29,200 copies distributed monthly – to every rural mailbox in Canterbury and the West Coast.
December 2014
INSIDE Fonterra entices new farmers to co-op Page 3
Farm quad bikes in the spotlight Page 8
Spreading the sustainable message
Page 10
A life time of dairying
CONTACT US Canterbury Farming 03 347 2314
by Kent Caddick
Canterbury dairy farmers will be at the forefront of Fonterra’s new milk sourcing subsidiary aimed at growing the company’s market share in New Zealand. Called ‘mymilk’, it will initially invite applications, from farms in the Canterbury, Otago and Southland regions which are not currently supplying Fonterra, for one year contracts, renewable for a maximum of five years, without the obligation to purchase Fonterra shares. At any time mymilk suppliers can apply to join the co-operative, purchase shares and supply Fonterra directly. Fonterra chairman John Wilson said there are farmers who support the co-operative model, but are at the stage of development where sharing up is currently beyond their financial reach. “Providing a different pathway of supply to farms not currently supplying Fonterra enables farmers to ultimately weigh in behind the co-operative model.” Mr Wilson said it was important in an increasingly competitive milk sourcing environment that farmers could support Fonterra and then apply to become shareholders in the wholly owned New Zealand Cooperative in time. “It is also important that we protect the future of our industry and allow farmers to grow. We do not want a fragmented industry, as this would not be good for New Zealand dairy farmers and not good for the country.”
Selwyn dairy giant Synlait Milk said it is not concerned about Fonterra’s new venture. “We don’t see this as impacting our future growth plans ,” Synlait managing director Dr John Penno said. “Competition in the raw milk market has always been part of the landscape, which is good for New Zealand dairy farmers. “Since our operations began we’ve grown our milk supply volume by an average of 30% year on year in the face of various competitive pressures.” Fonterra CEO Theo Spierings said Fonterra had the ability to reach millions of consumers and customers around the world through its broad product portfolio spanning ingredients, consumer and foodservice. “We have a clear ambition to be a globally relevant Coop, generating the highest sustainable returns at the farm gate, topped with profits from our consumer and foodservice businesses in strategic markets. Milk growth is fundamental to that. “Mymilk sends a signal to our current and potential competitors that we really value the milk from New Zealand farmers and we are out to secure it.” Mr Spierings said contract prices paid by mymilk would be competitive, but they wouldn’t be more than the Farmgate
Fonterra CEO Theo Spierings says the company’s new venture will not adversely affect current co-op members
Milk Price paid to Fonterra shareholders. He said mymilk would deliver value to existing Fonterra shareholders in five ways: increase volumes of milk to support Fonterra’s global ambition; help improve asset and supply chain utilisation; achieve transport efficiencies by targeting milk near factories; provide incremental milk for capacity investments and attract potential new shareholders for the future. “Ultimately mymilk will return profit to the cooperative’s existing farmer shareholders through capturing these benefits,” Mr Spierings said.
Synlait managing director Dr John Penno is not concerned about Fonterra’s efforts to court dairy farmers to its co-op
StructureWise
Limited
DESIGN & CONSTRUCTION
You may not want to hang a tractor from your shed, but it would be nice to know you can! TM
• • • •
Commercial, rural or storage buildings From design to completion or supplied (Kitset) Steel, timber or concrete materials Sustainable materials, made in NZ
Station Street, Leeston / www.structurewise.co.nz / Ph 03 324 3392