Editorial: Well Done, Miles!

The co-operative had just announced the first-ever annual net loss ($196 million) in its 17-year history.

Farmer shareholders were on the edge and independent processors were biting at the co-op’s heels to poach suppliers.

Fast forward eight years and the co-operative is well and truly back into profitability.

Morale among farmer shareholders is at an all-time high. In the coming weeks, they will get a windfall of $3.2 billion from the sale to Lactalis of its consumer and related businesses in New Zealand, Australia and around the world. There’s also a 16c/share dividend from Mainland Group’s profits under its ownership.

The cherry on top is Fonterra lifting its forecast milk price for the season to $9.70/kgMS, almost matching last season’s record payout.

It’s clear that the ‘Miles Hurrell Formula’ worked for the co-operative.

His objective was clear: leveraging New Zealand’s grass-fed milk, improving financial discipline, and focusing on high-value ingredients and foodservice rather than global asset ownership.

Credit must go to Hurrell and his team for turning Fonterra around from the disastrous result eight years ago.

With Hurrell’s resignation the focus now turns on who will be his successor.

Hurrell says he’s been thinking about his future with the co-op and the sale of the consumer business is “a natural juncture for a new leader to come in, take the organisation forward to the next level”.

Hurrell has a six month notice period, which enables an organised leadership transition.

Pressed by journalists on whether there’s a strong case for internal succession, Hurrell quickly said that it was a matter for the board.

There are a couple of internal candidates that Hurrell thinks McBride can take to the board.

For farmers, they want the board to pick someone who is also honest and frank about what is going on and will also will lead in the style that farmers have enjoyed from Hurrell.