Tuesday, 08 October 2024 13:55

Getting farmers back on side

Written by  Staff Reporters
Synlait is offering a one-off payment of 20c/kgMS to retain South Island suppliers. Synlait is offering a one-off payment of 20c/kgMS to retain South Island suppliers.

Milk processor Synlait is offering a one-off payment of 20c/kgMS to retain South Island suppliers, many of whom issued cessation notices to the company this year.

The company hopes the extra payment will entice farmer suppliers to stay.

The extra payment comes with conditions: to be eligible farmer suppliers must not have a cessation notice in place on 31 May 2025, are supplying milk to Synlait in the 2025 / 2026 season and remain un-ceased until 31 August 2025.

The listed company, majority-owned by Bright Dairy of China from October 1, is fighting to keep suppliers on board. Under Synlait’s milk supply agreement, farmers must issue a two-year cessation notice before withdrawing their supply.

Therefore, farmer suppliers would have to issue another cessation notice before May 31 this year for supply to be withdrawn by the end of 2025-26 season. The one-off payment will be based on milksolids supplied in the 2024-25 season and will also be made available to new suppliers.

Synlait chief executive Grant Watson says the company began FY24 with too much production capacity, unsustainably high levels of debt, significantly higher interest rates, and sharply declining demand for infant formula at a macro level.

“Although those challenges are evident in the year’s result, we begin FY25 with new momentum and a stronger financial foundation.


Read More


“Our future success depends on a strong, stable and competitive farmer base. Providing farmer suppliers with compelling reasons to remove cessation notices is a top priority, ensuring we have the secure milk supply to underpin our business recovery.

“We have announced additional payments for our farmer suppliers to recognise how critical their milk supply is to Synlait’s future. We hope these combined actions will accelerate cease notice withdrawals.”

More like this

Brighter future

OPINION: The abrupt departure of Synlait chief executive Grant Watson could be a sign that Chinese company Bright Dairy, the new majority owner of the listed company, is taking charge.

'Quite a journey'

Former Synlait chief executive Grant Watson says the past two years have been quite the journey.

Synlait CEO departs

The first change in Synlait’s management team, since China’s Bright Dairy securing 65% ownership, has been announced.

'Mood change' among Synlait farmers

Canterbury milk processor Synlait says some farmer suppliers have been inquiring about the process to remove their cessation notices, handed in earlier this year.

Featured

New ag degrees at Massey

Changing skill demands and new job opportunities in the primary sector have prompted Massey University to create a new degree course and add a significant major into another in 2025.

The show is on!

It was bringing in a new Canterbury A&P Association (CAPA) show board, more in tune with the CAPA general committee, that has ensured that Christchurch will have a show this year, says CAPA general committee president Bryce Murray.

National

Food charity to hold online auction

Meat the Need, New Zealand’s dedicated charity delivering locally sourced protein meals to food-insecure communities, is launching an online National…

Machinery & Products

An ideal solution for larger farms

Designed specifically for large farms that want to drill with maximum flexibility, efficiency and power, the new Lemken Solitair ST…

Landpower increases its offering

Landpower and the Claas Harvest Centre network will launch the Claas Scorpion and Torion material handling solutions to the market…

» Latest Print Issues Online

The Hound

Leaky waka

OPINION: Was the ASB Economic Weekly throwing shade on Reserve Bank governor Adrian Orr when reporting on his speech in…

Know-it-alls

OPINION: A reader recently had a shot at the various armchair critics that she judged to be more than a…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter