Survey shows most Fonterra farmers plan to use capital return for debt reduction
A large slice of the $3.2 billion proposed capital return for Fonterra farmer shareholders could end up with the banks.
Tough times. Fonterra’s CFO Marc Rivers, chair John Monaghan and CEO Miles Hurrell fronting at this year’s annual result briefing.
Fonterra chairman John Monaghan says farmers are backing a performance review of all co-op investments.
Farmers also support the appointment of Miles Hurrell as the interim chief executive, he says.
Speaking to Rural News after a round of farmer shareholder meetings last month, Monaghan said farmers are confident the co-op is in good shape.
Fonterra’s poor financial performance - the co-op recorded its first-ever loss last financial year -was raised by farmers during the meetings attended by Monaghan, Hurrell and chief financial officer Marc Rivers; about 2000 farmers attended.
The loss-making investment in the Chinese baby food company Beingmate was also top of the agenda during the question and answer sessions.
Monaghan says Fonterra farmers are keen to put the disappointing results behind them but wanted to know what steps are being taken to lift performance. He revealed that the Beingmate saga will be resolved first; a senior management team was in China for talks with Beingmate bosses.
“We have given farmers no definite timeframe but I’ve assured them that Beingmate is the first item on the list,” he said. “Our farmers are very interested in the performance review; we will keep them updated and no one will die wondering.”
Monaghan says while farmers were concerned about the $439 million write-off in Beingmate they were happy with the China business.
“While Beingmate has been disappointing, overall we have grown revenues from the China business to $4 billion.”
Federated Farmers Waikato president Andrew McGiven says the ball is now firmly in the directors’ and senior management’s court as to how they review and revise the strategy to reverse last year’s result.
“The key to this will be an improved communication and public relations strategy towards shareholders and suppliers to ensure there is improved confidence from the grassroots so that milk supply is guaranteed.”
A South Canterbury farmer and candidate for the Fonterra board election, Leonie Guiney, says she expects the new leadership team to act on loss-making assets. She says shareholders seemed prepared to give Hurrell a chance and she was encouraged by his presentation at a shareholder meeting in Ashburton.
“I would expect action on loss-making assets in the near term if he is to be able to strengthen our position to invest where we have advantages,” she says.
Guiney says she heard no indication that shareholders favour splitting up the co-op as some commentators have suggested.
“That is not the solution; I heard a desire for change in the way we operate not to abandon the co-op model.”
LIC chief executive David Chin says meeting the revised methane reduction targets will rely on practical science, smart technology, and genuine collaboration across the sector.
Lincoln University Dairy Farm will be tweaking some management practices after an animal welfare complaint laid in mid-August, despite the Ministry for Primary Industries (MPI) investigation into the complaint finding no cause for action.
A large slice of the $3.2 billion proposed capital return for Fonterra farmer shareholders could end up with the banks.
Opening a new $3 million methane research barn in Waikato this month, Agriculture Minister Todd McClay called on the dairy sector to “go as fast as you can and prove the concepts”.
According to ASB, Fonterra's plan to sell it's Anchor and Mainlands brands could inject $4.5 billion in additional spending into the economy.
New Zealand’s trade with the European Union has jumped $2 billion since a free trade deal entered into force in May last year.

OPINION: The Greens have taken the high moral ground on the Palestine issue and been leading political agitators in related…
One of the most galling aspects of the tariffs whacked on our farm exports to the US is the fact…