cwt herd buyout-May 1st deadline

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GMN

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For any of you that ship to DFA and are interested, there is a upcoming deadline for May 1st, but they have changed the rules some. They say of course per head values of cattle will be less, but now they will only pay 90% right away, and then after 12 months when they have proof that you did not get back into milking, the remaining 10% will be paid.

Plus the bred heifer option is only paying $700 per head. Who in their right mind would ever sell a bred heifer for that?

I think these programs are good for people who want to retire, and totally quit, but I'm just not sure about them for other situations.

GMN
 

bigbull338

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just another way for DFA to us your money for free.if i was milking an i sold out under the deal.they could keep the 10%.because most likely would be back to milking a month later or sooner.
 
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GMN

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bigbull338":1tbh81cv said:
just another way for DFA to us your money for free.if i was milking an i sold out under the deal.they could keep the 10%.because most likely would be back to milking a month later or sooner.

You really are a diehard aren't you? Any helpful tips for helping out in these lean and mean times?

GMN
 

bigbull338

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with the high feed prices you keep the barn clean of prob cows.by that i mean cull any chronic mastitis cows.an any 3 teaters that arnt milking good.as well as any cows that wont breed back.an any cows thats 6 to 7 months bred dry emm up.
 

dun

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bigbull338":1erhohs3 said:
just another way for DFA to us your money for free.if i was milking an i sold out under the deal.they could keep the 10%.because most likely would be back to milking a month later or sooner.

Took the neigbors 3 months to get back into milking. If they would have had the 90/10 deal when they did the cwt they wouldn;t have sold out in the first place. That 3 months did give them enough time to get all of their new fencing done and the parlor refurbed
 

novaman

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I may be overly optimistic but it seems to me that there is light at the end of the tunnel. I think we are working our way out of this price slump and break-even won't be that far down the road. For that reason, I believe this buyout will be a flop. I'd be surprised if many people would quit now after holding out this long.
 

regolith

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That 3 months did give them enough time to get all of their new fencing done and the parlor refurbed

That's the great thing about seasonal dairying. You give yourself 2 - 3 months off milking. Every year.
It took me about four years to get used to it though.

novaman, I think you're right. This side of the water, the best indication I've read so far is that milk prices will remain static for at least another year (only a month ago they were expected to drop further). I'm expanding my herd, and at this stage it looks scary but possible. At least there won't be a huge tax bill next year...
 
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GMN

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novaman":1g4b5fkh said:
I may be overly optimistic but it seems to me that there is light at the end of the tunnel. I think we are working our way out of this price slump and break-even won't be that far down the road. For that reason, I believe this buyout will be a flop. I'd be surprised if many people would quit now after holding out this long.

I've seen the futures for milk prices, and they are going to go up, but not to the extent that they were last year. With spring here, and the grass coming on, I am hopeful that the milk production will increase, and the super tough times will lessen.

GMN
 

TexasBred

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regolith":3ph7rm44 said:
That 3 months did give them enough time to get all of their new fencing done and the parlor refurbed

That's the great thing about seasonal dairying. You give yourself 2 - 3 months off milking. Every year.
It took me about four years to get used to it though.

novaman, I think you're right. This side of the water, the best indication I've read so far is that milk prices will remain static for at least another year (only a month ago they were expected to drop further). I'm expanding my herd, and at this stage it looks scary but possible. At least there won't be a huge tax bill next year...

That's part of the problem.... Prices start up and people expand and flood the market with milk, creating another milk surplus and down go your prices again. I'd rather folks hold their cattle numbers but improve their genetics, feed quality and work hard for bonus' paid for higher quality milk.
 
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GMN

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TexasBred":rc7rbwom said:
regolith":rc7rbwom said:
That 3 months did give them enough time to get all of their new fencing done and the parlor refurbed

That's the great thing about seasonal dairying. You give yourself 2 - 3 months off milking. Every year.
It took me about four years to get used to it though.

novaman, I think you're right. This side of the water, the best indication I've read so far is that milk prices will remain static for at least another year (only a month ago they were expected to drop further). I'm expanding my herd, and at this stage it looks scary but possible. At least there won't be a huge tax bill next year...

That's part of the problem.... Prices start up and people expand and flood the market with milk, creating another milk surplus and down go your prices again. I'd rather folks hold their cattle numbers but improve their genetics, feed quality and work hard for bonus' paid for higher quality milk.

That may be true, but people expand to make more money, not always because they want to, but because they have to. Something to keep in mind, everyone has bills to pay.
 

TexasBred

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More cows may give you more milk and more cash flow but expenses go up proportionatly. If you're losing money on 150 you'll lose money on 300 (twice as much) without other changes. Improving the productivity of the existing herd of breeding "up" will give you the increased milk and/or components while not necessarily increasing other expenses. Expenses are the only thing we can control as we have no input on determining the price of milk. In short I'd rather have 100 cows milking an 80 pound tank average than have 135 milking a 55 lb. average.
 

regolith

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More cows may give you more milk and more cash flow but expenses go up proportionatly. If you're losing money on 150 you'll lose money on 300 (twice as much) without other changes.

The budgets suggest that the actual income, with other expenses accounted for (extra help through calving and the like) will come to about the same. The key for me is that the herd is my asset - as a sharemilker, I don't own land. So if I'm in a position to increase numbers and the bottom line stays around the same, I'll be in a better position to sell some cows and buy land a few years down the line.
The new farm I'll be taking the herd to is almost exactly twice the size of the one I'm on now.
At the end of the day, the only way NZ as a country can increase its production is by breeding more efficient cows, converting more land to dairying or buying in feed from overseas. Right now Fonterra - like many other dairy companies world-wide - is stock-piling dairy products they don't have a market for. Things won't come back to natural trading until thsoe stockpiles have gone.

TB - I'm already probably in the top 10% for milk quality :D (SCC/bateriology/fat and protein components)

I've been trying to figure out the conversion. $NZ700 would get you a poorer bred-heifer out here, not a top-quality one. The range right now for rising two-year heifers is $NZ700 - 1200, same as it's been for the last few years. NZ is around 57 cents against the US dollar - so $US700 is $NZ1225.
That's about what you'd pay if you wanted the best heifers available.
 

dun

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$NZ 700 = $US 406.291
$NZ 1200 - $US 695.50
That's todays conversion anyway
 

hillsdown

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TexasBred":3kx3cah7 said:
That's part of the problem.... Prices start up and people expand and flood the market with milk, creating another milk surplus and down go your prices again. I'd rather folks hold their cattle numbers but improve their genetics, feed quality and work hard for bonus' paid for higher quality milk.


We had a huge problem here a few years ago. When BSE hit us our dairy heifers went down A LITTLE in price. What was normally a $3000 heifer went to about $2000. Many US dairy farmers took advantage of this price and bought huge amounts of young heifers hoping that the border would not be closed for long..that did not happen and even when the border opened up again it was not to breeding stock..So the US guys thought they could buy quota and put up a milking barn and just milk the heifers here in Canada..WRONG quota is not that easy to acquire so the only option they had left was to sell these now springing heifers which flooded the market. You almost couldn't give away dairy cattle after that. A top quality deep pedigreed heifer out of a life time production award cow that should have sold for thousands were selling for around the thousand dollar mark or less..A lot of crappy heifers were bought for cheap that realistically should not have even been bred ,,all because they thought they could make a quick buck., It devastated our industry, prices went up a little the last couple of years but I doubt we will see the prices we did before. A lot of fancy milking operations ended up sitting empty ..Milk prices are still strong here hopefully they stay that way..but the price of replacements is not..and quota is absolutely ridiculous..
 

TexasBred

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HD...stick with your "top quality cattle". I think they will always pay you back over the longhaul. A lot of Texas dairies in the past have milked the little "sorry ass" little heifers that wouldn't pay for themselves regardless of the feed etc....just didn't have the genetics material to work with. Literally thousands of so called "dairy cattle" with top production of 50-55 lbs. when no more than 60 days in milk. By the same token I've always believed and practiced that a cow with the capacity to milk will milk decently even on low grade cheap feed and will really ring the bell fed and handled properly.
 

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