Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
But two farmer resolutions on the council’s future role as a shareholder watchdog are opposed by Fonterra’s board and the council. The board is asking farmers to vote against both proposals.
The two resolutions, to be voted at the co-op’s annual meeting in Invercargill next month, were filed separately: one by Lumsden farmer Tony Paterson and another by Waikato farmers led by Trevor Simpson, Jim Cotman, Mark Peters and Malcolm Lumsden.
Paterson’s resolution calls for an independent review of the council immediately after the AGM on November 7.
The Waikato farmers want a change in the way the council monitors the co-op’s performance. They want a performance committee of councillors and independent experts who would report twice yearly to all shareholders.
Fonterra’s board and the council are opposing both resolutions, on the grounds that the council has already announced an internal review.
But the Fonterra farmers point out that the council only announced its review after the two resolutions were filed before the deadline for AGM remits.
Simpson says his group supports Paterson’s resolution calling for an independent review: he isn’t surprised by the board’s and council’s stance on their resolution.
“Our position is that we don’t want just any review – we want an independent review. At the end of the day the council’s internal review falls short of what shareholders want,” he told Rural News.
“The difference is that the council wants to hold another internal review and shareholders want an independent review.”
Paterson said farmer response to his remit has been “very positive”.
He’s happy for farmers to support both resolutions.
“I don’t know why the board and council fear an independent review. Let the shareholders decide what they want.”
Simpson says their resolution was drawn up after consultation with farmers in Waikato. The group also met Fonterra chairman John Monaghan two months ago to give him a heads-up on their resolution.
He says some farmer shareholders believe the council has failed to perform its duty as a “watchdog” for shareholders.
“No business can audit itself. Shareholders no longer want Fonterra directors, staff or their own shareholders telling them about Fonterra’s performance.
“Such information, with the best will, is received with a degree of scepticism. The time has arrived for us to mature sufficiently to want to hear the view on Fonterra’s performance from outside our ranks: in other words, some good ongoing independent analysis and informed views on the performance.”
Simpson is urging farmers to support both resolutions and send a clear signal to the board and council that farmers want things to change in the performance monitoring of their co-op.
