Saturday, March 2, 2024

Fonterra bobby calf decision about managing market risk

Avatar photo
Farmers also questioned the board on the pace of regulation being pushed onto the sector and its social impact.
Fonterra chief executive Miles Hurrell and chairman Peter McBride take a question from a farmer during the co-operative’s annual meeting in Rotorua.
Reading Time: 2 minutes

Fonterra’s decision to ensure all non-replacement calves enter a value stream by June next year was about managing risk, its directors told farmers at the co-operative’s annual meeting in Rotorua.

The move effectively banned on-farm euthanasia of calves without humane reasons, to make sure every calf born is accounted for.

The value streams are dairy-beef finishing, bobby calf collection for veal production and the petfood industry.

The board was challenged on the decision and whether farmers were consulted during the process during the meeting’s general business.

The farmer told directors the change of policy was fine if farmers lived near a petfood factory, but others had limited space to house and feed these calves. 

“We already rear close to 800 calves but what are we going to do with the early [born] ones? When you made this grand decision, what did you think we were going to do with these calves?

“I want to know how you reached that decision. Did it go through the shareholders’ council? Did they say, ‘hey that’s a grand idea?’ “

Chairman Peter McBride told her it was a two-year process and farmers were consulted.

“It’s a complex issue, but at its heart is our public licence to operate.”

Waikato farmer Stuart King said he was concerned that it seemed to be taken for granted that farmers can just keep producing milk regardless of new regulations reducing the tools in the toolbox available to farmers.

“As a farmer I have a real concern about burnout and declining milk supply.”

McBride told him they were fully aligned with him on that and empathised with him, and that the co-operative was losing 1% of dairy land to land use change per year.

“We can’t control that and when we talk about declining milk, it’s about facing realities. It’s not about ambition. Our ambition is to maintain and potentially increase productivity through technology and we are challenged by that, but we also have to be realistic about what’s coming at us.”

Fonterra would also fail if it did hot have a consumer orientation and customer focus, he said.

“It’s tough, it’s hard to adapt and I think about that on my own farm, what am I going to do differently?

“Right now, it feels like there’s a lag of tools in the toolbox to meet the targets and that’s why DairyNZ are incredibly focused on a research levy to help develop the tools to mitigate solutions.”

Taranaki farmer and former MP Shane Ardern said the industry had a major issue with young farmer burnout due in part to administration duplication as they tried to remain compliant. He believed Fonterra could play more of a leadership role in this space.

McBride told him it was not just young farmers struggling – but older farmers as well – as they struggle to keep on top of this.

People are also reading