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Labour attacks Fonterra and CEO Theo Spierings in Parliament; calls on Key to denounce CEO; Key distances Govt from Spierings; reassures again on 'medium term outlook' for dairy; English says farmers shouldn't wait for price rebound

Labour attacks Fonterra and CEO Theo Spierings in Parliament; calls on Key to denounce CEO; Key distances Govt from Spierings; reassures again on 'medium term outlook' for dairy; English says farmers shouldn't wait for price rebound

By Bernard Hickey

Fonterra and its Chief Executive Theo Spierings came under sustained attack in Parliament today from the Opposition Labour Party, who questioned the dairy giant's forecasting abilities and its refusal to talk publicly about lengthening payment terms for contractors.

Labour Finance Spokesman Grant Robertson called on Prime Minister John Key in a Parliamentary question (see video above) to say whether farmers should be satisfied with the performance of Spierings.

"I don't have any responsibility for the performance of Theo Spierings, any more than he has responsibility for the performance of Andrew Little," Key said.

Robertson pressed Key again for a view on Spierings' and Fonterra's performance, given it had changed its payout forecast three times in seven weeks, had increased its debt gearing of 49% and was demanding 90 day terms from suppliers to improve its working capital position.

"It's not my responsibility for whether Theo Spierings is doing a good job or not," Key replied.

Earler Robertson asked why Key had commented in November 2014 that dairy prices would bottom out soon, given he had been told earlier that year that some (including Goldman Sachs) saw a five year milk glut. Key said in reply to Robertson: "How did the member get it so wrong when he thought he'd be the leader twice and lost."

Forced to answer the question again, Key said: "I remain of the view that the long term outlook and the medium term outlook for dairy is very strong, but it's always been possible not to count and get your numbers wrong from time to time."

"You've got a global opportunity out there emerging in Asia and the changing markets," Key said, adding Labour should support the dairy sector by supporting the Trans-Pacific Partnership and Resource Management Act reform.

However, Finance Minister Bill English said in answer to a later question that farmers should not rely on a rebound in prices for their survival.

"Farms with high levels of debt and high production costs will come under real pressure, whereas six months ago they may have thought they could hold on until prices bounced back up, that looks much less likely now," English said.

"So it's appropriate that the dairy industry is thinking about reducing production costs, adjusting to capital scarcity, rather than waiting for prices to rise," he said.

English denied an allegation from Green Co-Leader Metiria Turei that the Government had previously encouraged farmers to increase production and their debts.

Bill English was more cautious about outlook for prices and has previously warned that a return to the days of NZ$8/kg payouts was unlikely. He earlier told Morning Report that some farm values would have to be reset.

"This is an industry where they've had a focus on growing equity and growing land values for quite a long time now. It's going to be a significant adjustment to getting back to the core business of effective farming for cash flow," English said.

"They are going to see land values drop. That is pretty much certain," he said.

"Between the industry and the banks they'll be able to find their way through it," he said, adding he ruled out any Government loan guarantees or direct assistance, other than through rural support trusts.

'Minister wants Fonterra to deal fairly with suppliers'

Later, Small Business Minister Craig Foss said that although Fonterra may be meeting its legislative commitments, "it is my expectation that Fonterra and all New Zealand’s large businesses deal reasonably and fairly with New Zealand small businesses."

He repeated that Fonterra would be judged in the court of public opinion on its behaviour.

"I do note that companies in New Zealand—Kiwi businesses, large companies—I am sure, value their reputation as fair and reasonable Kiwi businesses. The court of public opinion will, I am sure, judge those businesses on their behaviour in the market," Foss said.

Earlier, Labour Primary Industries spokesman Damien O'Connor said it was time Fonterra spoke publicly about the slump in dairy prices and the worsening of its payment terms with suppliers.

'Fortress Fonterra' neglecting its duties'

The refusal of Fonterra to speak to media over the last two days about the slump in the milk price and overdue payment to contractors was outrageous, Labour’s Primary Industries spokesperson Damien O’Connor says. Fonterra has admitted itself in the past to being 'Fortress Fonterra' when dealing with public interest in its actions over a botulism scare. See our October 2013 article here.

“Whether you’re a farmer under financial pressure, a contractor concerned about payments or a local rural community leader or a diary consumer, decisions made by Fonterra have far reaching implications for us all," O'Connor said.

“Fonterra is spending millions of dollars on public relations and corporate communications but its refusal to respond to queries in the last two days is an absolute failure and dereliction of its basic industry responsibilities,” he said.

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A protection racket of the worst kind - akin to corruption

In spite of the bluster - Fonterra is a sacred cow - it is being protected at the very top

John Key says it's OK to "misuse market power", "unconscionable conduct", not "illegal", so carry on

Coded message 1. all dominant market players are now untouchable - we'll protect you
Coded message 2. commerce commission - keep your nose out

Demanding of suppliers price reductions, discounts, and deviating from standard commercial practice

Meanwhile over in Australia
Coles and Woolworths spent much of 2014 defending their behaviour in court. The Australian Competition and Consumer Commission (ACCC) brought several actions against one or both of them throughout the year for misleading consumers and bullying suppliers.

In the 1990s, Woolworths was accused of bullying conduct against bread suppliers and the ACCC successfully prosecuted it for misusing its market power and obtained substantial penalties. Victims received no compensation, and the case took nine years to resolve. The ACCC’s unconscionability action against Coles was clearly far more effective for the small suppliers involved.

10 December 2015
The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against Woolworths Limited, alleging it engaged in unconscionable conduct in dealings with a large number of its supermarket suppliers, in contravention of the Australian Consumer Law.

courts to order the break-up of companies that misuse their market power ... and so on

Is this another monumental cock-up by Fonterra coming up

Bear in mind Fonterra-Bonlac has significant parallel operations in Australia

According to John Key the announced steps by Fonterra demanding price-cuts by service-providers and contractors and unilateral delays to payment terms are not illegal in NZ

Well they are illegal in Australia

If Fonterra tries this stunt in Australia they could possibly have ACCC going through them with a vengeance - that'll be another unwelcome PR disaster

If Fonterra does not try this stunt in Australia it will mean they are treating NZ service-providers differently to their Australian brethren and are trying to stem the red-ink by screwing NZ operators

Well done Fonterra - have you thought it through


The export goal

The goal is to double primary industry exports in real terms from $32 billion in June 2012 to over $64 billion by 2025. Learn more about how we plan to achieve this. Read more

So, if a few simpletons bought into that dream, they are on their own now

MPI states"To achieve this, New Zealand's primary industries must grow at a rate of 5.5% per annum through to 2025." - have they provided advice to the Government on how legislation needs to change to support this? Have they informed the Government the lack of reductions of tariffs on NZ good before 2030 will essentially kick this goal into touch? More evidence of just how little power the Government has to impact this sector.

Lengthening payment terms for contractors is the canary gasping, indicating there is a cash flow issue at base camp.
Its hard to say with a straight face that National didn't cheer lead the expansion.

... and also cut dairy some big time slack

Watch National distance themselves from dairy, Fonterra and Spering.

Where does this leave NZ - well we will always have housing construction in AKL. Trouble is that has also been cheer leaded by National especially with its hands off immigration polices.

Anyone notice that housing loans fell "more than expected" in Oz today?

how can the distance themselves without going away from their history
national party is the political party of the farmers led by the farmers federation


This is going to be very interesting - apart from a few city-centric blue-bloods, the mainstay of the National Party support-base has always been the rural sector

Dairy cow prices have gone from highs of $2200 when there was a record payout to half that value and it is eating into sharemilker equity.

Buyers looking to buy cows/heifers are holding off to see where the price settles. No one wants to take on debt to buy cows only to find the price crashes later and stays low. The positive for those selling is that currently works price will keep buyers prices up around $1000.

All bets are off on the Chinese dairy market
Milk products are becoming a luxury for the vast majority of Chinese consumers


In a country borrowing 1.7 billion a week against housing,who is going to pay the interest?

Don't forget that Fonterra also set up dairy farms in China. Fonterra will eventually be forced into an untenable situation that makes them surrender any ownership they have there and eventually they'll be able to supply themselves.


This is not a one guy did it type of situation. Even then more finance dept.

Think of industry policy, look at some of the Acts of Parliament.
Look at enablers..
Sure ag credit is important, but who would have thought banks would lend beyond their own prudential LVR of 50%.
Or get caught with averages (in loan servicing using an average milk price of $5.50 to $6.00.)
Its not like bank loan structures required a borrower to maintain cash or near cash reserves for below average years (Its like they said average milk price/kg, but it actually works more like a minimum or there abouts).
Service providers making us buy retail (or charging cost + + + cpi) while we sell wholesale.
Trade deals that do not secure volume. Meaning buyers pick and choose once installed capacity inplace..

We have a working capital issue in order to transition back to budget of 15 to 20 years ago (and speed of that not assisted by to payout forecasting etc).
There is a financial structure issue for highly geared, as the debt does not flex to the now operating environment.

We don't see off shore investors saving the highly geared. Even the institutions that want to invest, many seem to wish 5% cash return year on year with capital gain over a period of say same again. You can see the implied buy in price...


Service providers making us buy retail (or charging cost + + + cpi) while we sell wholesale.

Yes, an unchecked NZ culture of stealing from the locals.

Witness the retail price gap between Australia and New Zealand for a similar ordinary kitchen appliance here and here

apples with apples. One is 1.7l and the other is 1.8l, oh, hang on, the smaller one is more expensive....

No an un-checked Western culture of stealing from locals. Nz is so small that the market can be controlled by the International Corporations, but yes also the NZ wholesalers, I see it all the time.

So here is this weekends who done it puzzle to solve.

Good puzzle, Henry. Worth solving whodunnit, but it's going to take a revolution to get the guilty out of the way, and have better thinking move into the space.

But there's hope: As Alison Dewes says in your link: "Currently, the idea is that more production is the best strategy for a higher national GDP. But volatile economic and environmental conditions in the future will force agriculture into a paradigm shift where output and debt are replaced by increasing profit and well-being. A shift towards "systems" thinking and away from single production orientated goals is needed."

There's a generation of discredited thinking (is it, or has it been, thinking?) to get out of the way, and a lot of pain to come, I fear, before this new attitude of realism takes hold.


""It's not my responsibility for whether Theo Spierings is doing a good job or not," Key replied."
I don't think Key has taken responsibility for anything in the last 10 years. Yet, he and Joyce etc were more than happy to take credit for the dairy boom 3 years ago . Remember the "dairy's doing well " answer to just about any question?


You have to love question time ah... How grown adults can behave in such a consistently juvenile manner and yet still expect respect from the wider public, I have no idea.

Metiria Turei: Did the Minister then make a mistake in his answer to questions last year when he told my colleague Catherine Delahunty that he stood by Landcorp’s initial plans for large-scale dairy conversions, given his Government’s plan to see the dairy industry double by 2025?

Hon TODD McCLAY: From memory, that was not exactly my answer, but I certainly stand behind Landcorp and the Landcorp board—as far as its business decisions are concerned. It was correct that about a year ago the Government asked it to look at all of its business models, including the appropriateness of investment when it came to Wairākei. I would note that it is absolutely its decision to make. I welcome this decision, just as other decisions when it comes to dealing with the financial performance of Landcorp.


That's why they get paid the big bucks Aj, because they can obfuscate, deny, dodge and weave. In fairness to McLay at least his answers are generally civil even if indecipherable. Most of the rest of them revert to abuse in short order;

Mr SPEAKER: Order! Bring the question to a conclusion.

Rt Hon Winston Peters: —for the select committee, that “there is no rail north of Kauri”?

Rt Hon JOHN KEY: Because we are correct, in the same way that that member tells his caucus he loves them and knows who they are, but could probably not answer what their names are.

WTF? We pay them to churn out this rubbish!

How are you getting on with those lambs, are you still a SFF supplier. Bloody dry in HB I have some trees looking sick and they are fairly old same looking over the neighbours. Friends tell me two weeks from action due to dry, they will probably stall for another week or two though, like we all do.

Been a good summer down here but getting dry again now. Lambs are doing well but prices absolute rubbish ($4.50kg). No longer supply SFF given I was not a fan of the whole Shanghai Maling sellout and am now with Alliance, warts and all. Hopefully we all get some autumn rains soon....

OCD drops this season payout to $3.55. Reliable source said suppliers were informed today.

Buckley said Fonterra's revised forecast left him with a 30 cent profit for every kilogram of milksolids produced - a figure he then shared with his sharemilker.

"Basically I'm left with 15 cents to cover our cost of living etcetera which obviously isn't much."

Webster said the dairy downturn could force a shakeup of Fonterra's top executives.

Adding to farmers' woes was a perceived disconnect between Fonterra and those on the farm.

"You have farmers who are genuinely hurting and you have Fonterra moving into a flash new building in downturn Auckland and their boss Theo Spierings​ being offered an 18 per cent pay increase."

bummer, in one that supplys OCD we had no debt until this year but now that will be below our costs

Can we do something about the costs? Costs going up at %8 compounding for years, was always going to be a problem one day, why not make that day today and deal with them?

Wow CO, $3.55kg that's unbelievable. For all the criticism Fonterra is receiving it gets lost that for the fully shared up farmer is also getting the dividend and access to the 50c/kg interest free loan. Its tallest dwarf stuff but I am yet to see anything that suggests the co op model is not the best option.

That said the 90 day payment thing is a bit on the nose. Alliance group mooted a 60 day payment system down here this year and got heavy backlash from farmer shareholders who felt it was just not fair on the local business community. Generally farmers take great pride in paying their accounts on the 20th of the month and it didn't sit well.

round is square listen to me you will all be fine, smile wave
Rt Hon JOHN KEY: The member is actually misrepresenting the Reserve Bank. He says that if that was the payout—under $4, and I would point out that, actually, the total payout is still predicted to be above that, at $4.35—those loans would be non-performing. That is quite a lot different from defaulting.

our of the mouth of a baby politician though he was helping big brother with a smart retort, maybe he should stick to Epsom problems
David Seymour: Does the Minister agree with the following quote from the valedictory speech of outgoing Green MP Russel Norman: “Let’s just say it—we have too many cows.”?


Fonterra has had the run of MBIE, MPI, MFAT and their predecessors for years. New Zealand's foreign relations and numerous other government activities have been primarily centred on serving the dairy industry. The value of our non-permanent seat on the UN Security Council was loudly trumpeted by John Key as a marketing opportunity.

It has been a mutual admiration society cheered on by industry leaders, the banks and others, based on a fantasy of ever-growing, practically unlimited supply to China (New Zealand even has an agreement for defence engagement with China as a result).

And the outcomes? Farm values are now wildly unrelated to income generation, as capital gain became a favoured banking-farmer wealth creation strategy. Fonterra has been shown to be little more than a distributor, a cork in the waves of global tides. And China - to everyone's surprise - is concerned with its own internal affairs and geopolitical objectives.

Sure, the government is complicit in this fiasco. But the banks, Fonterra and farmers are supposedly competent adults taking informed business decisions. As with Solid Energy, so Fonterra. Spierings and his vast numbers of highly paid professionals have been assumed to know what they're talking about. The banks too have had their own bone-spinners predicting a prosperous dairy-led and Chinese-centred future. It might well be thought that China's leaders have played the government for fools, but this is a rats' nest of combined political, business and banking incompetence.

The industry, the bankers, together with their compliant civil servants and advisers, have been utterly discredited. And their idiocies will cost the country dearly.

Southland rural banker told a mate that they have dairy clients taking 200k in drawings and that the big/multiple farm owners think they are touchable due to how much money they owe. They obviously haven't heard of the Crafars. Anyone in dairy industry who expects to be able to still take 200k in drawings in times like these, deserves everything coming to them.

Perhaps the most worrisome comment was that the rural manager hopes that Fonterra has hedged really high so that can save his clients next year!

Oh wow cas ob, thats unlikely to engender empathy. Can we safely bet those farms would be working with an overworked skeleton crew? Hedged really high? Um ok....good luck with that eh. Some of the farms around here are lookjng pretty sad. Just some. Fert wise, must only be putting on N. This country needs everything with a capital E. Anything less and you are punished severely. It may not pug and we dont really know what mud is. But she sure sucks up fert like theres no tomorrow. You put a mob of vaccuum cleaner cows on a hillside then get 2 weeks of no rain....well you may as well just phone the grain truck. Except there is no grain truck now....bad recipe.

I believe it. And its that way of thinking that will be their undoing. Dairy farmers seem to be consumed with their own self importance and an unrealistic level of certainty that a) the banks will not roll them and b) the Government will step in to bail them if required.
Just yesterday I was telling one that I didn't think the Govt would be there for them this time. The reply? " They will be, Federated farmers just haven't told them yet" .

How over confident is that?

WoQS - I thought twice before I posted my comment as most of the commentators on here tar all dairy farmers with the same brush which I don't have a lot of tolerance for. However my comment was intended to be more about the attitude of the rural manager.

Yes there are some dairy farmers who are full of their own importance but they are not the majority . I have encountered the attitudes you describe in equal numbers between some 'old' dairy families and also some 'old' sheep farming families who have converted. But you get that in any diverse sector.

There are approx 10800 dairy farms and on them there are approx 4500 sharemilkers - not so sure how many of them there will be after 1 June. Then you add in contract milkers and there are a significant number of young farming families who are also 'farmers' with businesses who are not farm owners. So please don't tar all farmers with the same brush. ;-) I know a lot of young farming families are budgeting on drawings of $30k or less.

As to the govt bailing the industry out - IMO they would rather see Fonterra broken up and sold. Anyone who believes Fed Farmers has that sort of sway has their heads firmly in the sand.


Listening to the above , its John Key that's the problem. John Key is the joke, pony tails and all.


Well yes and no Cowpat - the natural Kiwi tendency to go gumboots deep has to share some responsibility. Witness 87 - the NZ market was savaged the most in the western world because we had ramped it up so much and the bigger the rise the bigger the fall. Watch out AKL - you will be no different. Markets have a tendency to revert to the mean - its just a matter of timing and that basket who rings the bell at the top of the market is generally MIA.
National's (and all other interested regulatory parties including the Reserve bank) fault was to cheerlead and not introduce any circuit breakers in the upward spiral of farm prices. Will anyone learn from this - probably not.


I agree , he's not responsible for anything and just laughs. Lots of kids orphaned by farmer suicides pretty funny JK, typical money trader seems like a nice guy but heartless.

I agree Smalltown, underlying all the market and regulatory issues is the fact that land values have gotten too high. Remember back when the govt was first elected they had a major report done on taxation that recommended either capital gains tax or land tax as part of the mix. Of course that is too politically difficult so it never got implemented.

"This is an industry where they've had a focus on growing equity and growing land values for quite a long time now. It's going to be a significant adjustment to getting back to the core business of effective farming for cash flow," English said.

The incentives have been there to leverage and leverage we have. English talks as someone who is merely an innocent bystander of unfolding events when he had the opportunity to adjust the playing field and mitigate the ensuing madness.

Nothing more irritating than watching question time. How anybody votes for that clown in good conscience is beyond me.


John Key's answer to a reasonable question made me squirm, just attacked the opposition with no attempt at answering the question. The National bench snigger sniggered like fatty vaughn on the footy show or a bunch of kids looking at porn but it wasn't a good look. God forbid, Gerry Brownlee was that embarrassed he even tried to run interference for JK.
Some days you just have to act like a Prime Minister- you can't always be one of the boyos swapping war stories after a coup with the JGBs.

...didnt see it. Was it on TV? I suspect not...gone are the days when such behavouir would be on at we get Kardashians and you tube bloopers instead.

The banks, anyway, should relax. Treasury, apparently, will be happy to see the farms sold. As the Herald reports this evening:

'Treasury secretary Gabriel Makhlouf says New Zealand needs to broaden its approach to Asian markets and embrace higher levels of foreign investment. "Just as we should celebrate Fonterra investing billions of dollars in farms in China, we should be seeking out far greater investment from Asia.”

'Makhlouf also spoke directly to the Herald about the politics and public concerns around foreign investment. "I completely understand that some feel passionate about these things." But from an economic perspective the ownership of a particular asset didn't really matter, he said. "What matters is: what use is that asset being put to?`"

Either we work to build the profits and value of assets we own, or we work to build the profits and value of assets owned offshore. There's no difference, none, if you look at it the right way..

Wrong Mr Malouf. Seriously wrong. The ownership of an asset does matter. If in the theory of economics it is thought not to, then economics is an analysis that does not usefully inform our decisions.

We would suggest some real examples would well test a few assumptions.

Unlike our trade relationships, where Asia now dominates, investment from emerging Asia remains at a fairly low level given its relative economic size and the significant two-way trade relationship. Asia is the destination for around 40 percent of New Zealand exports but represents only 16 percent of our foreign direct investment stocks.[8] Over time we expect that Asia will become an increasingly important source of foreign capital for New Zealand.

And the benefits of such investment are significant. Greater investment from Asia in the productive, value-adding sectors of our economy means that we can grow our businesses and reach markets that most firms here could not reach by themselves. And growing businesses mean more jobs and higher wages for New Zealanders. Just as we should celebrate Fonterra investing billions of dollars in farms in China, we should be seeking out far greater investment from Asia. An important part of this increased investment will likely occur through portfolio and other financial flows, providing an important opportunity to deepen our financial markets.

We don't think many of the new sources of funding being pointed to subscribe to the model being suggested.

Yes, Henry, there's a difference between direct asset purchase and 'portfolio and other financial flows', but the outcomes may not be dissimilar. Thus a great part of our dairying sector is now all but owned - directly or indirectly - by Australian banks, with congruent asset control.

"Either we work to build the profits and value of assets we own, or we work to build the profits and value of assets owned offshore. There's no difference, none, if you look at it the right way.."

What an extraordinary statement!

Sheep Shagger, I'm summarising Makhlouf's or the Treasury's position as it's pretty clearly expressed or quoted in the Herald report tonight: " But from an economic perspective the ownership of a particular asset didn't really matter", he [Makhlouf] said.'

It's most certainly not my position.

Working man, apolgies for ambiguity, I never for a moment thought you were that economically illiterate.

Just imagine how Warren Buffet would react to such nonsense. Ownership is everything when it comes to property rights - the right to pledge such property to raise finance.

No problem, SS. The quoted statement is among the most astonishing I have ever seen. It deserves the greatest publicity and debate, as to defining the future directions of the country.

There is no doubt in my mind that it indicates an absolute failure in Treasury to understand the bases of wealth creation and wealth maintenance. It would lead directly to a nation of tenants and employees, with all the insecurities and vulnerabilities that go with this - for the individuals, their families and the country as a whole.

In the absence of any examples demonstrating how NZ benefits from off-shore investment then they are simply glib meaningless statements

There's always a need for access to capital (debt, investment). The questions that matter - and which are overlooked in the creation every bubble (industry, housing, or national economies) - are how it's deployed and its proportionality.

we will give you two plastic wind up toys, a set of plastic beach chairs, a flat screen Tv and fridge, you give us the golden goose. All sweet as, bro.

Nail , head. Ask Maori if ownership matters.

Talking specifically about investment owned and deployed by off-shore-ites

Access to capital and debt is too generic for me

This model of absentee landlords owning all the assets and production worked out so well for the 19th century Irish.

Better go plant some potatoes.

You only have to look as far as the $5b per year in bank profits being sucked across the Tasman.

Interesting times.
All major commodities down across the globe
Production down across the globe
Debt skyrocketing across the globe
NIRP coming on eventually across the globe
Governments and Tax departments around the globe trying to ban anything other than having 'fiat' (in a bank)
Savers and the prudent who just wish to live without debt now becoming the latest targets and scapegoats for when the whole thing eventually tanks
Precious metal holders now becoming tax targets a wee fairytale country far far away in the pacific where it's claimed by their leaders that they have full immunity to all the above.......just look at those house prices....those record profit making banks......any bad news is 'just a blip', prepare for a "soft landing" NZ dairy and then yet another BOOM!

denial, anger, bargaining, depression,acceptance........and then (like in 2008) comes the forgiveness (bailouts 2.0)

90 days for payment. !!!! As policy !!!!! If this government had balls these socially unaware misfits would be gone in days. (I use "socially unaware misfits" as the best description of their disorder, not as abuse)

Is Fonterra in financial difficulties???

When Ralph Norris left in Nov 15 it looked odd as he was their one shining light. Then they had the $250m bond issue last year where "The bond issue was not seeking funds for any reason in particular",the new unsecured bond issue for $150m just closed was unnanounced. They also have those $390m interest free loans to farmers costing them money.

The expose by Brian Gaynor on Fonterra (Feb 28, 2016) highlighted that "Fonterra's total borrowings now more than $7.5 billion" and "Those net interest costs have risen from $269 million in the July 2013 year to $518 million in the latest period.".
Re their rating (Gaynor again) "This week's NZX release from Fonterra highlights a number of positive quotes from an October 2015 Standard & Poor's report which downgraded Fonterra's long-term rating from "A" to "A-".

However, the co-operative's release didn't mention that S&P's "A-" rating assumed a milk price of $4.60 per kilogram of milksolids compared with Fonterra's latest forecast of $4.15 per kilogram."
Guess what S&P- its now $3.90. Is there a downgrade coming?

.....And now they can't pay their bills in the normal time frame. That to me is the clincher - this company is most likely skating on thick cream. I suspect Bill English knows it, John Key, he just wants to continue hands off for just one more term pretty please.

Personally I think the only thing that can resurrect dairy and Fonterra is a lower dollar.
The OCR decision on Thursday will tell the farmers where they stand vis-a-vis the speculators and laundrymen of AKL in the eyes of the RB.

Yes Smalltown, I think Ralph Norris' resignation screamed trouble. I think the forward payout advice was crap. He knew it was crap. Advised it was crap. Got voted down. So he walked in frustration and despair. I said here when Wilson was voted in there would be trouble. I have history with the bloke He grazed heifers on my place. His actions were not good. I havent really had bother with grazers. The odd slow payer. I will just say it was a long time ago but he easily takes the cake as the worst dairy farmer I have come across business wise. I hope the ed doesnt take this down. Why on earth the farmers voted him in again confounds me. He is always missing in action. Doesnt front. Nothing has changed in 25 years. May I suggest his father would be a better bet.

Fortress Fonterra...the above comments about Wilson. What scares me, he will run from a fight. Run and hide. More than ever right now thousands of farmers across NZ need their leader present and accounted for. They need advise. They need the truth. Where is he?

Sir, the red light is flashing, I find it pretty and somewhat hypnotic, that to sir. The good news is we are landing, the bad news is, we are crash landing.

Dont look doll, this might get hairy thanks Aj brightened my morning.

What's so special about Ralph Norris? Fonterra has been on this course since formation due to the erosion of cooperative principles and government regulation based on flimsy theoretical economic ideology, imposed through the Commerce Commission.
An ex-director (supplier elected) also rated Norris, but I don't know what special abilities he has that signal him out, least of all his support for TAF before he was even ratified on the board.
However despite the governments blatant agenda of undermining the cooperative dairy industry in NZ (aided by self serving 'analysis' from financial industry players such as Brian Gaynor, farmers must accept responsibility for allowing the cooperative principles and culture to be undermined by our elected directors.

I dont think the point is that he is thought of as special. However his resignation was at a pivotal time for Fonterra. Elections. Payout forecast up. Yet most of the incoming news bad. Norris would have a brand to guard. He walked.

No loss, pity a few others don't take a leaf out of his book.

I think we all know where the money will come from to buy up all the bankrupt farms!

John Key is in a lot of trouble, there will be a takeover in government this year as the country falls to pieces