So the text messages started coming in thick and fast on Thursday morning when word started getting around that the west Cork co-ops were pulling out of the annual KPMG/IFJ annual milk price review.
The next three lines summarise the tone and content of the farmers making contact with me.
“If you are continuously at the top of an annual exercise, why would you pull out of something that gives you great PR for two weeks?” “The co-op have to pay the Journal and KPMG thousands to make the annual table so of course the co-ops will pull out – they are run by farmers.”
“Why can’t west Cork and Glanbia trading bonuses be included?”
Where do I start?
So where do I start to answer these.
For those who don’t know, the west Cork co-ops - namely Lisavaird, Bandon, Barryroe and Drinagh - have decided to pull out of participating in the annual industry exercise that independently calculates what milk price the co-ops paid.
Every month, we do an exercise, as do others, calculating monthly milk price, but it’s not verified independently and is based on farmer and co-op information we collect.
Thirty-three years ago, the dairy farmers and co-ops backed a decision to establish this annual exercise, which was called the Craig Gardner milk price audit at the time.
The thinking was it would incorporate all the somatic cell count bonuses and penalties, the higher fat and proteins, etc, that are not recorded in monthly leagues, but paid out to farmers.
The idea was to factually, independently verify what money left a co-op and was paid out in milk price.
The accountants were hired and a definition agreed and set for fairness and transparency. They travel out to the co-ops, look at the books and tally the results.
They send the final results to the Irish Farmers Journal and they are published for everyone to see.
The Irish Farmers Journal doesn’t get paid and KPMG is paid by the co-ops to carry out the exercise, the same way as a farmer pays his/her accountant and that’s it.
More to it
I honestly believe farmer directors are not as short-sighted as pulling out of an exercise just because a trading bonus, acquired if you spend a certain level of money with the co-op, is isolated from base milk price – surely there must be more to the pull-out than this?
Beef farmers have little transparency on prices paid or company profits and now dairy farmers, who have it, want to throw it away.
We in the Irish Farmers Journal or the expert panel created to oversee the annual exercise have no problem per se with the ‘trading bonuses’.
However, it’s just that they are indirectly acquired as a result of another piece of farm business and they need to be isolated from the base price so that the farmer has full transparency about the make-up of the milk price. Nothing more or nothing less.
Data - trash in, trash out.
As another text message rattles in, as social media lights up, west Cork milk suppliers can’t understand it, neither can I, but what can suppliers do?
Picking up the phone would be a start. Let me know when you get an answer.