Two new awards open to help young farmers progress to farm ownership
Entries have opened for two awards in the New Zealand Dairy Industry Awards (NZDIA) programme, aimed at helping young farmers progress to farm ownership.
Writing in the latest ANZ NZ Agri Insight report, economists Matt Dilly and Matthew Galt said the $3.2b return, subject to regulatory approval, will be equal to about 0.7% of New Zealand’s GDP, averaging about $400,000 for each of Fonterra’s 8162 shareholders.
“The capital return will provide a tailwind to GDP growth through 2026,” the report says, “however, the boost to GDP is likely to be considerably smaller than 0.7% of GDP as only the portion spent domestically will add directly to GDP
“As such, the return is one tailwind to growth among a wider mix of tailwinds and headwinds and doesn’t change our view that GDP growth will pick up from 0.3% annual average growth in 2025 to a more robust 2.6% annual average growth in 2026.”
About 78% of New Zealand’s dairy farmers are Fonterra shareholders, and the report called the capital return “the icing on top of an already sweet farmgate milk price” for the year.
Discussing how farmers will likely spend their funds, the authors said “it will of course vary from farmer-to-farmer based on their personal circumstances”.
“Some combination of debt reduction, on-farm investment, off-farm investment, and consumption are the main possibilities.
“With the special dividend coming on top of an already favourable backdrop for dairy farmers, some are likely to loosen the purse strings on household spending, whether that be an overdue holiday, home improvements, a new car, or just regular day-to-day spending.”
ANZ NZ’s managing director for business and agri Lorraine Mapu said the bank would be supporting farmers’ ambitions and plans, and that it’s important they take the time to consider what’s right for their business
“Your proceeds, your plan – that’s our message,” Mapu said.
“We’re here to back what’s right for each farm, whether that’s restructuring lending, investing in growth, or simply holding on to the funds.
“There’s no one-size-fits-all approach. Some may look to reduce debt, others might invest in productivity or sustainability, and some may choose to hold a cash buffer for seasonal needs.
“For a small group of customers, repaying debt will be the most sensible choice and we will be transparent about any such needs and why.”
Mapu also noted some farmers may choose to use the funds outside their farming operations, including for family succession or other investments.
“This is a rare opportunity for shareholders to take stock and plan ahead with confidence,” she said.
