Every week in marts I see deals being done over the price of cattle or sheep.
More than once I have pulled into a yard to see a farmer having what looks like a blazing row with a factory agent over the price of a pen of Angus cattle, only for it all to end with a handshake.
In this business, we – and me in particular – are all about doing deals, getting the best price for what we’re selling, or paying as little as possible for what we’re buying. Beef, sheep and pig farmers know this dance very well.
Our compatriots over on the dairy side of the industry, however, may be considerably less experienced in the cut and thrust of getting a deal done.
After all, I hear, those guys ship their milk off to their processors – and it’s always the same processor – without even finding out what they’re going to get paid for that milk for anything up to six weeks later.
I need to have a lie down every time I think about it.
Dairy men will tell you it’s all ok, as Irish farmers mainly supply co-ops not private entities, and they get a full set of the processors’ accounts every year (I definitely envy them on this).
But the fundamental problem still exists. Their expertise lies in producing the highest-quality milk, not in getting the best possible deal when it comes to selling that milk.
Usually, this doesn’t matter. However, dairy farmers are going to be faced with some very big decisions over the coming months where knowing what the best deal might be will be critical.
Those supplying Tipperary and Arrabawn will have a proposal put to them in the coming weeks on whether to merge the operations or whether to reject the deal and stay on their own.
‘Controls in place’
Down in Kilkenny, the huge number of members of Tirlán will have to decide if they want to give the board of the co-op the ability to sell €600m shares in Glanbia on little more than a promise that the board has “controls in place” for how they might spend the money.
Finally, there is the hardy perennial of a deal or joint venture where Kerry co-op farmers supplying Kerry Group would buy the processing assets back from Kerry Group.
Next month
I hear that another attempt to get that one over the line is due before the end of next month. Good luck trying to make sense of the numbers in that one.
Each of these deals will likely run to nine figures. And dairy farmers will have to make their decision based on little more than a bet on what the future might hold. Even for a dealer as experienced as me, this is a tall ask.
I’d rather be fighting two factory men over a pen of Charolais cattle any day.
SHARING OPTIONS: