Friday, 10 August 2018 12:18

Fonterra farmers want answers

Written by 
Duncan Coull. Duncan Coull.

Fonterra farmers are putting their co-op on notice over the decision to reduce milk price and not to pay any more dividend this year.

Read: Fonterra knocks off 5c from last season’s payout.

Fonterra Shareholders Council chairman Duncan Coull expressed his “absolute disappointment” with the board decision.

In a strongly-worded statement, Coull says the board and management have some challenges ahead in rebuilding confidence through consistent performance and prudent management of shareholders’ capital.

“Having effectively retained an extra 20-25 cents council will seek to understand how this will be used and to what extent it will influence our gearing and credit rating as the strength of both is fundamental moving forward.

“The board and management can look forward to some very challenging discussions with council over the coming weeks and we will be seeking a very clear understanding of the plans that are being implemented in order to restore confidence in the shareholder base.”

In a rare move, Fonterra has reduced last season’s milk price by 5c to 6.70/kgMS. While it has retained the previously announced 25-30 cents guidance range for the dividend, it has indicated that the 10c/share dividend paid in April will be all farmers and investors will be getting for buying Fonterra share units.

It says this is being done to prop up the co-op’s balance sheet.

Coull says while he can understand the board’s rationale and that it is prudent to protect the balance sheet, “but the fact that we find ourselves in this situation is unacceptable”.

“While council acknowledges that part of governance is managing risk, another key responsibility is to createlong-termm value for shareholders.”

 

More like this

Featured

Farmers urged not to be complacent about TB

New Zealand's TBfree programme has made great progress in reducing the impact of the disease on livestock herds, but there’s still a long way to go, according to Beef+Lamb NZ.

Editorial: Making wool great again

OPINION: Otago farmer and NZ First MP Mark Patterson is humble about the role that he’s played in mandating government agencies to use wool wherever possible in new and refurbished buildings.

National

Machinery & Products

Farmer-led group buys Novag

While the name and technology remain unchanged and new machines will continue to carry the Novag name, all the assets,…

Buhler name to go

Shareholders at a special meeting have approved a proposed deal that will see Buhler Industries, the publicly traded Versatile and…

» Latest Print Issues Online

The Hound

Make it 1000%!

OPINION: The appendage swinging contest between the US and China continues, with China hitting back with a new rate of…

Own goal

OPINION: The irony of President Trump’s tariff obsession is that the worst damage may be done to his own people.

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter