possible to their shareholders. Their job is to make money for their shareholders.



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18/9/2008, 20:35 Link to this post PM via Email   PM via Forum
 
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Ex97
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Re: Survey of marketing arrangements of dairy farmers


Yes, by making the milk into products which will make a wider margin for their shareholders, or a better milk price for their co-op owners. Didn't everybody make as much milk powder last year as their capacity and/or contract arrangements allowed them?

Therefore its their job to figure this out.

18/9/2008, 23:39 Link to this post PM via Email   PM via Forum
 
foxleigh Profile
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Ex97
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Re: Survey of marketing arrangements of dairy farmers


quote:

FiringOnAllFour wrote:

[quote

Therefore, I believe grass is only cheap in a country which doesn't have to house the cows at all, has no buildings and little slurry facilities bar a dirty water tank.








grass is only cheap if there is rainfall otherwise it is an expensive use of water which could be used to grow other things that yield higher
19/9/2008, 8:10 Link to this post PM via Email   PM via Forum
 
James Johnston Profile
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EX93

Registered: 01-2006
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Re: Survey of marketing arrangements of dairy farmers


quote:

foxleigh wrote:

quote:

FiringOnAllFour wrote:

[quote

Therefore, I believe grass is only cheap in a country which doesn't have to house the cows at all, has no buildings and little slurry facilities bar a dirty water tank.








grass is only cheap if there is rainfall otherwise it is an expensive use of water which could be used to grow other things that yield higher




No shortage of water here!!!
 :arrh :arrh :arrh

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I dont want index, I dont want type, I want both!!!
19/9/2008, 9:02 Link to this post PM via Email   PM via Forum
 
FiringOnAllFour Profile
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Ex97
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Re: Survey of marketing arrangements of dairy farmers


quote:

foxleigh wrote:

grass is only cheap if there is rainfall otherwise it is an expensive use of water which could be used to grow other things that yield higher



Agreed. We grow very high yields of grass here, but thats because we have a surplus of rain all through the year. There really is a fairly fine line between enough rain to produce high grass yields, but not so much as to make the grass wasted or unuseable through poor ground conditions.

19/9/2008, 9:26 Link to this post PM via Email   PM via Forum
 
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Survey of marketing arrangements of dairy farmers


 Jeremy- As a learned scholar in your opinion what is the reason that in 1994 the margin that the retailers had on liquid milk was 1.5ppl, now it is nearer 12-16ppl,and on cheese their margin is between 30-60%.
 I question why the consumer should pay more when the industy leaders have let the retailers increase their margin so much they should find some way of getting some of that margin back!!!!
 I know it will not be easy but they dont get payed big bucks for nothing!!!
24/9/2008, 21:04 Link to this post PM via Email   PM via Forum
 
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GP81

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Re: Survey of marketing arrangements of dairy farmers


re. increase in retail margin since 1994

I guess you have just read DairyCo's "Dairy Supply Chain Margins 2007" - on their web site. It states (p. 7): "some caution should be taken when comparing 2007 with 1997 as 1997 marked the end of a period characterised by historically low retail margins for liquid milk as retailers fought for market share".

In addition, 1994 marked much uncertainty - as Milk Marque's new contracts came into place and the exchange rate fell away (like today!): both of which gave farmers and processors more market power.

Another point. If you look at the evidence given by supermarket "bosses" at the House of Commons Sub-committee on the milk market (some years ago now, its on the web), in answer to a question about whether milk was a loss-leader in the early 1990s, they said no. But perhaps the fact that the question was asked suggested some reason to believe this may have been occuring at some point.

Whatever, its a difficult issue, as we cannot know retailers net margin per litre of milk (even if we can get some idea of thier gross margin) in today's markets let alone going back to 1994.

I re-read recently Mr Blair's 2001 statement about farming being held in an arm lock by the supermarkets (public meeting with farmers during the F&M crisis) - why did the farming lobby allow him to "forget" this remark?




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25/9/2008, 8:31 Link to this post PM via Email   PM via Forum
 
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Ex97
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Re: Survey of marketing arrangements of dairy farmers


quote:

Campbeltowncowboy wrote:
 what is the reason that in 1994 the margin that the retailers had on liquid milk was 1.5ppl, now it is nearer 12-16ppl,and on cheese their margin is between 30-60%.


 Surely, because they can. It is up to the retailers what they charge their customers for a product. The only way us primary producers can have any influence on that is by becoming retailers.

 
quote:

Campbeltowncowboy wrote:I question why the consumer should pay more when the industy leaders have let the retailers increase their margin so much they should find some way of getting some of that margin back!!!!



As my point above, how exactly are these "industry leaders" supposed to influence price in the shops? Price of the raw material to the dairies, maybe......

 
quote:

Campbeltowncowboy wrote:I know it will not be easy but they dont get payed big bucks for nothing!!!



You really do seem to have it in for your elected representatives. If you feel that you can do better, then why don't you campaign within your co-op for a place on the board?


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25/9/2008, 9:27 Link to this post PM via Email   PM via Forum
 


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