Fonterra’s latest proposal for company governance has done little more than re-arrange the deck chairs from last month’s controversial proposal, which I have written about previously.
Some things are now more explicit. This includes that it will be two farmer-director positions that will go. I see this reduction in director positions as being the Trojan horse. Continue reading
In New Zealand, we have yet to come to terms with the reality that the future of our dairy industry is highly dependent on China.
America does not need us. Europe does not need us. The oil producing countries can no longer afford us. Africa has never been able to afford us.
So it is all about Asia. Continue reading
Recently I have been working in Vietnam with colleagues from Hue University. After an absence of some eight years, it has been fascinating to see the changes that have occurred, both physical and attitudinal.
There are many ‘Vietnams’. But the Vietnam that I know is the Central North Coastal region, comprising five provinces, with Hue, the old imperial capital, now the regional centre.
The Legacy of War
To many Western minds, Hue is still associated with the famous Tet offensive of 1968. This is where the American attempt to dominate Vietnam was lost. Continue reading
Late last year, Fonterra’s farmers rattled the cage by voting for a change in governance rules. However, the voting majority was insufficient to change the rules. Fonterra’s Board has now responded with its own proposals for new governance structures.
To me, the new proposals look like a continuing meander towards corporatisation, without recognition of the special features of a huge co-operative conglomerate like Fonterra. Continue reading
The EU has now released dairy production statistics for February 2016 and from a New Zealand perspective the news is all bad. Daily milk production has increased 6.5% from January to February. Some increase was expected – February is always higher than January on a daily basis – but the extent of the increase is a surprise.
The combined January and February production is up 7.4% from last year, and February production, once adjusted for the leap year, is up almost 10% on a daily basis from January last year.
There are some glimmers of hope in other parts of the world, and I will come to that later in this article. First, more about Europe. Continue reading
In recent weeks, the news media has been reporting wildly opposing views on short term dairy prices.
ASB’s Nathan Penny has been predicting a 2016/17 payment that will start with a ‘6’. In contrast, Westland’s Chair Matt O’Regan and CEO Rod Quinn are saying that they see ongoing gloom for up to two years. Rabobank see improvement but not until 2017. And Fonterra’s John Wilson has almost apologised for past failures with his acknowledgement that predicting prices is indeed difficult. Continue reading
In a recent article, I wrote that there are four big questions for New Zealand to consider when assessing its future positioning as a dairy producing country. On the supply side, those big questions relate to competition from the EU and the USA.
In the immediate future, our key competition on global markets will come from the EU. I have already written about that. But in the longer term, the potential power of the United States as a major exporter cannot be ignored. And so it is on the United States that I will focus here.
The US has about four times as many dairy farmers as New Zealand, and produces about four times as much milksolids. So that suggests that the average American farm is of about the same size as in New Zealand. Continue reading