Fonterra ‘failing its shareholders’
Congratulations to Fonterra for wanting its staff to connect to its roots in the Waikato. Let’s hope that Fonterra does the same, simply by sticking to its knitting of adding value to all milk and getting better prices, rather than building empires in China, USA and South America.
The worst thing about what it has done and is doing, is that it is teaching those countries our lowcost dairying, which is New Zealand’s production advantage, which I thought everyone knew, so would not give away at the expense of our farmers. They are teaching China low-cost farming after which China will refuse to pay us more for ours.
Producing pasture in New Zealand is now 30 cents per kilogram of dry matter, seven cents for the pasture growing cost and 23 cents for the value of land. Chinese grazing land costs a small fraction of ours, so they will look just at the seven cents.
If Fonterra had done research it would have found out that doing safe and successful business in China is difficult. Since Fonterra started, it has borrowed about $5 billion ($476,000 per farmer), and what does it have to show for it in higher milk payouts to its shareholder/producers? Nothing, but half of it lost – $238,000 per farmer gone forever.
Fonterra shares have dropped in value from $7 to $4.52 causing the average dairy farmer to lose $250,000, making their total loss close to half a million dollars each.
Add to the above, Fonterra allowing auction bidders to set the price of the world’s best sunshine and pasture-fed milk, containing five times more unsaturated fat (conjugated linoleic acid) than northern hemisphere milk from housed cows not fed pasture. CLA helps the heart and helps achieve weight loss. Evidence and more information are in the dairy farmers ebook tipson.info. Read Human Health in vaughanjones.info and see a list of all the vitamins and minerals in milk and other health benefits from naturally grown New Zealand heavy metal-free foods, especially organic fruit and vegetables.
In 1960 the milk payout here was $14 equivalent calculated by the fact that a cow cost $20 and now is $2000 (100 times more). In 50 years our farmers have doubled milk production per cow and doubled pasture yield per hectare and increased the number of cows milked per person from 60 to 300. What more can our farmers do to survive? No other industry can match this.
Draw a graph and it shows that in another 50 years farmers will have to pay Fonterra to come and