I have just been looking at the milk and quota prices and have come to the conclusion that farmers are getting paid to much for their milk, the quota price at the moment seems to be around 5ppl with a milk price of 18ppl this leaves you with 13ppl, when I was dairying in the U.K. we were getting around 23ppl and the leasing cost of quota was 12ppl leaving 11ppl, using this basic maths it would appear that farmers are 2ppl better off now than they were with the higher milk price, my calculations and the prices may not be 100% accurate but the dairy companies/supermarkets will see the same published prices as I do and will wonder why on the one hand farmers are protesting at their gates for a higher returns yet are prepared to pay inflated prices for quota.

i don't know who you are but i suggest you shut up. You reckon the price of quota is 5ppl?? My arse, more like 15ppl plus. "when i was dairying in the U.K.", i suggest you come back and see what it is really like.....

i think your spot on us arable farmers are just as bad of course complaining about prices etc but then go and lease ground for £90-£100 per acre but at least we dont have the brass neck to blockade flour mills etc ps the next contributor has got mixed up between the cost of leasing and purchaseing quoto i think

quote: "the quota price......" where i come from that means the cost to buy, not too lease. Stewart, you have been unclear on this point.

I suggest Stewart has done the right thing by getting out, don't you? Maybe you would be well advised to do the same, then wouldn't react so badly to an interesting and debatable point. To be fair, when WE were dairying in the UK, and under so much stress, I would have probably said the same kind of thing, but oh how different things look when you are on the outside. I know ít may seem a huge issue, but have you ever thought of an alternative? Why slog your guts out for nothing when you might actually be better off doing something else? (We are still farming, but not dairy, and not the UK) Sue PS anyone want to buy any quota from a couple of NPQHs??!!

Stewart you are quite right quota trading is the worst thing ever to hit british agriculture it encourages young entrants to bid silly prices in an attempt to get established, other farmers pay to much to sprwead there cost and it makes outsiders think that farming is grossly profitable to be able to pay these rates The only winners are those who are retiring and able to sell. The prblem is that we are all on a carousel going faster and faster and darent get off.

don't be a prat stewart of course the milk price is not too high any idiot knows that

Sue, dairying isn't only a means of making a living, but a way of life, as im sure you'll know. I know some guys that have quit dairying but kept relief milking cos they miss the cows! Of course the price isn't too high when you think of how much work we put in, and how much money the middle man takes off us. Stewart, how can 18ppl be too high when some men are needing 23ppl to produce the stuff?

I'm not in dairying, but beef and sheep. As I see it, milk quotas place a cost on the dairy industry. Each litre of milk HAS to have quota, and that has to be leased or owned. Creating a cost whether directly by leasing or indirectly by loan repayments or capital gobbled up in the purchase of quota. One of the biggest problems with the quota system, has been the trading. When quotas were first issued, each dairy farmer at the time was handed a very valuable piece of paper, and the value of that paper could not be lost or removed. Now we seem to have a situation where the people who were originally issued the quota in the beginning have retired, and are having a good "Pension" from the lease or sale of the quota. ie. 600,000 litres of quota leased at 2 ppl is £12,000 yearly pension. 5 ppl would make £ 30,000. Similarly anyone who has bought quota to expand, using borrowed money, is effectively servicing someones pension by having borrowed from the bank to pay someone a lump sum on retirement from dairying. I'm sure that the dairy industry would benefit from a complete recall of all quota, and redistribute it as per production in 2002, and put in clauses to prevent year on year leasing, say, that each producer must produce at least 70% of their quota, each year, and any sales have a 20% syphon for new entrants / expanding businesses. This would go some way to putting the quota in the hands of the producers, and keeping it there. Daniel.

bollucks

Just as well that we regular "protestors" do not know where you live, Stewart! Please look at the overall picture before putting digits on keyboard, brain into gear could also help. Seriously, though, quota is not the only issue here, is it? Think on. Regards Phoenix

Brown, “Some men need 23ppl to produce the stuff ” could this be because production costs are to high maybe if they didn’t pay 5ppl to lease quota they could make a profit at the present day price of 18ppl. The suggestion that I come back and see what it is really like doesn’t really warrant a reply, although I will say that I was last in the U.K in July this year and things didn’t look to bad to me!

Phoenix, If you do find out where I live and want to protest on my doorstep it will be a long drive so don’t plan on milking the following morning. There may be some justification for a higher milk price but it is very hard to get that point across when uneconomic prices appear to be paid for production costs be it quota or rent. If the milk price were to rise would the extra income just be passed on to the quota lessor or landlord theby negating any benefit? Regards, Stewart

Stewart - we know you farm in NZ now, but some of your comments about the UK dairy farming have me questioning the extent of your experience in the UK. "maybe if they didn’t pay 5ppl to lease quota" - as you should know we have no say over quota prices, for buying or leasing, the only certainty is that it's got to cover production at year end and it's 'got to be got sometime'. We'd all like to get quota at the cheapest price, just like we'd like to sell all our products at the highest. But milk isn't something that you can 'hold onto' until the price is right, hence (goblin) our need to stick our brass necks out - folk don't seem to want 2 month old liquid milk that we kept back until the price was right! As Phoenix says there's lots more to take into account - not least feed, dairy chemicals, fert'- all up in price, all wanting a share of your basic maths calculation of our 'profits'. Dairy farming in the UK, has got to the stage where it has to be a way of life, those paying for labour have higher production costs than those farming families that 'live the life 24/7' and those who work it strictly for the dairy profit, ie not supporting it with say arable/sheep or whatever, are getting out. If everyone 'got out of dairy farming' where would you get milk from? Is this an acceptable situation? This is why there's 'a fuss' being kicked up. What's the alternative? - Stewart exporting it UHT to you!

Wow Stewart, you have done it again! Why do I think you are being deliberately controversial? However I take your point which is that if farmers are prepared to pay 5pppl to lease quota to produce extra milk, surely it must be paying them to do so and I further take your point that the dairy trade must see that if farmers are rushing to make these payments then they must be making more than 5ppl profit or maybe they are just mad?[the farmers not the dairy trade of course] And to Mr. Brown. "Bollocks" is neither an appropriate or sensible remark in any serious discussion.

B......s are useful to have though, especially when right behind the main thrust of the discussion. Jack Caley

Some of us have to pay 5p per litre to safeguard ourselves from "inreased" losses. It may be that you say we should not have got ourselves into this position but if you are struggling as many are - any opportunity has to be taken to survive the "moment" and where you then hope things will turn out right. As farming has always been it does not always come out right. Surely that is a situation everyone should be capable of understanding. Stewart - I really can't believe this fact makes much difference to the outlook of the processors or the supermarkets. Their attitude is and has been from the day of the dissolution of Milk Marque, to pay us the minimum price they can possibly get away with. Clearly when we all went our separate ways we played into their hands and have suffered for it ever since. I do think the supermarkets are beginning to change but the intransigent attitude of the processors remains the crucial factor. The FFA have to be congratulated for their efforts on our behalf.

Sam,Your comments still lead me to question the amount paid for leased quota, I know there are other costs involved with milk production and I may be showing a lack of U.K. experience, but you have little control over feed and fert prices which you say have increased, there is an element of control on quota pricing as it is traded on an open market selling for what someone is prepared to pay (which appears to be 5ppl), if leased quota is uneconomic (at 5ppl I’m assuming it is) and feed prices are high why don’t you feed less supplementary feed which will reduce your yield and then you will not need to lease the quota? This may not appeal to the egos of the dairy farmer who will not be able to boast about his 10,000-litre herd down at the pub but at least he may turn a profit .

As my "nom de plume" may suggest, I am now retired from farming but I am following the current discussion with interest. If the figures of 5ppl to lease quota and 15pplto buy it are correct, then may suggest that dissatisfied producers sell their quota for 15p and lease it back for 5p and show a return of 33% for doing nothing?

Looks good on paper doesn't it, ...but what are you going to do next year? You've got to have quota to cover production so you'll have to buy more, at the market price (investment), or lease (and hope you can get what you want, at the right price!) The rules have also just been changed as Non Producer Quota Holders (NPQH -from whom you can lease quota), in most instances, have to sell their quota by the end of this year or loose it, so there'll not be the amount of leased quota about next yr - :. even higher leased prices?!

Stewart When quota was dished out, based on a historic set year, those who were in the process of increasing their production (more cows, not necessarily only higher yields/cow) were left short of permanent quota, ie needing to buying more and/or perennially leasing to cover production. 'Leased quota' is a cost which can be put against taxable profit, where as 'bought quota' is classed as 'good-will', to be set against profit/loss after tax. For what-ever reason, some dairy businesses need to lease quota every year, as a running cost. To cover all production with bought 'permanent' quota may not be viable. Leased quota is not just for covering those extra litres squeezed out of those 'poor high production cows by profit crazy, egotistical milk barrons' as you'd have it. The price it's leased at is part of the yearly guessing game of 'lowest price time?'. Hindsight is a wonderful thing!

There is actually a fairly logical reason for what appear to be looney quota prices. There are a significant number of dairy farmers who plan to quit who are hanging on for one more year in the hope of being eligible for subsidy planned in the mid term revue of the CAP. This will (might) be paid over the next five years based on quota held in the next quota year. This has messed up the market since farmers are willing to take a loss this year to gain more in the future. Ok it is not based on quota this year but you still have to be going next year to get the payment. Hence lease quota is scarce and milk production high. In fact I think they are wasteing there effort as they could sell the quota now for 18ppl+, whereas after the mid term revue kicks in I think it will be almost valueless at least for a while. So they will lose most of there gain. So ther you go just another way subsidies cock up markets!