But Shane is right.
We should be demanding more from Fonterra.
What we as New Zealanders often forget whenever Fonterra is mentioned, is that we have domestically structured our market for a monopoly to maximise our International trade power.
No problem with that, but the lack of competition means we pay the international prices for produce grown in our own country.
If you add the enormous amount of fresh water Big Dairy steals and pollutes while generating huge climate change emissions, getting stiffed on the price as well adds insult to injury.
What are NZers getting from allowing Fonterra to remain a monopoly?
Surely progress can’t mean not being able to afford the food your own country produces?
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Remember Fonterra is essentially a co-operative. Non farmer shareholders have no voting rights as I understand it. So the shareholder co-op member farmers decide how much revenue is directed to showing a profit generating a dividend, and how much revenue is paid out to farmer co-op members. Not surprising that after a lean period on the farm the pay-out to farmers gets the priority to keep the producers viable. I doubt very much that a low profit margin necessarily reflects the poor performance Jones accuses F Management of is demonstrated at all.
Good luck with dividing the co-op up Martyn. I don’t know how you would go about that. There are other players out there but your getting into a very authoritarian concept if you are going to direct who each farmer supplies.
D J S
Who are the first ones to put out their hands when there is a environmental disaster or disease outbreak ?
I think Shane is right about Fonterra, as he was about Air NZ. Not long ago the price of 500gm of butter was about $3.50; now its over $7. That is indefensible. So far as I know only 4% of total dairy production is sold locally. The rest is exported. Even if butter were sold locally at $3.50 again the loss to the farmers would be miniscule and the gain in PR would be enormous. So why not?
Why would any Fonterra competitor sell to the local market for less than they can achieve from export, any more than Fonterra would?
Its not the structure of Fonterra that drives the local price of dairy products to the international price, its the fact that NZ consumes less than 5% of all the milk we produce…
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