Editorial: Sensible move
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.
Dairy industry leader Andrew Hoggard supports the idea of opening Fonterra shares to overseas milk suppliers – but not townies.
Hoggard says he would be more comfortable sharing Fonterra’s spoils with farmers in Chile and Australia than with investors in Auckland.
Fonterra is not ruling out offering shares to overseas milk suppliers, as its overseas milk pool grows; of the 23 billion L of milk processed by Fonterra last year, New Zealand farmers supplied 17.5b L. The rest is collected and processed in Australia, South America, China, Sri Lanka and Europe.
Fonterra chairman John Wilson recently told a NZ Co-op business leaders’ forum that overseas milk suppliers could be allowed to own shares in the co-op.
Wilson did not rule out a co-op linkage with farmer suppliers in other countries. “The opportunity to form some sort of cooperative linkage we certainly believe is possible,” he says. “It won’t be easy – surprise, surprise – but it is possible. Those opportunities are becoming more real today than in the past.”
Hoggard points to the Dutch co-op Arla, which has expanded and is now owned by 12,500 farmers in seven countries in Northern Europe. He believes it would be a “just way” of keeping farmers involved with the co-op and as shareholders they would be loyal.
This would allow all farmer suppliers to share in each other’s pain and gain, Hoggard says.
“At our low point in payout there were high payouts for suppliers in Australia and Chile – eroding our profits, as it were. If those guys share in our pain and gain… they’re farmers like us and we have a lot in common. I’m more comfortable with farmers in Chile and Australia than with investors in Auckland.”
However, expanding ownership beyond NZ would be complicated. It would require strong support from Fonterra shareholders in NZ.
Hoggard believes milk price would be an issue. “We [would] have to calculate separate milk prices for those countries…. Each country could have individual milk price manuals.”
He says the issue of expanding the shareholder base should have been discussed during the trading among farmers (TAF) debate five years ago. Under TAF, investors can buy units; unit holders receive only economic rights to shares held in the Fonterra shareholders fund.
Speaking at the forum, Fonterra director Nicola Shadbolt said there was an appetite among overseas suppliers to own Fonterra shares, but capital could be an issue.
In her travels around the world she is often asked by farmer suppliers about the possibility of owning Fonterra shares. “The ‘belonging’ is the bit they are missing,” she says. But this also means coughing up $880,000, so there’s “a slight cost” involved.
“But if there are other ways of structuring that, the belonging can still happen at no capital cost.... Some co-ops in the Netherlands have class A and class B members. Class B members don’t have all the rights of class A members, so there are ways, but this is an evolving issue.”
Shadbolt says Fonterra needs more milk to grow the business.
“As demand for dairy grows, we need to have stickability with dairy farmers in other parts of the world. We don’t want not to have the milk.”
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.
Holstein Friesian excellence was front and centre at the 2025 Holstein Friesian NZ (HFNZ) Awards, held recently in Invercargill.
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.
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…