So some idiot thought it would be clever to take a cow, or cows, into a supermarket. Did nobody try to stop it? Where was security?
To be honest I have no sympathy with the actions these people are taking. Presumably they were happy to sign some kind of contract, then maybe their costs increased reducing margins. If they had decreased would they have offered the milk at a lower price?
I'm willing, as always, to be educated as to what is happening, but if it is free market forces, then that's just plain unfortunate. Happened before and will happen again.
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How do you stop a cow going into a supermarket?
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Many supermarkets will not have any security guards at all.
Many of these suppliers have to sign up to exclusive contracts that they will only supply one surpermarket. Once the supermarkets have all the farmers tied up between them they can lower the prices and there is nothing that the farmer can do. He cannot switch to another one as they also have the lower price. Of course, a cartel is illegal isn't it......
A bit like your employer telling you that they are cutting your salary and they will make sure that no one else out there will pay you any more for your services.
Its shocking what the supermarkets do but they have been doing this for years across all sorts of products. They screw suppliers to the hilt and that's before you then look at the deals where the supplier has to pay the supermarket for the privilege of supplying them.
Am sure that's where Tesco came a cropper with their financial results a year ago when they basically booked all these supplier payments in to make their annual accounts look good!
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>> How do you stop a cow going into a supermarket?
I was wondering how easy it was to get a cow to enter a supermarket. Cattle really don't fancy unknown dark or busy places. They aren't stupid, just innately cautious and conservative.
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>> How do you stop a cow going into a supermarket?
Put down a cattle grid at the entrance.
Leave her at home doing the cooking, ironing, washing, etc.
"Beef" up security.
Tell them to moooove on.
Leave them in the calf-eteria.
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Why do farmers/producers sign up to these restrictive contracts?
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>> Why do farmers/producers sign up to these restrictive contracts?
because the supermarkets have a monopoly, you do it their way or no way.
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In my ignorance I thought the farmers would sign a contract with their customer, ie the supermarket, and a price per litre would be agreed over a specified period of time. At which point a new contract would be agreed, or not.
And most supermarkets I go in , with the exception of Aldi and my local Coop, have security at the door, or very close to. I walk through fields of cows several times a week and they soon turn round when you wave your arms and shout COOOSH!
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>> >> Why do farmers/producers sign up to these restrictive contracts?
>>
>> because the supermarkets have a monopoly, you do it their way or no way.
>>
And if all the farmers said 'no way', the supermarkets would be stuffed.
Two can play at that game.
In the days when I was running my own business, a national company told me that they were moving from 30 day payment to 60 day payment. I told them that I would manage without their business.
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SQ 4 LB
>> In the days when I was running my own business, a national company told me
>> that they were moving from 30 day payment to 60 day payment. I told them
>> that I would manage without their business.
you wouldn't manage if all your customers said that.
Last edited by: VxFan on Mon 10 Aug 15 at 10:10
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>> you wouldn't manage if all your customers said that.
>>
>>
They wouldn't have managed if all their suppliers said that.
But, they didn't, neither did they try and nowadays I don't have to concern myself with such matters
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>> How do you stop a cow going into a supermarket?
>>
Make it go to an udder place.
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I suspect the current low price for cow juice is driven by the importation, or the threat of it, of subsidised milk, much of it UHT treated - look at the country of origin on many cartons of this: produced in the E.U. is a common thread - from certain countries across the English Channel.
God bless the C.A.P., says the French peasant farmer, getting a living out of a 10 acre patch of farmland, the result of decent sized farms being divided, for generations, among the whole family of inheritors, to the point of economic unviability, unless subsidised.
French farmers have lots of votes!
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>> I suspect the current low price for cow juice is driven by the importation, or
>> the threat of it, of subsidised milk, much of it UHT treated - look at
Can't believe it's much of a threat. UHT milk is foul stuff. Not overly popular in this country i don't think.
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>>produced in the E.U. is a common thread
Pretty common thread for products from the UK, also.
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>> to the point of economic unviability, unless subsidised.
A fact claimed by many UK farmers as well - that many farms in the UK are not viable without subsidy , whether that comes from the EU or the UK.
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Its going to rain here shortly. b***** EU's fault.
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>> A fact claimed by many UK farmers as well - that many farms in the
>> UK are not viable without subsidy , whether that comes from the EU or the
>> UK.
If that is so, then sooner or later, farmers - and any other business in a similar situation - have got to take the hard commercial decision to get out of that line of work.
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The Welsh farmers most recently visited Parliament demanding that the Government make exactly replacement subsidy arrangements in case we leave the EU.
I believe that UKIP supports that approach.
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>> The Welsh farmers most recently visited Parliament demanding that the Government make exactly replacement subsidy
>> arrangements in case we leave the EU.
>>
>> I believe that UKIP supports that approach.
>>
Yes - we believe that farming subsidies, properly applied, are necessary in certain cases. We think that it would be better if the UK could pay these directly without the funds being diluted by cycling through the EU bureaucracy.
Farmers are being frightened by the "YES" campaign's claiming that if we do leave the EU, subsidies will cease. I cannot this happening and UKIP policy is much as I have outlined above.
Oh - we also believe in protecting our native fishing industry
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>> Oh - we also believe in protecting our native fishing industry
>>
What with, the Royal Navy do not have the resourses. We do have a couple of white elephant aircraft carriers, a bit too big for chasing fishing boats even if they did have aircraft or enough people to crew them.
Last edited by: Old Navy on Mon 10 Aug 15 at 17:18
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>> Cobblers. We have three of these.
>>
>> en.m.wikipedia.org/wiki/River-class_patrol_vessel
>>
The Spanish fishermen must be quaking in their boots. We can't even keep Spanish boats out of Gibraltar's waters. We certainly could not sustain a Cod war level of conflict.
Last edited by: Old Navy on Mon 10 Aug 15 at 17:47
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Dunno what a 'mini-cannon' is but I am chuffed to see the very effective Oerlikon 20mm machine cannon still in service. It's 60 years old or more.
Definitely more, perhaps 80, older than I am.
Last edited by: Armel Coussine on Mon 10 Aug 15 at 17:52
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>> Oerlikon 20mm machine cannon
www.youtube.com/watch?v=v5_o6Hu0J90
like the comment :)
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A whole three, hardly enough for all manner of patrol tasks. We have one of the smallest coastal fleets in europe even with a with a huge coastline.
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>> A whole three, hardly enough for all manner of patrol tasks. We have one of
>> the smallest coastal fleets in europe even with a with a huge coastline.
>>
Offshore patrol is navy speak for not ocean going or combat capable.
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So how many vessels and how much should we be spending on fishery patrol vessels ON? Three purpose built vessels woulld seem a reasonable number for the size of the fishing industry.
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>> So how many vessels and how much should we be spending on fishery patrol vessels
>> ON? Three purpose built vessels woulld seem a reasonable number for the size of the
>> fishing industry.
>>
Three means one on task some of the time or in transit. The other two will be training, being maintained, or the crew will be on leave. Most fishery policing is done by government agencies using shore based aircraft.
Last edited by: Old Navy on Mon 10 Aug 15 at 18:43
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Most fishery policing
>> is done by government agencies using shore based aircraft.
>>
So job done then. Three vessels is quite enough.
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>> Offshore patrol is navy speak for not ocean going or combat capable.
>>
Yes i knew that.
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It's just market forces isn't it?
If milk prices were good, farmers would expand their dairy operations, pushing the price down until it wasn't. If enough of the least efficient farmers give up or go bust, then the supply diminishes and the price rises.
Add to that the fact that the market is to a degree international. If you ever wondered why anybody thought import tariffs were a good idea, then here is the explanation.
Production cannot be turned up and down like a tap. When prices rise, there is a lag before production increases and vice versa. Meanwhile cows have to be fed and milked, the milk has to be sold at whatever price is available or poured down the drain leaving the farmer even worse off.
This applies in many sectors of farming. See "hog cycle".
The problem is not new. Dairy producers once had the bright idea of establishing a producer-owned marketing and distribution company to take milk from farmers at an economic price and sell it on to dairies and processors. This was of course a producers' cartel and it was done away with in the 1990s when the milk market was deregulated. See "Milk Marketing Board"
Farming is a very long term business, and unfortunately to survive in the long term requires survival in the short term. A good reason for farmers to be as diverse as possible, but also to try and create a framework that does not ensure that small producers can never compete profitably for long, leading ultimately to domination of the market by a small number of large suppliers and/or the permanent substitution of and dependence on cheap imports.
Anybody who thinks everything can sensibly be left to the market has forgotten the bus wars too.
A dose of a Corbyn-led Labour Party might not be a bad idea. After we have left the EU of course:)
Last edited by: Manatee on Mon 10 Aug 15 at 11:54
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>>
>> A dose of a Corbyn-led Labour Party might not be a bad idea. After we
>> have left the EU of course:)
Yes I remember the days of the Milk Marketing Board. A socialist imperialism that made sure that farmers were uneconomic, the product was expensive and watered down, and kept the english cheese business in the doldrums forcing us all to eat second rate state cheddar.
State control, don't you just love it.
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You're not wrong Z. Complicated isn't it?
And in a globalised, or even Europeanised, market even a state run enterprise is subject to market forces. Too often state control just deferred consequences of inefficiency and ineffectiveness, resulting in one great claht-up eventually rather than smaller enterprises failing along the way. See British Leyland for example - a national embarrassment.
The MMB itself closed Hawes creamery in 1992, transferring production of Wensleydale to Lancashire! Happily this catastrophe was reversed by a management take-over.
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I drink very little milk. A small amount of milk in my coffee.Herbal or green tea without milk.
Milk is for baby cows not sure if it is that good for adults.The calcium argument but calcium you find in greens.
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>> Milk is for baby cows not sure if it is that good for adults.
It's a pretty good food for all humans Dutchie. I think it's the Maasai of Kenya, a warrior people, whose diet consists largely of milk and fresh blood tapped from the necks of cattle.
What's the problem supposed to be? I have it in my coffee and on cereal when I eat it. It hasn't infantilized me as far as I can see...
(Googoo!)
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I'm all for the free market and not subsidising particular industries.
Farming I think is different, because our green and pleasant land is managed by farmers. Imagine if we imported all our milk, meat cereal etc.
What would the countryside look like then?
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>> I'm all for the free market and not subsidising particular industries.
>>
>> Farming I think is different, because our green and pleasant land is managed by farmers.
>> Imagine if we imported all our milk, meat cereal etc.
>>
>> What would the countryside look like then?
cow pat free?
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>> cow pat free?
A plus point.
On the negative side, you would have to take a machete to go for a walk.
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>> Milk is for baby cows not sure if it is that good for adults.The calcium
>> argument but calcium you find in greens.
We Europeans can consume fresh milk quite happily. Not so our Asian cousins who tend to lack the enzyme needed for its digestion.
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Isn't some of the problem that the supermarkets use milk as a loss leader?
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>> Isn't some of the problem that the supermarkets use milk as a loss leader?
Except they are passing the loss on to the farmer.
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>> >> Isn't some of the problem that the supermarkets use milk as a loss leader?
>>
>> Except they are passing the loss on to the farmer.
>>
Exactly
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It's a cultural thing too. In China traditionally milk consumption was associated with the nomadic herdsman I.e the Mongols. Civilised people didn't drink meat or eat cheese. This viewprevails to this day although as the Chinese have become more "Westernised" milk consumption is rising.
K
A Chinese person once told me that many Chinese consider milk drinking rather disgusting. Rather like drinking spit!
Last edited by: CGNorwich on Mon 10 Aug 15 at 16:40
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>> Civilised people didn't drink meat or eat cheese. This view prevails to this day.
>>
Drink Meat. Was that Co-ops best mince then? :0)
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>> It's a cultural thing too. In China traditionally milk consumption was associated with the nomadic herdsman I.e the Mongols. Civilised people didn't drink meat or eat cheese. This viewprevails to this day although as the Chinese have become more "Westernised" milk consumption is rising.
>> A Chinese person once told me that many Chinese consider milk drinking rather disgusting. Rather
>> like drinking spit!
>>
They feed it in powered form to their kids in large quantities in the cities. Especially foreign powdered milk.
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I'm firmly on the side of the farmers on this issue, although I don't condone some of their actions. I don't see the problem in farm subsidies, afterall we subsidise other sectors of our economy either directly or via tax relief. A sensible balance has to be struck, I agree.
There's something amiss when one can go into one of the large supermarkets and buy a 4 pint plastic container of milk for 89p. We refuse to buy it, we always go for the locally produced organic option which is more than twice the price.
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>> They feed it in powered form to their kids in large quantities in the cities.
>> Especially foreign powdered milk.
Usually bulked up with other fatal chemicals and contents.
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>> fatal chemicals
Fatal? Er...
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>> >> fatal chemicals
>>
>> Fatal? Er...
Rang a bell:
en.wikipedia.org/wiki/2008_Chinese_milk_scandal
... adulterated with melamine.
China reported an estimated 300,000 victims in total.[1] Six infants died from kidney stones and other kidney damage with an estimated 54,000 babies being hospitalised
Last edited by: Focusless on Mon 10 Aug 15 at 21:01
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People I know who work at a local creamery tell me that they are working at full capacity sending UHT milk to China
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China's now the world's third biggest milk producer which is impressive considering that they can't digest the stuff.
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The global market for milk products has collapsed this year, prices are through the floor. The French farmers are just as upset as the UK ones, and dairy farmers down here in NZ are seeing their income collapse.
Apparently China has stockpiled huge quantities of milk powder and aren't buying any more.
Also, the international sanctions against Russia have apparently stifled a very lucrative export market for cheeses. The Russians used to buy foreign cheeses in huge quantity. With the Russian market off limits, producers are flooding other markets with milk and milk products...
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Bad news for the milk producers but good for the rest of us. Another deflationary factor. Inflation is not going to rise any time soon.
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>> China's now the world's third biggest milk producer which is impressive considering that they can't
>> digest the stuff.
or have any cows.
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>>or have any cows.
dairy.ahdb.org.uk/market-information/farming-data/cow-numbers/world-cow-numbers/#.VckhC8vH-70
About 5% of the world's dairy cows (and 15% of the people)
Last edited by: Lygonos on Mon 10 Aug 15 at 23:11
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Problem with cows is that you cannot mothball them. They're either alive and milking, or dead and not. And there's a two-year lead time between thinking about producing more milk and having the new cow come on line.
As I said, whilst I don't approve of subsidising industries, what we subsidise is the upkeep of our green and pleasant countryside. That is why farming is different.
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Is this the answer?
www.bbc.co.uk/news/uk-33857629
I for one would pay it. Not convinced the majority would though.
Same principle as paying more for free range eggs or other ethical decisions.
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So that I fully understand this. Bear with me.
Morrisons were charging 89p for 4 pints of milk. They pay the farmer something for this already and that's for the 4 pints 2.272 litres. They say they will pay the farmers 10p/litre so that's 22.72p or the 23p for four pints.
But they were already paying the farmer for the milk... so who gets some of the extra money? If the farmers are to get 23p/4 pints and the price went up 23p... Then something don't add up.
Last edited by: rtj70 on Tue 11 Aug 15 at 20:42
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Cant see this going anywhere.
Morrisons who have been screwing the farmers come out of this looking like the good guys, but expecting us to pick up the cost.
Reality is Morrisons customers are price sensitive (why else would you shop there) so it wont sell, and then they say they tried, and the consumer wasn't interested - not our fault.
I'll carry on buying my 4pts at Waitrose for a quid knowing they are paying 32.08p a litre - over 9p more than Morrisons
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From this I think I am right in thinking Tesco also pay more (maybe not as much as Waitrose but more convenient for us).
The bit that I don't get is Morrisons seemingly raising price by 23p/4 pint.... but paying the farmers only 10p/litre. So Morrisons are benefitting here??
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Dutch farmers receive about 28 cents for a Litre of full milk.Can't be right can it ten pence a litre for milk to the farmer?
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>> From this I think I am right in thinking Tesco also pay more (maybe not
>> as much as Waitrose but more convenient for us).
>>
>> The bit that I don't get is Morrisons seemingly raising price by 23p/4 pint.... but
>> paying the farmers only 10p/litre. So Morrisons are benefitting here??
No, they buy per litre, but sell in 4pts which is approx 2.3 ltrs. They are proposing that if you pay 10p per litre extra they will pass this onto the farmer in addition to the 23 ish p they already pay.
It means that they will pay the farmer around 33p a litre by getting you to pay more. I'm guessing it will take the price over the £1 mark, so for me I'll just stick with Waitrose who are already paying around this much to the farmers without using it as an opportunity to up sell customers
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>> Reality is Morrisons customers are price sensitive (why else would you shop there) so it
>> wont sell, and then they say they tried, and the consumer wasn't interested - not
>> our fault.
well actually, we have a new Morrisons open in Weybridge. Its every bit as good as Waitrose
and cheaper. And it even has a classy cafe (not your usual morrisons transport cafe format)
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>> well actually, we have a new Morrisons open in Weybridge. Its every bit as good
>> as Waitrose
>> and cheaper. And it even has a classy cafe (not your usual morrisons transport cafe
>> format)
>>
Good for them if they have upped their game - they needed to.
How does the own brand offering compare with the other mainstream supermarkets - never really been impressed with Morrisons - perhaps I should give it a try again
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>>Morrisons who have been screwing the farmers come out of this looking like the good guys, but expecting us to pick up the cost.
Without doubt "spinning" the situation, but if costs go up, for whatever reason, who do you think will *always* pay the cost?
And anybody remember what happened to milkman, butchers, fishmongers, greengrocers etc. etc. just because supermarkets were cheaper?
And now the consumer has got all weepy over it?
There is no way that subsidies should be offered in the normal scheme of things. Things should happen because there is a value attached or there is not.
The exception is where you want something to exist, even where there is not an economic business case.
Rural bus services and a milk industry are probably two of those cases. Thus, since we want them, it is appropriate that we should subsidise them.
However, then let us not pretend that we don't, and let the farmers not get too uppity about their position. And let us not sneer at the french for subsidising their farmers.
The mechanics of subsidy are complex and difficult, but the principle is simple; are you prepared to pay more for something than the product is actually worth, simply so that it will exist?
I am. I use the village shop, the local milkman, the village petrol station, the independent mechanic and the butcher. All of which cost me more, but all of which I want to exist.
Perhaps worth bearing in mind the next time the conversation turns to which petrol station is 0.1p cheaper, for example.
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Yes.
I don't always live up to my principles though. Spirit willing, flesh weak, knowImean?
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Isn't it 'narmean' where you used to live, AC? The late lamented Alan Coren thought so.
For what it's worth, UHT milk in mainland Europe is very different than the dreadful stuff you get in the UK.
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Nah. 'KnowImean?' is London Trinidadian usage, Trinidadians having an articulate, educated dialect. I just happen to know some quite well.
Alan Coren's 'narmean' is a not too bad approximation of 'yuh kna'a'mean?' often heard in black London hooligan circles. The ungrammatical, cockney-sounding 'innit' or 'ennit' is more characteristically London Jamaican to my allegedly defective ear.
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My ole brother used to say narmean. Funny thing is though, when I moved to Hastings in '87 to start up a mobile car tuning business, he said I should start pronouncing mundy, tuesdy wensdy, as Mon-day, Tues-day etc. being as I'd moved away from sowf lunden.
What a joke though! - many of the arrears of said Sussex town were ruffer than where I came from.
He meant well though of course, he was 16 years older than I, and he lived in Maid-stone :o)
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Just an observation - my "village mechanic" hourly cost ph is about 40% the cost of a main dealer. And he doesn't apparently squeeze me for everything, like the cost of fault diagnosis. Local Kia dealer wanted £105 just to tell me what was making the knocking noise on daughter's Cee'd.
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>>my "village mechanic" hourly cost ph is about 40% the cost of a main dealer. And he doesn't >>apparently squeeze me for everything, like the cost of fault diagnosis
It does not matter what industry you are in - it comes back to covering fixed costs, variable costs and how much profit you want to make.
My local Indie owns his premises, has spent zero on the premises other than essential repairs to roof, electrics & new ramps in the 20 years I have gone there. He charges £40/hr+VAT. Contrast a "glass palace" rent & rates & other fixed costs - they probably need to charge £60/hour per mechanic to cover fixed overheads - not to mention receptionists & the free coffee!
Local dentist spent £3m on flash new building & kitting it out. Another dentist I know of had his premises bought & paid for some 30 years ago. £3m recent spend the NHS fees are fixed and he will find making a handsome income tough. The "old guy" can relax, fewer outgoings (other than salaries) he will probably be making north of £250K, maybe £400K, with 6/7 salaried dentists he employs plus his own fee earnings..
Last edited by: Falkirk Bairn on Wed 12 Aug 15 at 09:44
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>>I am. I use the village shop, the local milkman, the village petrol station, the independent
>>mechanic and the butcher. All of which cost me more, but all of which I want to exist.
I am trying to imagine a corner of South America where the beer is warm and the Post Office has a thatched roof.
Staying in deepest rural Cornwall last week, I deliberately filled up at the village petrol station; 1p more per litre than Tesco(?) in Penzance.
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I think you are confusing two different things.
I am happy to pay more for a packet of biscuits in my local shop because it is convenient to me to have such a such shop and the extra cost involve is outweighed by the inconvenience of driving to Sainsburys and wandering around a huge supermarket.
I am not happy that my taxes are used to subsidise milk producers or corner shops for that matter. If people don't want thier product at the market price then they do not have a future.
Incidentally why are all thes protests directed at supermarkets. Most milk produced in this country is sold to manufacturers for cheese, yogurt production, etc. Fresh milk represents a fairly small proportion of the the industry.
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>>Most milk produced in this country is sold to manufacturers for cheese, yogurt production,
>>etc.
Almost half of the milk produced on farms in the UK is processed into liquid milk. After liquid milk, the key dairy products are cheese, cream and butter. (source: Dairy UK)
Perhaps you are confusing two different things, because within the supply chain only 1% goes directly to consumers, the remainder goes via dairy processors who then sell to retailers.
The following has some interesting points, although note the editorial point at the end.
afnewsagency.org/dairy-crisis-not-about-supermarkets/
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The job of supermarkets is to buy at best value and make as much money as they can by providing customers with the best value and the best experience.
There is also integrity and social responsibility. Large firms in particular do hold very strong buyer power and should not abuse it. That does not mean paying more than the market price; it means being fair, paying suppliers on time, and when their business depends on a large contract giving them proper opportunity to negotiate.
Ultimately, when supply exceeds demand, price will go down - until either the supply shrinks (cows need milking, so that doesn't happen instantly) or offtake increases - through higher consumption, new markets opening up at the lower price, or whatever.
You interfere with that mechanism at your peril.
Supposing you set a minimum price that must be paid, the obvious one being some estimate of the cost of production (which will in any case vary between producers). Some strange things happen.
- Selling prices increase. Consumption goes down.
- production does not go down initially because the price is firm; however
- suppliers would still go out of business because some would not have a market for their milk;
- in order to achieve the objective of keeping dairy farmers going, somebody has to buy the milk. The EU tried this a long time ago and ended up with rather a lot of wine, butter, milk...
- Suppliers to the milk producers are able to raise their prices. The cost of production goes up. The minimum price has to rise.
et.etc., and every time the balloon is squeezed in one place it bulges out inconveniently somewhere else. The consumer/taxpayer ends up paying more for the food he consumes, plus
further imposts to pay for the surplus that is in the lake, on the mountain, or just down the drain.
The EU now seems to prefer direct farm payments, which also have unintended consequences - they enable producers to sell cheaper, so we get cheaper milk but higher taxes. That is essentially the current situation; but of course it does not work because the payments ultimately send the price down below the marginal cost of production (which explains how farmers apparently do stay in business with a production price of 32p and a selling price of 24p a litre).
We probably should be prepared to pay farmers to look after the countryside. The difficult part is what to link those payments to. Maybe we should give them taxpayer funded grants for machinery etc to improve their efficiency? At least we should get a return on it in the form of cheaper food, and the farmers would be better placed to compete with imports, or even export their own food. But I'm pretty sure we can't do that while we are in the EU, and even if we weren't, export subsidies would likely result in protectionist barriers.
The Morrisons idea is quite a good one. It is a form of added value for the consumer who wishes to feel charitable. It doesn't undermine competition and in a small way it decommoditises the milk in the "farmer's aid" bottles.
Incidentally, I was at a cheese tasting last night. The number of small farm producers has been rising steadily as dairy farmers chase the added value that the processors would otherwise capture. This de-industrialisation isn't "efficient" and won't give us cheaper cheese, but it is still a good thing.
Last edited by: Manatee on Wed 12 Aug 15 at 11:20
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Manatee>The Morrisons idea is quite a good one.
No, as it is the supermarket abrogating responsibility from treating its suppliers fairly.
As you also write:
>>The job of supermarkets is to buy at best value and make as much money as they can by
>>providing customers with the best value and the best experience.
>>There is also integrity and social responsibility.
Tescos have learned to their (and everybody else's) disadvantage that when your corporate culture is to behave as though you are beyond reasonable behaviour then you push at the boundaries of the law and end up with accounting disasters with the consequent impact on your share price.
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>> Tescos have learned to their (and everybody else's) disadvantage that when your corporate culture is
>> to behave as though you are beyond reasonable behaviour then you push at the boundaries
>> of the law and end up with accounting disasters with the consequent impact on your
>> share price.
>
And the consumer suddenly finds out that were being ripped off all the time, this time by a corporation acting fraudulently, so they stay away in droves.
(droves- see what i did there - chuckle)
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>> Manatee>The Morrisons idea is quite a good one.
>>
>> No, as it is the supermarket abrogating responsibility from treating its suppliers fairly.
When does it become unfair to pay suppliers the market price?
Paying more is a judgment that the buyer must make in light of all factors - continuity of supply, the publicity surrounding the hardship supposedly created by falling prices, etc. etc.. It is not "unfair" per se.
The supermarkets are essentially being blackmailed into overpaying for milk. Morrisons' wheeze gives the option to the consumer.
Milk is a commodity, more or less. This is always going to happen cyclically as you yourself have pointed out.
No doubt there is some hardship. But as ever we are hearing a very small part of the story. Farming is so unattractive now that the price of agricultural land has doubled in 10 years! What is going on?
www.savills.co.uk/farmland-value/index.html
What is going on by the way is that there is a torrent of public money going to already wealthy farm owners. If it isn't being properly directed then it is because the CAP schemes (farm single payment scheme and its successor the basic payment scheme) is badly defined/doesn't work. It is not for want of charity to farmers.
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In support of Manatee's post, a partial article from the current Private Eye
"Arguments continue in Scotland over how to introduce a fair basic payment scheme, as part of reform to the EU common agricultural policy, that will pay ‘occupiers’ of farmland £600m a year until at least 2020 whether or not they produce any food. But can a fair system be created from such a ludicrous policy? … Slipper farming was identified in Scotland as a phenomenon a decade ago when the 2005 CAP reform removed livestock headage payments but carried on paying farmers the same ‘historic’ amount of subsidy. Some farmers, rather than continue the hard work of tending livestock, sold most or even all of their sheep and cattle and simply pocketed the annual handout…â€
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>> Tescos have learned to their (and everybody else's) disadvantage that when your corporate culture is
>> to behave as though you are beyond reasonable behaviour then you push at the boundaries
>> of the law and end up with accounting disasters with the consequent impact on your
>> share price.
Tesco's accountancy problem has nothing to do with milk prices. Like many retailers and not just food ones, they extracted "promotional support", "pay to play" payments from their suppliers. What more than one retailer has also done from time to time was to make assumptions about what those amounts would be and booked them, declaring profit that they hadn't made. Tesco just got caught, and as a result some retailers' audits will have been made more rigorous!
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Sorry to bring the discussion down with facts, but it is worth considering how much of the following is down to the supermarkets, and how much its actually got worse or has it improved?
1995 45% of household milk was delivered
2013 3.2% of household milk was delivered
1995 Doorstep milk 37.9p, Supermarket milk 23.9p
2013 Doorstep milk 81p - £1.00, Supermarket 29p
Wholesale milk price rose by 0.3% and Retail milk price increased by 0.4% in 2014. Doorstep milk price increased by 9.5%
Farm-gate prices (what the farmer gets)
1991 20p
1996 25p
2001 17p
2008 25p
2014 34p
(Jan 2015 around 29p)
For 2012 - 2013 farm-gate prices increased by 13% due to increased competition between buyers.
Only 1% of milk imported in 2013, although that has risen since 2009. Milk and cream remain a net exporter. Cheese is easily a net import and and butter is also net import although less so.
No. 1 reason for a dairy farm to close, no succession available. (no interested children).
In the last 20 years UK milk production has reduced by 6%. In that time France's has reduced by 7%
Average UK Herd size has increased from 95 to 123 over the last 10 years with the largest in Scotland at 153
The number of separate dairy farms has decreased in the UK from 31,753 in 1998 to 14,159 fairly uniformly across the home nations.
The number of dairy cows has decreased from 3.2million in 1980 to 1.8million in 2013
Milk yield per cow has increased 14% in the 10 years to 2013.
Pasture land prices have increase from £4,000 per acre to £6,850 over the last 5 years to 2013. Rental prices have increase from £120 per acre in 2008 to £150 per acre in 2013
The UK has had the 5th lowest decrease in dairy producers in the last 2 years. France was 11. Bulgaria for example was the worst at -22%
The UK has 8% of the EU-28 dairy cow population
The top 25% of dairy farms increased their margins in 2014. The difference in profitability between the highest and lowest performer revolves around the cost paid for feed, labour and machinery. In addition financial management such as depreciation was a significant differentiator
UK Dairy farms when compared to the average for Western Europe have;
- larger herds
- lower per cow yield
- lower production costs
- higher profitability
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Some clarification on the Morrisons wheeze in the trade press. Not original apparently as Booth's has been doing something similar for a while.
Quote from Morrisons -
“We want to offer practical help by launching a range of four-pint milk at a retail premium of 10p per litre, all of which will be passed back directly to dairy farmers. We will stock this product in all our stores, offering our customers the choice to support dairy farmers directly.â€
They also say that they are in a three year contract with Arla that varies the price they pay with farmgate prices plus adjustment for diesel and plastic costs. Nevertheless they have said any further reduction in farmgate price will not be taken by them and they have asked that it be given to the producer.
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Milk protests - Bobby
