Farmer Writes: maybe Glanbia should revisit linking feed and milk prices

Grass growth has remained very strong on the farm through the second half of the year. We took another 100 bales off the milking platform last week and a few more off the youngstock block to keep quality under control.

The mower will be washed this week and hopefully put away until next year. Cover is building quickly on the farm already but hopefully we will get a good enough back end to graze through it all.

The calves are doing exceptionally well for the last few months and, with aftergrass in front of them for the foreseeable future, most of them should continue to thrive without any meal feeding for the rest of the grazing season.

We will probably pull out a small number next month for some special attention if they start to fall behind. We will leave weighing until housing, as most of them seem to be well up to target weight.

We had a great day out at the Iverk Show in Piltown, Co Kilkenny, last Saturday. We brought three cows out for the day and had a first in one class with a second and third in another class. It’s Ireland’s oldest agricultural show and our local summer show, so it was great to bring the cows out and support it. The cows could have done with a small bit more preparation and training but we got them into and out of the ring without any mishaps.

We didn’t make it out to any show last year, so it was good to get back out with the cows and maybe meet some potential customers to show what the herd and breed has to offer.

We got a good reaction with the stock so hopefully it will lead to a few sales and, as one man said, if you don’t bring them out occasionally, how will anybody know what you have?

We have been mulling over the latest offering from Glanbia fixed milk price schemes this week as well.

The offer of 29.33c/l excluding VAT (31c/l including VAT) for the next five years might be a good price, especially considering where Glanbia’s base milk price was 12 months ago.

The market is returning a few cent more than this offering though, which makes it a bit more difficult to sign up.

This scheme is all about stability, however, and about taking some of the recent milk price volatility out of the equation for milk suppliers. Rather than asking ourselves if the market will be ahead of the fixed price over five years, we should ask can we consistently make a profit at 31c/l including VAT over the next five years?

Co-op top-ups will be paid on top of this price, as well as bonuses for milk solids, so this should all be factored in.

The feed element of this deal is a bigger quandary. A €30/t rebate is not to be sneezed at, but linking a feed contract to the milk contract is a step too far for most suppliers.

Best practice when buying feed would always be to price around with different suppliers to get the best deal and the best quality for the money. If we sign up to buy 100% of our dairy feed from Glanbia, we lose the power to do this.

If Glanbia’s feed rebate is as strong as is claimed and is a genuine €30 rebate off a competitive feed price, then it should stand alone and shouldn’t need to be linked to the fixed milk price scheme to get a huge uptake.

Also, asking suppliers to commit 100% of our feed purchases for maybe 10% or 15% of our milk supply is very unbalanced. It’s all voluntary we’re told, with the caveat that if you don’t volunteer enough feed, you won’t get enough milk. Maybe Glanbia should listen to its supply base and revisit this area before sending out any contracts for signatures.