The announcement that farmers have taken up about 1/3 of their entitlement to additional shares in their cooperative company is a good result given the circumstances. The levels of debt driven by hyped expectations of milk prices and banks throwing money at dairy farmers means many were never in a position to take up the 20% allocation. Some could say it has been planned this way so that the inevitable call for further outside capital will lead to the listing of Fonterra on the NZX. For investors and naive money traders this may seem like progress but for farmers it will lead to less money for milk and more for share dividends. This is all basic commercial opportunism and the board of Fonterra should be made to answer some hard questions before they are handed a mandate to move further forward on any capital restructure of New Zealand’s only fully owned multinational company.
To get hold of the rivers of white gold is the last great bonaza left in NZ for the multinationals. Along with the international dividends with the chance to make it all tax free would have them trembling at the lips in London, Zurich, New York .
I couldn’t agree more.
ye gods, pity the cows
these rivers of gold are sucked out of enslaved living beings,
as david slack was heard to say ‘ this really should become a sunset industry in nz….’
I disagree with the general thrust of your post, but this in particular is a woefully inaccurate statement…
The levels of debt driven by hyped expectations of milk prices and banks throwing money at dairy farmers
There has been a lot of extra debt taken on by farmers in recent years, but it’s got very little to do with ‘hyped’ milk prices, and a great deal more to do with poor returns from other farm-types (especially sheep/lamb meat exporters).
The returns from Dairy, in comparison, looked attractive well before the spike in prices. The vast majority of analysts involved in the industry, especially the banks, recognised that prices wouldn’t stay that high and have managed their risks very well in this respect.
Incidentally, Fonterra did very well out of the price boom in part because it has people on staff that know how banking works, and locked in good prices at the right times while leaving open/speculative positions at other times.
Foreigners want Fonterra, and there are people in this country who want to give it to them.
Any move to open Fonterra up to outside capital will destroy our dairy farming industry and render farmers serfs to multinationals.
The strength of our agricultural sector is in the fact that almost every aspect of it is co-operatively owned (I note that the simlar moves to open up the other parts of agriculture has had an adverse effect, ie beef and wool).
Other methods, wether it be forced nationalisation and collectivisation, or leaving farming at the mercy of big business, have failed miserably.
…be another kick in the goolies for our economy. And another step down the road to serfdom.