Data sharing initiative wins national award for saving farmers time
The work Fonterra has done with Ballance Agri-Nutrients Ltd, LIC and Ravensdown to save farmers time through better data connections has been recognised with a national award.
Corporate farmer and former Fonterra director Mark Townshend is urging shareholders to support Fonterra and its new leadership.
Townshend, who has farming interests in New Zealand, Chile, and the US, says NZ is “very lucky to have Fonterra”.
“Most milk producers around the world would dream of having a Fonterra in their country,” he told Dairy News.
“John Monaghan (new chairman) is a good bloke, as is Miles Hurrell (interim chief executive). With the headwinds Fonterra is dealing with, they need shareholder support.
“One thing is for certain: if Fonterra shareholders do not support and value their company no one else will.”
Townshend notes that while Fonterra does some things very well, it could do many other things better.
But Fonterra’s main task is to provide its NZ supplying shareholders with a world class milk price. With a price in the $6.50 - $7.00/kgMS range, all NZ farmers should be profitable and contented, Townshend says.
“The milk price European farmers are currently receiving is about the long term average; US dairy farmers are receiving milk prices below long term average.
“Fonterra farmers, with milk prices at $6.70 last season and forecast at $7.00 for the current season, are receiving a milk price higher than long term average; Fonterra is delivering what it set out to do.”
Fonterra farmers receiving a base farm gate milk price equal to, or better than other farmers around the globe is an amazing success when considering we produce our milk off a strong seasonal curve, and NZ farmers pocket the $1.00 /kg MS lower cost of production advantage.
Townshend says at one of the farming companies he’s involved in, the first 20 minutes of each board meeting are spent discussing what is happening globally and in NZ in terms of geo-politics, finance and markets supply and demand.
“With a well-informed Irish director connected in by phone, and the company’s US-based chief executive, we have good tentacles and conclude that both, NZ and NZ farmers are well served by Fonterra,” he says.
This company has in the last 15 months bought four NZ farms; all had been supplying Open Country Dairy (OCD) but now supply Fonterra.
“It is a very interesting statistic that over the last two seasons in NZ, 50% of dairy farms sold were supplying OCD, yet only 10% of [all NZ] farms supply OCD.
“The conclusions to be drawn here are that those who go to OCD are perhaps under more financial pressure, or the year-round farming method encouraged by OCD burns out farmers; fighting nature has always been hard.”
Townshend says without Fonterra setting a milk price, there is no way non-cooperative milk processors would be paying what they do.
“They have to pay a milk price to attract milk or face stranded assets,” he says.
“And they will pay no more than they need to pay.
“To expect them to do so has as much logic as farmers willingly paying more for fertiliser or stockfeed than they need to.”
Weathering the storm
Mark Townshend notes that New Zealand companies, including Fonterra, did well in weathering the global financial crisis ten years ago. The dairy industry was invaluable to the NZ economy through that period.
The real test for NZ dairy farmers came in the 2014-15 and 2015-16 seasons when the milk price dropped well below $5/kgMS.
“Farms generally were operating at a $1/kgMS deficit through this two year period.
“Fonterra advanced significant interest free loans to supplying shareholders through that period; I am trying to recall any Fonterra farmer publicly acknowledging their appreciation of support from our co-op.
“It would be reasonable to assume that it saved some farmers from economic ruin. And it probably meant less in unpaid bills to ensure rural servicing industries survived.”
Townshend says Fonterra drives processing efficiency, being world class in this area.
Managing director of Woolover Ltd, David Brown, has put a lot of effort into verifying what seems intuitive, that keeping newborn stock's core temperature stable pays dividends by helping them realise their full genetic potential.
Within the next 10 years, New Zealand agriculture will need to manage its largest-ever intergenerational transfer of wealth, conservatively valued at $150 billion in farming assets.
Boutique Waikato cheese producer Meyer Cheese is investing in a new $3.5 million facility, designed to boost capacity and enhance the company's sustainability credentials.
OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.
Compensation assistance for farmers impacted by Mycoplama bovis is being wound up.
Selecting the reverse gear quicker than a lovestruck boyfriend who has met the in-laws for the first time, the Coalition Government has confirmed that the proposal to amend Fringe Benefit Tax (FBT) charged against farm utes has been canned.
OPINION: Years of floods and low food prices have driven a dairy farm in England's northeast to stop milking its…
OPINION: An animal activist organisation is calling for an investigation into the use of dairy cows in sexuallly explicit content…