Thursday, July 7, 2022

My Daily Digest: May 6, 2021

Fonterra puts ball in farmers’ court Fonterra farmers are being tasked with a monumental decision as the co-operative looks to make big changes to its capital structure. The board of directors wants to give farmers more flexibility and make it easier for new suppliers to share up.

It’s recommending that farmers should only need one share for every four kilogram of milksolids supplied, rather than the one-to-one ratio that’s required at the moment.

It also thinks the shareholders fund should either be capped or scrapped.

Fonterra’s last big capital rethink came at a time when milk supply was growing, but competition and regulation will mean a static or shrinking pool in the future.

So the board wants to tailor things to fit this new reality.

No doubt there’ll be a lot of discussion between farmers about the best way forward for their co-operative.

The good thing here is that farmers will be firmly in control of their own destiny.


Bryan Gibson


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