What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
He says Fonterra has made some major changes which he thinks are going to be productive, but he says the future of the NZ dairy sector is all about China.
"That is imponderable; you can't guess what's going to happen. China has been good for us, and you could argue we should have diversified more, but their prices were so much higher than the others that you would be a fool not to take," he says.
Looking to the 2024/25 season, Alexander believes farmers need a payout of at least $8.40/kgMS. He says a lot of people will survive on less but believes a typical payout should be $8.40.
Finally, Alexander has some special advice for dairy farmers: above all, get your kids well educated because not all will come home to the farm. He says education has never been so important and there is nothing wrong with the $40,000 student loan which can be paid back over time.
His other piece of key advice is to attend seminars, conferences and field days where farmers can pick up invaluable knowledge to help them through a crisis.
