Winston Peters calls Fonterra vote result 'utter madness'
New Zealand First leader and Foreign Affairs Minister Winston Peters has blasted Fonterra farmers shareholders for approving the sale of iconic brands to a French company.
OPINION: Fonterra shareholders will this week decide the future shape of their co-operative.
The message for shareholders is clear: ignore the looming challenges facing the co-operative at your own peril.
Fonterra is at a crossroads. Milk supply in New Zealand is declining or will remain flat at best, thanks to environmental pressures, new regulations and alternative land uses.
At the same time, competition for New Zealand is showing no signs of slowing. Two more independent milk plants are going up in the Waikato, the heart of New Zealand dairy country.
Fonterra has signalled a change in strategy – moving out of overseas milk pools and focusing on adding value to NZ milk. But it needs to change the way it does business with farmer shareholders or face around 12-20% milk decline by 2030, based on its own modelling.
The capital structure isn’t the only thing that needs to change. The co-operative has to lift its performance and increase farmer returns, both through the milk price and dividends.
At the same time, the environmental credentials of both the co-operative and its farmers must continue to improve.
For the past few weeks Fonterra farmers have been mulling over the proposed flexible shareholding.
An important issue for shareholders is the future performance of Fonterra. Management have laid their strategy on the table for 2030: a 40-50% increase in operating profit from FY21 and, with the reduced interest from having less debt, this should translate into an approximately 75% increase in earnings, steadily increasing dividends to around 40-45c/share.
Management are also promising a group return on capital of 9-10%, up from 6.6% in 2021.
Through planned divestments and improved earnings, they expect a return of about $1 billion to shareholders by FY24, and around $2 billion of additional capital available for a mix of investment in further growth and return to shareholders.
Fonterra’s strategy and ability to achieve these targets depends on a sustainable supply of New Zealand milk and in turn a capital structure that enables this.
Fonterra must be an attractive option to farmers, who have a choice on where their milk goes.
That’s why the proposed capital structure gives all farmers a level of flexible shareholding, which is critical to supporting farmers to join or stay with the co-op.
Fonterra farmers need to give a strong mandate to its board and management by approving the new capital structure this week.
A strong vote will also make it easier for Fonterra’s board to get the Government onside and pass the necessary regulatory changes.
Acclaimed fruit grower Dean Astill never imagined he would have achieved so much in the years since being named the first Young Horticulturist of the Year, 20 years ago.
The Ashburton-based Carrfields Group continues to show commitment to future growth and in the agricultural sector with its latest investment, the recently acquired 'Spring Farm' adjacent to State Highway 1, Winslow, just south of Ashburton.
New Zealand First leader and Foreign Affairs Minister Winston Peters has blasted Fonterra farmers shareholders for approving the sale of iconic brands to a French company.
A major feature of the Ashburton A&P Show, to be held on October 31 and November 1, will be the annual trans-Tasman Sheep Dog Trial test match, with the best heading dogs from both sides of the Tasman going head-to-head in two teams of four.
Fewer bobby calves are heading to the works this season, as more dairy farmers recognise the value of rearing calves for beef.
The key to a dairy system that generates high profit with a low emissions intensity is using low footprint feed, says Fonterra program manager on-farm excellence, Louise Cook.
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