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Thread: Thoughts on Cap Limits?!

  1. #1
    Join Date
    Nov 2017
    Location
    Thorp, WI
    Posts
    5

    Default Thoughts on Cap Limits?!

    Wondering what everyone's opinions are on dairy plants putting cap limits on the amount of milk each patron could send in?!

    I heard talk from a few farmers that they see that being the only way the dairy industry could straighten back out.

    Put a limit depending on how big your farm is and try to limit the giant expansions so us little guys can keep going too?!

    Just wondering thoughts and opinions!

  2. #2
    Join Date
    Apr 2011
    Location
    Central Valley California
    Posts
    437

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    You are kinda late. Co-ops here in CA put them in about 10 years ago. Maybe they work because now our state is way short of milk. Co-ops are battling each other for milk.

  3. #3

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    It will figure itself out with time. Just let the market do it's thing

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  4. #4

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    Quote Originally Posted by BLOOMFIELD View Post
    You are kinda late. Co-ops here in CA put them in about 10 years ago. Maybe they work because now our state is way short of milk. Co-ops are battling each other for milk.
    Way short of milk means good prices right?

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  5. #5
    Join Date
    Apr 2011
    Location
    Central Valley California
    Posts
    437

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    No unfortunately we are still tied to National and World prices. Getting a small amount of premiums. Hopefully those will go higher.

  6. #6

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    Quote Originally Posted by BLOOMFIELD View Post
    No unfortunately we are still tied to National and World prices. Getting a small amount of premiums. Hopefully those will go higher.
    So your co-ops are making good money then? Locals here get low prices because milk is getting dumped (so we are told). Therefore causing low prices. Since your co-ops are selling all theirs they should be making big bucks. Correct me if I'm missing something.

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  7. #7
    Join Date
    Apr 2011
    Location
    Central Valley California
    Posts
    437

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    I don't know about the other co-ops in CA but ours is making good money on fluid milk sales by charging the customer huge premiums to buy milk because of shortage. But we also sell powder which is almost worthless and butter and cheese are fair. So our co-op did make a profit in 2017 but not great.

  8. #8
    Join Date
    Feb 2013
    Posts
    1,310

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    Most coops are making good money regardless of supply. The processors are simply sick and tired of buying more processing ability to loose money, they know how much they can sell and what their margins are. The producers are the ones that can't figgure this out. All they see is expanding production into a full market.

    Who do you suppose will win this battle?

  9. #9
    Join Date
    Feb 2013
    Location
    Lynden Washington
    Posts
    277

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    Nut how they can lose $. Its called a MAKE ALLOWANCE. They are reg to make so much. I know its the basic version but still. Our coops all petition to raise the MA few years ago. "Oh but patronage stocks...." Ugh,,,, still lose $. Our coop is pretty good from what I gather at marketing but some times you shake your head.

    We have had a base/qouta system for years too. BUT....they just buy cheap milk from non-member dairies. So they will fine us for going over amt allowed (not yet this season) then buy milk from producer handler who has too much. I think they are supposed to cut them off 1st but recall hearing stories of that not happening last time we got fined for over base milk. If you quit you can sell your base. Cheap to free when there is no penalty but 1-2 cwt if there is one. If EVERY coop did it....may help. But would not private guys buy it then? Now our coop is buying Organic milk from UT an ID for our ID plant for C4 -$2. They were told to ramp up flows since org milk was taking off last year.....now they wont take it.

  10. #10

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    I talked to a farmer who's co-op owns it's own plants multiple plants in the Northeast. Their co-op puts the extra profits into buying more plants and improving them. And gives little premiums. Farmers can't pay bills but their bottling plants and cheese plants will be great. Not sure I have all the facts, and I may be missing something here but that doesn't sound fair.

    And there is no real over supply in the Northeast, it's just a world market price that causes the low milk prices. So I guess a base isn't a solution.

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