Janet wrote:
In article ,
lid says...

Janet wrote:
In article ,
lid says...

Janet wrote:
In article ,
lid says...

Bill Grey wrote:
"Ian B" wrote in message
...
Roger Tonkin wrote:
In article ,
says...

Why why WHY do the farmers ALWAYS bleat hard times time and
time again?

Have you ever seen a poor farmer?




There are plenty of them around here, where hill farming of
sheep is the only possibility. Also we know that dairy farmers
get less per lire for their milk than it takes to produce
(unless you run a super farm!).

Then why are they producing it? Something economically wrong
there, isn't there?

at

The thing is, nobody can "dictate" a price. I can say I'll only
pay £100 for a Ferrari, but I can't make Ferrari sell me one for
that price. Likewise if the supermarkets demand milk at a
cheaper price than it can be produced, they will get no milk,
because there won't be any producers at that
price.

Except that if Ferrari don't want to sell cheap, they can just
park the car they made and wait for the market to change. You
can't do that with a live herd of milkers, in the middle of a
breeding program. They still have to be fed, milked and managed,
all costing money. So, the buyer knows very well the farmer can't
afford to refuse to sell the product. So long as he has milkers
he must sell milk, even at aloss, until he either goes bust or
gets out of dairying. The problem with getting out of dairying,
is that he's probably still owes the bank for his dairy equipment
(that nobody else wants to buy, and can't be adapted to another
use). Recipe for bankruptcy.

In the past decade,the number of UK dairy farms has halved.

http://www.telegraph.co.uk/finance/n...sumer/2785449/
UK-dairy-farming-on-brink-of-collapse.html

"UK dairy farmers lose an average of 4.7p on every litre of milk
they produce, giving the average dairy farm an annual loss of
£37,600, new figures show.

The figures from First Milk, a farmer-owned dairy business that
supplies more than 1.8bn litres of milk a year, lay bare the
desperate plight of the UK dairy industry.

According to a report out today, the average price paid to a
farmer for a litre of milk over the year to March 31 2007 was
17.5p. However the cost of producing this milk was 22p. This 4.7p
loss multiplied by the 800,000 litres that the average farm
produces each year equates to £37,600.

Peter Humphreys, chief executive of First Milk, said that the
dairy industry was "on the brink of collapse".

When dairying in the UK is finished, don't imagine UK
supermarkets will still sell it at the lowest price in Europe.
They'll still be the ones setting the price of milk but it will be
the consumers over a barrel.

Janet.

And as I said, if government regulations are making our milk
uneconomic,

They aren't. We have the highest welfare and safety standards in
Europe ,


There's your problem right there, Janet.

Our supermarkets also set the retail price to UK consumers, which is
the cheapest in Europe. Historically, they set retail milk prices as
a competitive lossleader. But in the past decade, UK supermarkets
have doubled their profit margin on milk.

Hold on, one moment it's a loss-leader (negative profit), then they're
"doubling" their "profit margin".

If it's a loss-leader, doubling the profit margin would mean double the loss
to the supermarket. EIther they're making a loss or a profit. Which is it?

They have also, driven down
the price they pay to farmers, now UNDER the farmers production cost.

Like I said, you can't do that for any length of time. The farmers would all
simply go out of business; then, no milk. Somebody can afford to make milk
at this price. Who is it?

They could either, pay farmers a sustainable margin and take less
for themselves. Or, they could pay farmers a sustainable margin and
pass the extra cost to customers. It would still be cheaper than
doorstep deliveries.

Or, they can do what they're doing now, which is just get the milk as cheap
as they can, which is what every business does. Tries to get supplies at
cheapest cost, and sell the product at the highest margin. The latter- the
retial price- is held down by our (consumer) power.

The simple thing is, nobody can bargain a price down below costs, because
the producers then leave the market. Unless for some reason a producer is
doing this bizarre thing of selling below cost. If they really are doing
that- all of them- they may as well not produce the milk, and just send
Tesco a cheque every now and again. So, why are these farmers, we are led to
believe, giving money to Tesco for no reason? Is it just a fun hobby, rising
at the crack to milk the herd? Because if this really is the situation, it's
otherwise a total waste of time and effort.


Ian