increase font size
Fonterra chairman Peter McBride says the co-op's future success relies on its ability to maintain a sustainable milk supply in an increasingly competitive environment.
Fonterra could lose up to one-fifth of its milk supply unless it adopts a new capital structure.
The warning was delivered by chairman Peter McBride last week as he unveiled a revised capital structure proposal to farmer shareholders.
The revised proposal has key changes including a minimum shareholding requirement for farmer suppliers, allowing sharemilkers, contract milkers and farm lessors to buy co-operative shares and easier exit and entry provisions for supplier.
McBride and the board will take the new proposal back to shareholders in the coming weeks for further consultations.
He's confident of farmer support.
McBride says changing the co-operative's capital structure is a critical decision and not something the board and senior management are taking lightly.
"We are confident that thhis proposal would support the sustainable supply of New Zealand milk that our long-term strategy relies on."
McBride notes that Fonterra's future success relies on its ability to maintain a sustainable milk supply in an increasingly competitive environment.
"We see total New Zealand milk supply as likely to decline, and flat at best. Our share of that decline depends on the actions we take with our capital structure, perfomance, productivity and sustainability.
"If we do nothing, we are likely to see around 12-20% decline by 2030 based on the scenarios we have modelled."
Key changes are:
Unhappy Investors
Investors holding units in Fonterra Shareholders Fund are unhappy with the co-op's proposal to cap the listed fund.
In a letter to unit holders, the fund's chairman John Sherwin says retaining the fund, but removing features that support growth, liquidity, and relevance to investment markets, could put downward pressure on unit pricing.
The price of the units has declined about 25% since early March, when Fonterra published results of a shareholder survey that showed high support for farmer control and little interest in raising external capital.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.
OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.
Fonterra has delivered a fifth straight year of record organic milk price for farmer suppliers.
Fonterra says favourable weather conditions supporting pasture growth is boosting milk production.
Like many manufacturers around the world, European agricultural machinery and tractor manufacturers are currently operating in a difficult market environment. But they are heading to the world’s largest agricultural machinery event in Hanover next month with a degree of cautious optimism.
Established in 2021, the John Deere Technician of the Year Awards champion the important contribution parts and service technicians make to the Australian and New Zealand agriculture, construction and forestry industries.
Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.
New Zealand is closer to eradicating bovine TB than ever before, but possums remain a threat, says Beef + Lamb New Zealand.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
The ACT Party says media reports that global dairy giant Nestle has withdrawn from the Dairy Methane Action Alliance shows why New Zealand needs to rethink its approach to climate.
OPINION: Dairy industry players are also falling by the wayside as the economic downturn bites around the country.
OPINION: Methane Science Accord, a farmer-led organisation advocating for zero tax on ruminant methane, will be quietly celebrating its first…
