agribusiness
management
A compliance loan is being offered to help the balance of productivity and the environment . page 23
A ‘Ewe 2’ strategy appears to be working in for a Wairarapa couple. page 27
RuralNEWS
opinion Dairy industry feels stuck between a rock and a hard place.
page 27
to all farmers, for all farmers
www.ruralnews.co.nz
Tensions over soaring Fonterra share price sud es h k i ssu n sudeshk@ruralnews.co.nz
FONTERRA IS confident a raft of measures announced last week will ease farmer tensions over the soaring share price. The co-op has been under fire from some shareholders after its share price rose from a launch price of $5.50/share in November to $7.25/share. Young farmers planning to enter the industry and existing farmers wanting to lift their milk supply say they will struggle to stump up cash to buy additional shares and meet their share standard requirements. At last month’s Federated Farmers Dairy council meeting in Northland, delegates said some farmers were switching supply from Fonterra to other processors. Delegates described the high share price as untenable. Fonterra suppliers must own one share for every kgMS supplied to the co-op. Fonterra chairman John Wilson says this remains the co-op’s guiding principle. Wilson says he has empathy with farmers planning to grow milk supply. But he points out the share price is set by the market. He agrees for Fonterra to grow, it needs farmers to grow. But the share price is creating problems for young farmers; so is high price for cows and land, he says.
“Milk is the lifeblood of our cooperative and the five-point plan we have announced offers farmers more flexibility to buy shares to match production,” he told Rural News. The co-op last week announced a bonus issue of one additional share or unit for every 40 held in April this year.
It will also offer flexible contracts to give new and growing farmers more time and options to fully back their milk production with Fonterra shares. Wilson points out that under recent DIRA changes, independent processors can no longer get 250 million litres of milk from the co-op. So they will look
elsewhere, he says. “There will be lot of competition at the farmgate,” he says. Fonterra Shareholders Council chairman Ian Brown says the new measures will go “quite a long way” in addressing concerns about the share price.
Photo: Tony Hopkinson
REPOROA FARMER Kelvin Thomas was starting to feel the effects of the dry weather when Rural News visited him last week. “It’s the worst dry spell I’ve ever had in 25 years.” Thomas farms 176ha and is currently milking 500 cows – down from a peak of 550. He has been once-a-day milking for the last 10 days, when only two weeks prior he was milking every 16 hours. “The last few weeks there has been a dramatic change,” he says. “Eight weeks ago we were 35% above last season on a daily basis. Currently we are 5% behind.” More coverage on the growing drought around the country, pages 5-7.
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to page 3
Dry till mid-March? p e t er bur k e peterb@ruralnews.co.nz
DON’T EXPECT much rain until mid-March says Phillip Duncan of weatherwatch.co.nz. Duncan, who supplies specialist forecasts to a number of major clients, including Fonterra, believes droughts will be declared in many parts of the country, but thinks they will be relatively brief. “Our take on the weather hasn’t changed since the end of spring. We are still predicting March will be dry to start with but we’ll gradually see rainmakers coming into the forecast. “One thing farmers can be positive about is we don’t have anything driving this dry weather in particular. We’ve had a series of big highs over us. It’s not like we’ve got El Nino which is forcing this weather on us - we are just stuck in a rut and eventually it’ll give way and the rainmakers will come back.” Duncan says it would be right to declare droughts given the conditions that have prevailed for several months. “It has been a dry summer for the upper North Island. December might have been fairly cloudy and we certainly had a lot of drizzle around Christmas, but there wasn’t a lot of rain then. Some places such as Horowhenua and Kapiti have caught some rain, but the rain has missed the rest of us.” According to Duncan, the most likely date for the country to get rain is March 11 or 12.
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march 5, 2013: Issue 533