Oil and Milk

Generali

Generally speaking, companies that are not viable should go bust: if the demand isn't there at a price that covers costs then the company is ultimately doomed anyway.

The only exceptions really should be things necessary for defence (oil might come under that I guess) and one off shocks that are unlikely to be repeated (think earthquake in the Cotswolds).

Generali

ukcarper wrote: »

That's ok if you are happy to import all our milk.

Britain already imports about 2/3rds of her food and has been a net food importer for generations.

jacko74

Well my local (medium sized) dairy farm doesn't seem to be doing too bad... with their 2 brand new matching his n hers 4x4s that they buy every 2 years and the 4 new build houses that they bought all in one go for each of their 4 daughters.

worldtraveller

CLAPTON wrote: »

do you have (expensive) milk delivered to your door or buy supermarket stuff?

I still have my milk delivered, through personal choice, to help my, excellently run, and quality service, local dairy company business. However, I totally agree, that if they cannot operate profitably in a free market, then they should not be taxpayer funded.

CLAPTON

well, obviously companies can't lose money year on year as they would go bankrupt


so what is meant by 'losing' money : does that mean what it means in normal speak?
or does in mean 'lose' money except for tax payer farming support?

does anyone know?

Thrugelmir

It's one thing to blame the supermarkets for the selling price. However what's impacting the production costs? Animal feed stuffs obviously. If energy prices fall then presumably dairy farmers will be net gainers.

they specifically cite problems with supermarkets competing fierecly on prices

The consumers favourites Aldi and Lidl lead the way on pricing.

Linton

The problem is that milk isnt a free market as there are very few major buyers and lots of small sellers. This makes it easy for the buyers (the supermarkets) to switch suppliers but difficult for the sellers to swap. Especially as the power is highly asymmetric. The supermarkets have the finance to sell particular products at a loss for an extended period, the farmers dont. The nature of the competition between the supermarkets encourages them to operate in unison so we have an effective cartel even if its not a formal one.

michaels

AS I understand it there is a glut in milk supplies in Europe because of Russian import controls in retaliation for the sanctions resulting from Ukraine.

So some would argue that British milk producers are not suffering from the effects of a 'free market' but rather because of politically driven market distortions that they could never have anticipated when they made investment decisions. If this is really the situation and given that it may well be a temporary market dislocation I could make a case for offering British dairy farmers transitional support.

CLAPTON

Linton wrote: »

The problem is that milk isnt a free market as there are very few major buyers and lots of small sellers. This makes it easy for the buyers (the supermarkets) to switch suppliers but difficult for the sellers to swap. Especially as the power is highly asymmetric. The supermarkets have the finance to sell particular products at a loss for an extended period, the farmers dont. The nature of the competition between the supermarkets encourages them to operate in unison so we have an effective cartel even if its not a formal one.

how do wholesale UK milk prices compare with european imports?

tkane

carslet wrote: »

Government should take no action, if farmers or oil companies go bust then so be it.

Easy to say that sitting at your desk hiding behind your computer screen.

Would you say that to the faces of the hundreds of thousands of workers across various industries that may lose their jobs if it was not for government support? 80% of our manufacturing could be exported if the 'free market' had its way.