All eyes on NZ milk supply
All eyes are on milk production in New Zealand and its impact on global dairy prices in the coming months.
Fonterra confirmed it has entered into a conditional agreement to acquire the milk processing assets of the New Zealand Dairies Ltd group in South Canterbury.
The acquisition, which is subject to Commerce Commission clearance, would result in NZDL's existing farmer suppliers being paid in full by the receivers and being able to have their milk processed and paid for from the start of the new dairy season which commences in a few weeks.
The Russian-owned dairy factory was placed into receivership on May 17, 2012. The receivers, Colin Gower, Stephen Tubbs and Brian Mayo-Smith of BDO Chartered Accountants, called for bids to buy the business and assets of NZDL soon after.
Fonterra CEO Theo Spierings says the acquisition ensures the Studholme plant continues to operate and its farm suppliers have certainty that they will be able to sell their milk on a commercial basis from the start of next season.
"The Studholme plant is processing around 150 million litres of milk a year into milk powders for export," says Mr Spierings.
"It will complement our new Darfield plant which is due to start taking milk in August.
"Our Strategy Refresh has clearly identified the importance of growing milk volumes and optimising our New Zealand manufacturing operations. This transaction helps deliver on that priority."
As part of the agreement, NZDL's existing suppliers have been offered the opportunity to supply Fonterra on contracts, which will enable them to become Fonterra fully share backed after the 2012/2013 season and require them to be shareholders within six years.
Fonterra plans to operate the Studholme plant up until the end of the 2012/2013 season pending a decision by the Commerce Commission on Fonterra's clearance application.
"This means that we are able to collect and process farmers' milk from the start of the new season, avoiding the prospect of them having to spill milk," says Spierings.
"The solution we've developed with the receivers will mean that suppliers who continue to supply NZDL have a tanker coming up their driveway to take their milk and ensures they still have an income.
"It also means we are able to provide for continued employment to many of NZDL's staff during this period."
All eyes are on milk production in New Zealand and its impact on global dairy prices in the coming months.
Claims that some Southland farmers were invoiced up to $4000 for winter grazing compliance checks despite not breaching rules are being rejected by Environment Southland.
According to the most recent Rabobank Rural Confidence Survey, farmer confidence has inched higher, reaching its second highest reading in the last decade.
From 1 October, new livestock movement restrictions will be introduced in parts of Central Otago dealing with infected possums spreading bovine TB to livestock.
Phoebe Scherer, a technical manager from the Bay of Plenty, has won the 2025 Young Grower of the Year national title.
The Fencing Contractors Association of New Zealand (FCANZ) celebrated the best of the best at the 2025 Fencing Industry Awards, providing the opportunity to honour both rising talent and industry stalwarts.
OPINION: Westland Milk may have won the contract to supply butter to Costco NZ but Open Country Dairy is having…
OPINION: The Gene Technology Bill has divided the farming community with strong arguments on both the pros and cons of…