Pallet maker retains Fonterra contract
Timpack, one of New Zealand's largest wooden pallet and bin manufacturers, has been rewarded an exclusive contract to supply Fonterra.
OPINION: Has Fonterra's capital structure review hit a snag?
If the volatile share price is anything to go by, then everything isn’t hunky dory within the co-operative.
When Fonterra released its proposals on May 6, chairman Peter McBride had a word of caution for farmer shareholders.
He expected moving to a farmer-only market, where only Fonterra farmers can trade shares among themselves, would impact the price at which co-op shares are traded.
He also cautioned that there may not be as much liquidity in the market.
Both the traded price of shares in Fonterra and traded price of units in the Fonterra Shareholders Fund (FSF) have collapsed since Fonterra started consulting its farmer shareholders.
Trading continues to be volatile. On May 6, Fonterra shares were trading at $4.56/share. By June 18, it had dropped to $2.80, wiping millions of dollars off farm balance sheets. Last week the price recovered a little and hovered around $3.60.
On May 6, FSF shares were trading at $4.60. Within six weeks it had shed almost a dollar.
A farmer-only market raises the question: who would be able to buy and hold shares? And what about sharemilkers and contract milkers supplying Fonterra?
Fonterra farmers also need to decide whether to keep the FSF. Again, there are mixed views among farmers.
Some farmers are questioning whether buying it back would be the best use of capital.
Removing the fund would involve an offer by Fonterra to unit holders to buy back their units at a fixed price. The approval of at least 75% of unit holders entitled to vote would be needed for the offer to be accepted. Fonterra’s consultation documents say that any fund buyback offer amount “would need to be acceptable to unit holders, fair to farmers and would need to make more sense to the co-op than the Capped Fund alternative.”
Another challenge is how to make any transition to a new capital structure as fair as possible for farmers.
With share prices nosediving, the co-op is looking at extending the timeframe in which current farmers can hold onto their shares once they retire or cease supply.
To get things moving in the right direction the chairman has been embarking on another round of farmer meetings throughout the country.
Whether he’s able to calm fears among shareholders and get them onside remains to be seen.
The 2025 South Island Agricultural Field Days (SIAFD) chairman, Rangiora farmer Andrew Stewart, is predicting a successful event on the back of good news coming out of the farming sector and with it a greater level of optimism among farmers.
WorkSafe New Zealand is calling on farmers to consider how vehicles move inside their barns and sheds, following a sentencing for a death at one of South Canterbury’s biggest agribusinesses.
Now is not the time to stop incorporating plantain into dairy pasture systems to reduce nitrogen (N) loss, says Agricom Australasia brand manager Mark Brown.
Building on the success of last year's events, the opportunity to attend People Expos is back for 2025, offering farmers the chance to be inspired and gain more tips and insights for their toolkits to support their people on farm.
Ballance Agri-Nutrients fertiliser SustaiN – which contains a urease inhibitor that reduces the amount of ammonia released to the air – has now been registered by the Ministry of Primary Industries (MPI). It is the first fertiliser in New Zealand to achieve this status.
Precision application of nitrogen can improve yields, but the costs of testing currently outweigh improved returns, according to new research from Plant and Food Research, MPI and Ravensdown.
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