Friday, 15 November 2024 09:56

Eroding share of milk worries Fonterra shareholders

Written by  Sudesh Kissun
Fonterra Co-operative Council chair John Stevenson. Fonterra Co-operative Council chair John Stevenson.

Fonterra shareholders are concerned with a further decline in the co-op’s share of milk collected in New Zealand.

Last season, the co-operative’s share of NZ milk dropped to 78.1%, below a target of 79%.

Fonterra Co-operative Council chair John Stevenson told the co-op’s annual meeting in New Plymouth yesterday that farmers are concerned.

“Council sees retention of milk as a key measure of success of the introduction of the flexible shareholding capital structure and Fonterra’s revised strategy,” Stevenson says.

Fonterra chairman Peter McBride agreed that its faces increasing competition for both milk and capital at home. However, he says opportunity still exists for the co-op.

“We are and always will be a New Zealand farmer-owned co-op, but we are also a global export business. When considering our strategy, we need to challenge ourselves to look beyond the back fence, and past the here and now.”

He also noted that the world was moving out of an era of trade liberalisation and co-operation and into a world that is more expensive, competitive and volatile. Expectations are evolving and New Zealand milk is becoming scarce, he notes.


Read More


“Customers are increasingly calling on us to partner with them to improve their sustainability and innovation capabilities. And there’s even more focus on sustainability from banks, regulators, and from a market access perspective.

“The cost of capital has increased, and many industries – including agriculture and our bankers– face higher capital requirements.

“In this new global context, Fonterra also faces increasing competition for both milk and capital here at home. That all sounds inherently negative, and it’s certainly not without risk, but the opportunity for us still absolutely exists.

“Demand for dairy continues to grow and, in a rapidly changing world, we are uniquely positioned to capitalise on any shifts.”

McBride says Fonterra has high quality New Zealand milk which is becoming scarce.

“And most critically, we have scale. That gives us great confidence in the future of our co-op. Success will come by focusing on our comparative advantages, simplifying the business to meet that, and then aligning our people to achieve that singular vision.”

More like this

Winston's crusade

OPINION: A short-term sugar hit. That's what NZ First leader Winston Peters is calling the proposed sale of Fonterra's consumer and associated businesses.

Featured

Carrfields invests in new Ashburton R&D hub

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.

Elite sheep dogs to go head-to-head at Ashburton A&P Show

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.

National

Tributes paid to Jim Bolger

Dignitaries from  all walks of life – the governor general,  politicians past and present, Maoridom- including the Maori Queen, church…

Machinery & Products

» Latest Print Issues Online

The Hound

Red faced

OPINION: The Greens have taken the high moral ground on the Palestine issue and been leading political agitators in related…

Cold comfort

One of the most galling aspects of the tariffs whacked on our farm exports to the US is the fact…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter