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.
"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."
