Fonterra opens organic milk supply to South Island dairy farmers
South Island dairy farmers will soon be able to supply organic milk to Fonterra.
If approved by the Commerce Commission and with that company in receivership, it will deliver certainty to affected farmer-creditors.
"This is an unexpectedly good bolt out of the blue, " says Willy Leferink, Federated Farmers Dairy chairperson.
"It may surprise those outside of the industry but we thought Fonterra was an unlikely contender for NZ Dairies. We now know Fonterra sees the Studholme dairy plant as complementary to its new $500 million facility being built at Darfield.
"So here we have a formerly Russian owned factory coming into New Zealand hands.
"While the sale is a commercial deal and is subject to Commerce Commission approval, some financial pain for creditors seems sadly unavoidable.
"Fonterra is preferable to a hard-nosed corporate buying these assets for the regulated milk it would secure. Such an outcome would treat farmer-suppliers as just another input.
"So this deal strongly vindicates the cooperative business model.
"Fonterra Cooperative Group will give former NZ Dairies farmer-suppliers milk contracts for the current season. For the next six years the door is open for these suppliers to share-up in the coop. It is a genuine path back to shared ownership in the means of production.
"Eyes now turn to what can be salvaged for creditors of NZ Dairies. We know there are some sharemilkers seriously affected by the receivership while farm balance sheets will take a hit.
"I have personally spoken to the major lenders and stressed the need to work with affected farmers and sharemilkers.
"If you are a member of the Federation, you can also call 0800 FARMING (0800 327 646) to speak to our legal and employment law teams," Leferink says.
