What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
The Simon’s Pass conversion remains on track to begin milk production on newly irrigated pasture in the coming season.
“We’ve been saying for a while that our strong preference is for no further expansion in the Mackenzie Basin because we’re concerned it will have a negative impact on the region’s sensitive environment,” said Miles Hurrell, chief operating officer of Fonterra’s Farm Source.
“However, under the current Dairy Industry Restructuring Act, we are required to accept applications to supply us from farms within our collection zone. Before we pick up their milk the farms would need to have all required environmental consents.”
Valentine said he was meeting the terms of his consents and did not want to comment further on Fonterra’s position.
“They’ve agreed to take the milk and I think I’d just leave it at that,” he said.
“It’s their decision to take whatever view they want to. I really can’t comment any more on what they’re saying.”
The property is 9600ha -- about 5500ha in pastoral lease and the balance freehold -- straddling State Highway 8 just south of Lake Pukaki.
Under the conditions of his consents agreed to through the Environment Court, Valentine will put about 40% of the property into a conservation area. Much of the rest will be irrigated by a pipeline now under construction, bringing water 8km down the side of the lake from the Tekapo canal.
Although he has resource consent to run up to 15,000 cows, Valentine has said that was never his intention. He expects to take about seven years to develop the operation to its full size of about 5500 cows.
Fonterra’s remarks followed a high-profile protest against Valentine’s plans by Greenpeace, which sent 45 activists onto the site in a pre-dawn incursion on July 2.
Greenpeace claimed in a statement that it had stopped construction of the farm’s main irrigation pipeline for nine hours by having its supporters shackle themselves to machinery. Twelve people, including an 88-year-old man, were eventually arrested after police moved in.
Greenpeace sustainable agriculture campaigner Gen Toop said the “iconic and fragile” area is “no place for cows”.
“For the sake of the fragile Mackenzie and our rivers industrial dairy expansion has to stop. A line is being crossed here in the Mackenzie. If this precious and unique area can be converted into an industrial dairy operation nothing is safe.”
Greenpeace said at least 30,000 people have now signed its petition calling on the Government to strengthen regulations on freshwater and agricultural pollution and ban new dairy expansions.
Valentine was philosophical about his chances of preventing further protest incursions.
“There’s 50km of fenceline around the farm so it’ll be difficult to stop anything.”
