Data sharing initiative wins national award for saving farmers time
The work Fonterra has done with Ballance Agri-Nutrients Ltd, LIC and Ravensdown to save farmers time through better data connections has been recognised with a national award.
Fonterra plans to shave $1 billion off its operating costs by 2030.
The cost cutting exercise will lead to job losses. The co-operative has also announced two new efficiency metrics that it will report on to shareholders every six months.
In an email to farmer shareholders this morning, Fonterra chief executive Miles Hurrell says the co-op had delivered good earnings through the 2023 financial year and had a strong balance sheet.
But he says, looking out to 2030, achieving the co-op’s long-term targets depends on “rigorous focus on where we allocate your milk and where we invest your cash”.
“We also know this means reducing our costs to assist us to hit our short-term and long-term targets,” he told shareholders.
“For these reasons, since late last year we have been developing plans with an aim to reduce costs across the co-op by about $1 billion over the 7 years to 2030.
“This goal will help offset higher inflation expectations and we intend to achieve it through a range of projects that will streamline how we operate.
“These projects include operational efficiencies, reducing cash costs across the business, and digitisation of business processes.”
Hurrell says the co-op plans to front load as much of this activity as possible over the next few years.
This work has been underway for some time, with cost reduction and business simplification activities already delivered or in progress through the FY23 and FY24 business plans.
To track its progress, Fonterra will report to shareholders on two new efficiency metrics: operational expenditure/kgMS (opex), targeting a 4% cash operating cost improvement per year; and gross profit per kgMS – targeting a 2% New Zealand cash manufacturing cost improvement every year.
Hurrell says while this focus on efficiencies will have implications for staff numbers, the co-op doesn’t want this to be at the expense of driving value growth.
“This is about enhancing our culture of continuous improvement and maintaining progress towards our long-term targets by being very deliberate about where we focus our people and your cash,” he says.
Fonterra will release its annual results in three weeks. Following that, directors and management will hold roadshow meetings with shareholders.
Managing director of Woolover Ltd, David Brown, has put a lot of effort into verifying what seems intuitive, that keeping newborn stock's core temperature stable pays dividends by helping them realise their full genetic potential.
Within the next 10 years, New Zealand agriculture will need to manage its largest-ever intergenerational transfer of wealth, conservatively valued at $150 billion in farming assets.
Boutique Waikato cheese producer Meyer Cheese is investing in a new $3.5 million facility, designed to boost capacity and enhance the company's sustainability credentials.
OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.
Compensation assistance for farmers impacted by Mycoplama bovis is being wound up.
Selecting the reverse gear quicker than a lovestruck boyfriend who has met the in-laws for the first time, the Coalition Government has confirmed that the proposal to amend Fringe Benefit Tax (FBT) charged against farm utes has been canned.
OPINION: Years of floods and low food prices have driven a dairy farm in England's northeast to stop milking its…
OPINION: An animal activist organisation is calling for an investigation into the use of dairy cows in sexuallly explicit content…