Divestment means Fonterra can focus on its strengths
OPINION: Fonterra's board has certainly presented us, as shareholders, with a major issue to consider.
Fonterra has forecast an opening market-linked organic milk price of $9.20/kgMS for the 2016/17 season.
This follows the cooperative's recent announcement that it plans to introduce a market-linked organic milk price for its organic milk farmers.
Paul Grave, head of cooperative affairs, Waikato, says while the opening forecast organic milk price is a big step up from the $5.65/kgMS payment organic farmers currently receive (the organic fixed premium on top of the Farmgate Milk Price), it reflects consistently high prices for organic milk products in its global markets.
Grave says the marketplace for organic milk is very competitive and the market-linked organic milk price will help Fonterra to secure a steady stream of organic milk.
"The growth of the organics business is good news for the whole cooperative. Organic farmers actively participate in creating value by providing Fonterra with a certified organic milk stream and all farmer shareholders share in the value created by the organic business through dividend payments."
Increasing demand for organic milk products, and organic food in general, is leading to high prices for these products in international markets. While global milk prices have been volatile recently, prices for organic dairy ingredients have remained at the same relatively high levels since 2013/14, says Grave.
"Organic milk prices are high because consumers' appetite for organic milk products is growing faster than supply."
The margins the cooperative is achieving on its organic milk products are similar to some of its highest-earning consumer and food service products, says Grave.
"By selling higher-value products at premium market rates, the long-term organics strategy reflects Fonterra's priority to drive more value from every drop of milk."
Grave says Fonterra's organics business has been consistently profitable recently and has paid back the cooperative's investment in the business.
"Organics is a profitable business. The cooperative is focused on growing its organics business to benefit from the consistently high global market prices so that it can increase returns from this business for the benefit of all our farmers", says Grave.
Alliance Group's Pure South Handpicked 55 Day Aged Beef has been recognised on the world stage, securing top honours at the World Steak Challenge in the Netherlands.
Meat co-operative, Alliance has met with a group of farmer shareholders, who oppose the sale of a controlling stake in the co-op to Irish company Dawn Meats.
Rollovers of quad bikes or ATVs towing calf milk trailers have typically prompted a Safety Alert from Safer Farms, the industry-led organisation dedicated to fostering a safer farming culture across New Zealand.
The Government has announced it has invested $8 million in lower methane dairy genetics research.
A group of Kiwi farmers are urging Alliance farmer-shareholders to vote against a deal that would see the red meat co-operative sell approximately $270 million in shares to Ireland's Dawn Meats.
In a few hundred words it's impossible to adequately describe the outstanding contribution that James Brendan Bolger made to New Zealand since he first entered politics in 1972.
OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.
OPINION: Politicians and Wellington bureaucrats should take a leaf out of the book of Canterbury District Police Commander Superintendent Tony Hill.