Dairy unity
OPINION: A last-minute compromise ensured that the election of the new Federated Farmers national dairy chair wasn't a repeat of the Super 15 rugby final - Canterbury versus Waikato.
Canterbury farmer and former Federated Farmers dairy leader Willy Leferink says farmers shouldn't let banks run their businesses.
His comments come in the wake of one of New Zealand's largest dairy farm operators falling into receivership.
With the milk payout at near-record levels and low interest rates, the collapse of Van Leeuwen Group (VLG) has caused dismay among farmers.
Leferink points out that VLG encountered difficult days after the outbreak of M. bovis in 2017 when the payout wasn't as high. He told Rural News that he'd heard an Australian finance company had put Van Leeuwen Group into receivership.
"We think of banks as our friends. Now, I'm not saying they are our enemies, because I owe lots of money to the bank and they are a good tool," Leferink told Rural News.
"But we've got to run our own businesses. Once we let the bank run our businesses, we are in their hands."
On April 21, Calibre Partners wrote to VLG creditors saying it had been appointed receivers by Merricks Capital VLG Fund.
In a letter to suppliers on the same day, receivers Brendon Gibson, Neale Jackson and Natalie Burrett, said they are now in control of the assets of businesses of VLG.
They intend to continue running the business, which comprises 10 dairy platforms and four support blocks with 8,000ha under management, milking approximately 10,000 cows. It also includes the world's largest robotic farm.
Owned by Aad and Wilma van Leeuwen, the business was among a number of other farms around New Zealand affected by Mycoplasma bovis, which hit the VLG farms in July 2017.
The van Leeuwens were also embroiled in a legal battle with Ministry for Primary Industries (MPI) in a dispute about compensation.
They have already been paid out $63 million by MPI, but sought further compensation for professional consultancy fees, bank charges and assorted other costs.
In late 2019, VLG refinanced its operations under a $140 million deal with Australian-based funds manager Merricks Captial, its first foray into the NZ agricultural market.
Merricks described its entry into New Zealand as an opportunity for New Zealand businesses.
"In an agricultural industry that is starved of capital, we provide a flexible, agile, alternative lending option for customers in New Zealand. We are here to fill the void left by banks to ensure that the New Zealand market has access to the capital it needs to thrive," the statement said.
In February this year, Merricks announced that a related entity had loaned $12.7 million to Happy Valley Nutrition, the company behind a new $280m milk processing plant in Otorohanga.
Questions are being raised about just how good the state of the dairy industry is - especially given that the average farmgate payout for the coming season is set to exceed $10/kgMS.
A leading financial and banking advisor says he doubts if most dairy farmers fully understand the dynamics of banking.
Dairy farmers are shoring up their balance sheets, with almost $1.7 billion of debt repaid in the six months to March 2025.
Virtual fencing company Halter is going global but for founder Craig Piggott, New Zealand farmers will always remain their main partners.
A former Fonterra executive is the new chair of the Dairy Companies Association of New Zealand (DCANZ).
New Federated Farmers national dairy chair Karl Dean is looking forward to tackling the issues facing the sector.
OPINION: Dust ups between rural media and PR types aren't unheard of but also aren't common, given part of the…
OPINION: The Hound hears from his canine pals in Southland that an individual's derogatory remarks on social media have left…