Fonterra Whareroa sets cheese record, wins top award
Fonterra Whareroa wrapped up a successful season with a record-breaking cheese production volume and several gongs at the co-op's annual Best Site Cup awards.
OPINION: Is Fonterra sliding towards insolvency?
That’s the big question as Fonterra’s share price continues its painful march southwards.
The co-op was in trouble even before its shock announcement on August 12 that it expected to incur a reported loss of $590-675 million this year -- a 37-42 cent loss/share from writedowns of up to $860m.
On Friday, August 9, Fonterra’s shares were trading at $3.76/share, still far from their heyday of $6.60/share.
Last week, the share price had dipped to $3.17/share, wiping millions of dollars off farmer shareholders’ balance sheets.
Banks are already putting pressure on farmers. Whether Fonterra is facing similar pressure from its lenders is hard to tell. But it’s not hard to tell that Fonterra is nearly at the edge of the cliff. Despite writing down bad and poor investments it needs to do more.
Expect bad news for Fonterra staff when chairman John Monaghan and chief executive Miles Hurrell front up with the co-op’s annual results on September 12. The co-op is set to trim its workforce and drastically cut costs. But whether these are enough to arrest the slide in the share price remains to be seen.
What else can Fonterra do?
This brings us to the capital structure. In 2012 Fonterra introduced Trading Among Farmers -- an attempt to keep 100% ownership and control with farmer shareholders and at the same time enable access to outside capital.
Back then Fonterra farmers were in no mood to put any part of their business with outside investors. But now the co-op’s financial predicament could force farmers to think differently.
The co-op has already started capital restructuring talks on a board sub-committee and with management. It’s crucial for Fonterra to get this right. Some directors are eager to float part of the co-op while others remain adamant about 100% ownership and control.
The final decision remains with farmers.
These are worrying times for Fonterra. Perhaps this is the time to consider a cornerstone investor to bring capital to restore credibility to the balance sheet and confidence among investors.
Now is the time for Fonterra shareholders to act. Leaving it too late could take the co-op down the path taken by Westland Milk. That would be disastrous for all.
OPINION: Ministry for Primary Industries' situation outlook for primary industries report (SOPI) makes impressive reading.
Sheep and beef farmers Matt and Kristin Churchward say using artificial intelligence (AI) to spread fertiliser on their sprawling 630ha farm is a game changer for their business.
Commercial fruit and vegetable growers are being encouraged to cast their votes in the Horticulture New Zealand (HortNZ) board directors' election.
A unique discovery by a Palmerston North science company, Biolumic, looks set to revolutionise the value and potential of ryegrass and the secret is the application of ultraviolet (UV) light.
A New Zealand company is redefining the global collagen game by turning New Zealand sheepskin into a world-class health product.
With further extreme weather on the way, ANZ Bank is encouraging farmers and business owners impacted by the recent extreme weather and flooding to seek support if they need it.
OPINION: It's official, Fieldays 2025 clocked 110,000 visitors over the four days.
OPINION: The Federated Farmers rural advocacy hub at Fieldays has been touted as a great success.