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Ian Brown
Fonterra farmers understand why the co-op has slashed its forecast milk payout this year, says Shareholders Council chairman Ian Brown.
"Most farmers understand the reality of the situation is that this year will not be a great one in terms of milk price," he says.
"Farmers will be focussed on getting through this year and ensuring they place their businesses in the best possible shape for next season."
The council represents Fonterra's 10,500 shareholders.
Fonterra this morning reduced its 2014-15 forecast payout by 60c to $4.70/kgMS. The co-op is still sticking to estimated dividend range of 25-35 cents per share; this amounts to a forecast cash payout of $4.95 – $5.05 for the current season.
Brown says with an estimated dividend range of 25-35c/share farmers will be expecting a tangible return on their investment in the co-op.
"Fonterra has had a significant focus on implementing the strategy over the past couple of years and it is important, especially in a season where the milk price is down, that Farmers receive the full benefit for their investment in the integrated supply chain that their co-op provides."
In a follow-up to this old mutt’s piece two issues ago about Fonterra directors getting to grips with the co-op’s financial state and loudly sharing their dismay in the Koru club, another of the Hound’s spies has passed on more news in the ‘Fonterra director watch’ category.
Fonterra says there’s an urgent need to improve return on capital invested in the co-op by farmers and unit holders.
Fonterra has taken a $126 million hit over the sale of its stake in Venezuelan consumer joint venture, Corporacion Inlaca.
Fonterra is pulling out of a European joint venture as part of its portfolio review following last year’s disastrous financial results.
Fonterra says it has returned to profitability with a net profit of $80m for the first half of the 2019 financial year.
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