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Thread: No Calves. Milking for 1000 plus days

  1. #21
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    How can it make any sense to have 40-50K per cow tied up in the right to sell milk?!?

    I know your prices are better on average, but even if you made an extra $1000 per year profit that is still far too long to pay back the investment. Are banks charging lower interest on quota loans because of the perceived low risk?

  2. #22
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    Quote Originally Posted by cows250 View Post
    How can it make any sense to have 40-50K per cow tied up in the right to sell milk?!?

    I know your prices are better on average, but even if you made an extra $1000 per year profit that is still far too long to pay back the investment. Are banks charging lower interest on quota loans because of the perceived low risk?
    My loan has a 15 year term. Regular interest rates.

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  3. #23
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    I do think that the high price of quota is a testament to how effecient some of us can be. If we couldnt afford it it wouldnt be that high.

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  4. #24
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    Quote Originally Posted by cows250 View Post
    How can it make any sense to have 40-50K per cow tied up in the right to sell milk?!?
    Curious too, how it works.

    50k invested at 5% is $2500 a year. That's better pay than milking cows.

  5. #25
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    Managing production is difficult, but it's coming to the US weather we like it or not.

    It's pretty obvious most processors are currently scheming ways to use quota to pick their future producers.

    I have a feeling the US dairy industry is going to look very different than today when the dust settles.

  6. #26
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    Quote Originally Posted by whistle pig View Post
    Managing production is difficult, but it's coming to the US weather we like it or not.

    It's pretty obvious most processors are currently scheming ways to use quota to pick their future producers.

    I have a feeling the US dairy industry is going to look very different than today when the dust settles.
    While I agree that processors are definitely using the current market to weed out "undesirable" producers, I really don't think that a full blown supply management system will ever come to the US. Eventually, when world dairy prices spike, those processors are going to want producers to make more milk to bring the raw milk price back down. If they don't let their producers expand new processors are going to start up to take and process that milk. But those new processors aren't going to be courting 40-50 cow dairies...they are going to be looking for tankers full of milk.

    Even if we did try to set up supply management, where is all the milk we export going to go? How are we going to keep the WTO from going nuts when the US imposes stiff tariffs on all imported dairy products? Who is going to fund the program or inforce the rules? You could maybe get enough support to start supply management now, but the moment prices go up processors, producers, and consumers are all going to be trying to break the system. Just my opinion.

  7. #27
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    I can't make the math work myself. What is current Canadian pay price? And how is it measured? A Canadian dairymen friend had said it's an equivalent to $28/hundred weight a few months back but i didn't think to ask how he got that figure.

  8. #28
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    Quote Originally Posted by cpridge View Post
    I can't make the math work myself. What is current Canadian pay price? And how is it measured? A Canadian dairymen friend had said it's an equivalent to $28/hundred weight a few months back but i didn't think to ask how he got that figure.
    We get paid on components. The higher the components in the milk the more $/L Look at #4 on the picture. For Oct. I got paid $80.90 for 100 Liters.

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  9. #29
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    Each Class if milk 1-7 has a price. The volume of milk used in each class times the price for that class that money is put into a "pool" 85% of that pool is used to pay BF 10% for Pro. 5 % OS. If more volume gets used in higher priced classes we get more $$$. Likewise if more volume in lower priced classes less $$$ paid.

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  10. #30
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    Roughly $1.27 in hauling/cwt
    Roughly $0.90 in "fees"

    CAN$2.33/kg protein = ~$0.84/lb protein
    CAN$0.70/kg OS = ~$0.25/lb OS
    CAN$16.2/kg fat = ~$5.85/lb fat

    CAN$39000/kg quota = ~$1.93/lb fat/day in interest cost @5%
    = ~$6.75/cwt in interest cost/cwt (I think I did my math right; correct me if I am wrong)

    Hauling, fees, and other solids all are reasonably close to US prices, but wow, what a difference in fat and protein pay rates. Can you skim the milk and through just the cream back in the tank... There has got to be a way to get paid more than that for protein.

    Base CME price would be ~$24.6/cwt (with CCM getting paid better for better milk)

    Thanks for posting this! Is this a normal consistent pay price or does it move up and down some with world prices? With all the extra costs it really doesn't seem that much better than US prices if you need to buy quota. Clear win for gifted or payed for quota.

  11. #31
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    If my math is correct it's like $36 CAD and $28 USD using 80 a kg. That's very interesting. Without the entrance gift of partial quota a heavily financed start up would never cash flow. How stable is the pricing?

  12. #32
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    Quote Originally Posted by cows250 View Post
    Roughly $1.27 in hauling/cwt
    Roughly $0.90 in "fees"

    CAN$2.33/kg protein = ~$0.84/lb protein
    CAN$0.70/kg OS = ~$0.25/lb OS
    CAN$16.2/kg fat = ~$5.85/lb fat

    CAN$39000/kg quota = ~$1.93/lb fat/day in interest cost @5%
    = ~$6.75/cwt in interest cost/cwt (I think I did my math right; correct me if I am wrong)

    Hauling, fees, and other solids all are reasonably close to US prices, but wow, what a difference in fat and protein pay rates. Can you skim the milk and through just the cream back in the tank... There has got to be a way to get paid more than that for protein.

    Base CME price would be ~$24.6/cwt (with CCM getting paid better for better milk)

    Thanks for posting this! Is this a normal consistent pay price or does it move up and down some with world prices? With all the extra costs it really doesn't seem that much better than US prices if you need to buy quota. Clear win for gifted or payed for quota.
    It would move alittle. Approx. 30% of our volume is priced in Class 7 which is based on world price. This payment schedule is new as this is the month they took value away from protein and put it toward BF.

    Remember this in in BC. Each province does it slightly different.

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    Last edited by CanadianCowMan; 12-02-2017 at 02:45 PM.

  13. #33
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    A lot of quota must be paid for in BC though. Seems everytime I go up there the same dairymen are building a new facility.

  14. #34
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    Alot of multi generational farms with lots of equity combined with the new over stocking rules and recent quota increases has everyone scrambling to find enough barn space. Builders and equipment installers are booked for the next 18-24 months.

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  15. #35
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    Which explains why the brokers grab every fresh cow they can get their hands on down here! $22-2400 USD has been a nice boost of cash flow this year on my extra animals

  16. #36
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    Quote Originally Posted by cpridge View Post
    Which explains why the brokers grab every fresh cow they can get their hands on down here! $22-2400 USD has been a nice boost of cash flow this year on my extra animals
    Those cows are $3000+ put in your barn here

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  17. #37
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    Quote Originally Posted by CanadianCowMan View Post
    Those cows are $3000+ put in your barn here

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    Was offered 1800 for any 30dim to 60 dim fresh cow. 1st lac. Whats your price Mr B? Overstock rules?

  18. #38
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    Quote Originally Posted by Troydairy View Post
    Was offered 1800 for any 30dim to 60 dim fresh cow. 1st lac. Whats your price Mr B? Overstock rules?
    Is dont need any. We always had overstocking rules its just recently getting enforced by animal welfare audits. No more then 110% allowed

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  19. #39
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    Quote Originally Posted by CanadianCowMan View Post
    Is dont need any. We always had overstocking rules its just recently getting enforced by animal welfare audits. No more then 110% allowed

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    Sorry....I meant what have you heard guys paying for them there. Unbelievable weather few weeks...eh?

  20. #40
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    Quote Originally Posted by Troydairy View Post
    Was offered 1800 for any 30dim to 60 dim fresh cow. 1st lac. Whats your price Mr B? Overstock rules?
    $3000 would be the absolute floor for an animal like that in SK these days, if she is really good quality/vaccinated/etc, $3500-4000 is within reason

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