Tuesday, 12 October 2021 06:55

Co-op modest despite payout triumph

Written by  Sudesh Kissun
Tatua chief executive Brendhan Greaney says the co-op isn't keen to compare payouts with other processors. Tatua chief executive Brendhan Greaney says the co-op isn't keen to compare payouts with other processors.

Small Waikato milk processor Tatua isn't blowing its own trumpet after blitzing other processors in the milk payout battle last season.

The co-operative is remaining modest despite paying $1.50/kgMS more to its farmer shareholders than Fonterra.

Tatua chief executive Brendhan Greaney told Dairy News that the co-op isn't keen to compare payouts.

"We are pleased with the result as being reflective of a well-rounded performance in another challenging year," he says.

"We are reluctant to compare our payout with others given there is such a range of business models, ownership structures and supplier entry costs - but nevertheless, we know we have achieved a good result for our shareholders."

Tatua announced a record payout of $10.43/kgMS before retentions for the 2020-21 season. The co-op retains $1.18/kgMS for reinvestment meaning its farmer shareholders get a cash payout of $9.25/kgMS. Fonterra last month announced a final payout of $7.74; milk price of $7.50 and 20c dividend. Synlait announced an average payout of $7.82/kgMS for last season - made up of a base milk price of $7.55 and incentive payment of 27c.

Tatua's 106 shareholder-owned farms had their second highest milk production season on record, supplying 15.65 million kgMS, 3.3% ahead of the previous year.

Greaney says the payout has been well received by farmer shareholders.

"We've had some very positive feedback - including broad support for retaining some earnings for reinvestment and maintaining a strong balance sheet."

The co-op has retained $18m for reinvestment to improve production capability and sustainability-related projects.

"We do have a reasonably weighty capital program planned for the year, including projects with a sustainability focus, as well as others to increase our capacity and capability in the manufacture of our specialist or value-add products," says Greaney.

In deciding the final payout, Greaney says Tatua sought to balance the needs of shareholder's farming businesses with the requirement for continued investment in the business to support longer-term sustainability, and "a sensible level" level of debt.

The co-op's gearing (debt divided by debt plus equity) averaged 20.5% last year, which was lower than the previous year average.

"We have deliberately reduced our debt levels over the last few years to be in apposition that we now think is about right for the environment we are in," adds Greaney.

He paid tribute to the co-op's workforce, both here and overseas.

"Our people have once again shown real dedication and commitment toward the business through another challenging year. Our financial performance and everything that has been achieved is the reflection of the collaboration and collective efforts of everyone."

More like this

Tatua's just too-good

OPINION: Earlier this month, small Waikato milk processor Tatua reminded the country that it’s still number one when it comes to paying farmers for their milk.

Tatua’s $10.50/kgMS tops, again!

Waikato-based milk processor Tatua has announced a final 2023-24 season payout of $10.50/kgMS for its farmer shareholders, again topping the payout stakes among NZ milk processors.

Payout stakes

OPINION: It's that time of the year again when milk processors announce their annual results and final milk payout for the previous season.

Tatua trick

OPINION: How does Tatua do it, year in, year out?

Featured

Australia develops first local mRNA FMD vaccine

Foot and Mouth Disease outbreaks could have a detrimental impact on any country's rural sector, as seen in the United Kingdom's 2000 outbreak that saw the compulsory slaughter of over six million animals.

NZ household food waste falls again

Kiwis are wasting less of their food than they were two years ago, and this has been enough to push New Zealand’s total household food waste bill lower, the 2025 Rabobank KiwiHarvest Food Waste survey has found.

Editorial: No joking matter

OPINION: Sir Lockwood Smith has clearly and succinctly defined what academic freedom is all about, the boundaries around it and the responsibility that goes with this privilege.

National

All eyes on NZ milk supply

All eyes are on milk production in New Zealand and its impact on global dairy prices in the coming months.

Machinery & Products

Leader balers arrive in NZ

Officially launched at the National Fieldays event in June, the Leader in-line conventional PRO 1900 balers are imported and distributed…

JDLink Boost for NZ farms

Connectivity is widely recognised as one of the biggest challenges facing farmers, but it is now being overcome through the…

New generation Defender HD11

The all-new 2026 Can-Am Defender HD11 looks likely to raise the bar in the highly competitive side-by-side category.

» Latest Print Issues Online

Milking It

Full cabinet

OPINION: Legislation being drafted to bring back the controversial trade of live animal exports by sea is getting stuck in the…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter