meta Farmer anger over Fonterra profit :: The Bullvine - The Dairy Information You Want To Know When You Need It

Farmer anger over Fonterra profit


Swan Marsh dairy farmer, Brett Craig.

The profit was up 65 per cent, prompting Fonterra to raise its forecast milk payout for its New Zealand suppliers for the second time in a month.

Fonterra, a New Zealand owned cooperative, is the world’s largest dairy exporter and fourth largest dairy company, accounting for around 40 per cent of world trade.

But Victorian farmers slammed the annual result, and claims from a senior Fonterra executive the company had recently taken on another 200 million litres of milk.

Fonterra’s milk supply manager Matt Watt said the Australian business was returning to profit, and was well positioned to invest in the future.

“Our Australian business has been in turnaround for the last three years, and after two years of substantial losses, (the) ‘back in the black’ results have been largely underpinned by one-off divestments, operational improvements and overhead savings,” Mr Watt told farmers.

“The turnaround has been achieved by taking out significant costs, reducing our working capital and headcount, and divesting non-strategic assets including the loss-making yoghurt and dairy desserts business, our Bega shares, stake in Dairy Technical Services and, most recently, our Wagga Wagga route business.”

But Crossley dairy farmer Karrinjeet Singh-Mahil said what was most annoying were Fonterra’s claims it had no capacity to take existing suppliers’ milk.

“Here they are telling us they haven’t got places to put all our milk profitably, they have been struggling, but they can steal 200million litres of milk from Murray Goulburn,” Ms Singh-Mahil said.

“Fonterra was able to increase capacity it claimed it couldn’t take.”

“The whole thing stinks, when you look at the fact Fonterra New Zealand has made such an enormous profit.”

She said Fonterra made more money when the powder price was down, because it didn’t have to pay as much to its farmers.

“They knew they were going to make a profit, a nice big one – there was no justification to drive every dollar out of Australia to support their New Zealand shareholders,” she said.

“The Australian suppliers are just not important, we are a cost in their business, and they will squeeze every drop of blood out of us, to make them feel good.”

Swan Marsh dairy farmer Brett Craig said Fonterra did not appear to care about loyalty.

“The significant costs are us, they have taken our life savings to benefit them,” Mr Craig said.

“We are just pawns in their game.”

He questioned Mr Watt’s comments that Fonterra had “reshaped its Australian business, leaving no stone unturned and laying the foundation for a strong business that will be able to deliver sustainable returns for the long term.

“By making these difficult decisions last year, we’re now able to focus on our multi-hub strategy, which plays to our ingredients strengths in cheese, whey and nutritionals.”

Mr Watt said the changes complimented Fonterra’s consumer and food service businesses and brands and helped move milk up the value chain.

Mr Craig said Fonterra were charging interest on a loan, which he had not even received.

“Australians are not important, as part of the global business,” Mr Craig said.

Swan Marsh dairy farmer, Brett Craig.

“They kicked us in the back of the knees, as we were walking down the stairs.”

He questioned the loan, applied when Fonterra cut its farm gate price to an average of $4.75 kg/ms, in June.

“Fonterra took it out in one go, we lost 30pc of our income in two months – they offered us an interest free loan, but the interest free part was subsidised by all farmers,” Mr Craig said.

“They are removing it from our pay, they are not putting out statements and haven’t itemised it,” Mr Craig said.

Fonterra was taking two cents a litre kg/ms for a loan, he had not taken out.

“The more milk we sent, the more we are going to get charged.”

Source: Stock and Land


Send this to a friend