Question for New Zealand Farmers (Silver Fern Farms)?

[Pilatus]

My sister recently went to New Zealand and went to a member of Silver Fern Farms. I have just Googled Silver Fern Farms and I see they are a huge outfit. Would they be termed as a an agricultural cooperative?
Out of interest I would be interested to know how the business came about from humble beginnings?

 

[Kiwi Pete]

https://en.m.wikipedia.org/wiki/Silver_Fern_Farms

 

[Bury the Trash]

https://en.m.wikipedia.org/wiki/Silver_Fern_Farms

Wow, a co.op that's been going since 1948 thats pretty unheard of round here .

 

[kiwi pom]

50% Chinese owned though. How long before its 100%?
I believe Westland dairy company, another old co op is about to be sold to the Chinese?
UK farmers have a big problem with supermarkets squeezing prices. I believe in a few years NZ farmers are going to be squeezed hard , not by supermarkets but by the fact most of the processing is owned by China.
The general public seem to be massively against Fonterra and I think the current governments not far behind. If it goes too, I can see a lot of threads on here by Kiwi's asking, "what do you do when your buyer has you by the balls?"

 

[Pilatus]

50% Chinese owned though. How long before its 100%?
I believe Westland dairy company, another old co op is about to be sold to the Chinese?
UK farmers have a big problem with supermarkets squeezing prices. I believe in a few years NZ farmers are going to be squeezed hard , not by supermarkets but by the fact most of the processing is owned by China.
The general public seem to be massively against Fonterra and I think the current governments not far behind. If it goes too, I can see a lot of threads on here by Kiwi's asking, "what do you do when your buyer has you by the balls?"

Slightly of topic, but was surprised to hear from my sister, who has recently visited,N Z North Island, that food was much more expensive , than the uk. My nephew who is over here from Australia also told me that food was a lot more expensive in Aus than here, and that only two supermarkets dominated Australia,

 

[Kiwi Pete]

50% Chinese owned though. How long before its 100%?
I believe Westland dairy company, another old co op is about to be sold to the Chinese?
UK farmers have a big problem with supermarkets squeezing prices. I believe in a few years NZ farmers are going to be squeezed hard , not by supermarkets but by the fact most of the processing is owned by China.
The general public seem to be massively against Fonterra and I think the current governments not far behind. If it goes too, I can see a lot of threads on here by Kiwi's asking, "what do you do when your buyer has you by the balls?"

Just switch processors, is the simple answer.
I do have my doubts that SFF will reduce local shareholdings below the current 50%.. but many other options are available

 

[Kiwi Pete]

Slightly of topic, but was surprised to hear from my sister, who has recently visited,N Z North Island, that food was much more expensive , than the uk. My nephew who is over here from Australia also told me that food was a lot more expensive in Aus than here, and that only two supermarkets dominated Australia,

The joys of lots of imported produce and a weak currency.

 

[Farmer Roy]

Is "expensive" ( & as a local resident, I don't think it is, I actually think it's quite cheap considering the quality & range available ) food a bad thing ?
I think part of the problem UK Ag seems to have is this constant pressure for "cheap" food - it is devalued in the consumers eyes

I will agree about the negative impacts of the supermarket duopoly though . . .

 

[Kiwi Pete]

Is "expensive" ( & as a local resident, I don't think it is, I actually think it's quite cheap considering the quality & range available ) food a bad thing ?
I think part of the problem UK Ag seems to have is this constant pressure for "cheap" food - it is devalued in the consumers eyes

I will agree about the negative impacts of the supermarket duopoly though . . .

It's worth whatever the consumer will pay.

Processed stuff is relatively inexpensive by comparison to "produce" especially locally, but maybe 6000 people would shop regularly at this supermarket? this means a good margin on each item must be added, apparently it's the most expensive New World supermarket in the country, along with the west coast.

Again, I'd rather pay more and not have millions on my doorstep

 

[kiwi pom]

Just switch processors, is the simple answer.
I do have my doubts that SFF will reduce local shareholdings below the current 50%.. but many other options are available

Yes sounds simple doesn't it, many buyers = many bidders?
But is that how it works in practice?
Take dairy, Fonterra, no matter how badly it may or may not be run, is still the biggest player and aims to have as high a milk price as possible for its owner/suppliers. It sets the whole countries milk price, the rest get somewhere near in order to get supply. Worth noting that despite what they may say, many have sold Fonterra shares and moved to another processor, not because they want to but because the banks told them, they had to. I believe you have to sign lengthy contracts too(?)
Take Fonterra out (and Westland) where's the incentive for any buyers to keep the price high? They have their own, non farmer shareholders to keep happy.
With the money some have paid for irrigated dairy ground, they're not going to go back to extensively farming a few sheep either.
So you get the situation they have in the UK, of processors just paying enough to keep you going. Although perhaps Arla do hold the price up a bit there too, as they're a co op.
I see no advantage to NZ farmers to have processors privately owned especially by foreign companies.

 

[Kiwi Pete]

Yes sounds simple doesn't it, many buyers = many bidders?
But is that how it works in practice?
Take dairy, Fonterra, no matter how badly it may or may not be run, is still the biggest player and aims to have as high a milk price as possible for its owner/suppliers. It sets the whole countries milk price, the rest get somewhere near in order to get supply. Worth noting that despite what they may say, many have sold Fonterra shares and moved to another processor, not because they want to but because the banks told them, they had to. I believe you have to sign lengthy contracts too(?)
Take Fonterra out (and Westland) where's the incentive for any buyers to keep the price high? They have their own, non farmer shareholders to keep happy.
With the money some have paid for, irrigated dairy ground, they're not going to go back to extensively farming a few sheep either.
So you get the situation they have in the UK, of processors just paying enough to keep you going. Although perhaps Arla do hold the price up a bit there too, as they're a co op.
I see no advantage to NZ farmers to have processors privately owned especially by foreign companies.

Not sure if you are up to date with the number of new milk factories down this end or not.
Most are quite competitive and have the "advantage" (if you like) of being 100% kiwi owned - it simply means that any expansion funding comes from farmer's pockets.

One of the main issues with these "crossover co-ops" that try the corporate model for size, is that they begin to rely on more and more volume... Fonterra being a great example of this: they want to be the "biggest", others want to do the "best" for their shareholder suppliers, hence the traction they have gained down here in the past decade.
End of the day, the money has to come from somewhere.

 

[kiwi pom]

Not sure if you are up to date with the number of new milk factories down this end or not.
Most are quite competitive and have the "advantage" (if you like) of being 100% kiwi owned - it simply means that any expansion funding comes from farmer's pockets.

One of the main issues with these "crossover co-ops" that try the corporate model for size, is that they begin to rely on more and more volume... Fonterra being a great example of this: they want to be the "biggest", others want to do the "best" for their shareholder suppliers, hence the traction they have gained down here in the past decade.
End of the day, the money has to come from somewhere.

Yep, I'm probably a bit out of touch. From memory Open country is owned by the Talley family, don't know a lot about them but I'd guess their suppliers don't get a lot of say, their reputations not great. Danone own one down your way and the one that opened last year, Mataura Milk? is at least 50% owned by a Chinese company.
Oceania at Glenavy is Chinese owned, I think they're behind the Westland buy out? Then Synlait up around Christchurch, China again.
If one plant goes down I believe they help each other out with milk swaps etc. so they already work together, if you see what i'm getting at
I think Fonterra's problem was, they had to grow too quick when the price was good and everyone was converting. Dira regulations mean they have to take supply. There was so much milk they had to make low value product, just to get rid of the milk. Its taken quite a few years to catch up to it.
If Fonterra have a good year, the pay out goes up. I don't see the incentive for a privately owned processor to do it if they have supply under contract.

 

[Kiwi Pete]

Yep, I'm probably a bit out of touch. From memory Open country is owned by the Talley family, don't know a lot about them but I'd guess their suppliers don't get a lot of say, their reputations not great. Danone own one down your way and the one that opened last year, Mataura Milk? is at least 50% owned by a Chinese company.
Oceania at Glenavy is Chinese owned, I think they're behind the Westland buy out? Then Synlait up around Christchurch, China again.
If one plant goes down I believe they help each other out with milk swaps etc. so they already work together, if you see what i'm getting at
I think Fonterra's problem was, they had to grow too quick when the price was good and everyone was converting. Dira regulations mean they have to take supply. There was so much milk they had to make low value product, just to get rid of the milk. Its taken quite a few years to catch up to it.
If Fonterra have a good year, the pay out goes up. I don't see the incentive for a privately owned processor to do it if they have supply under contract.

I think your very last sentence summed up the "problem" that some farmers have/had with them - the general concensus amongst the local group is that "they should have held some back for the bad years" which (IMO) is absolutely bonkers - this is what farmers themselves should have done!
You can't fix stupid, though, can you?

I personally have no issue with part Chinese ownership of co-ops, them being the "go-to" market and the big growth area, it's actually reasonably good insurance in some respects - look at how they screwed down importing from other countries when Mr Trump started playing bully-boy with trade deals - a fine way for NZ to keep a big trading partner "sweet" while freeing up farmer equity for farming.
A similar win-win for SFF suppliers as otherwise they would have been wearing the cost of the Richmond fiasco themselves - which wouldn't have been pretty at all

 

[FonterraFarmer]

The joys of lots of imported produce and a weak currency.

Currency much like our PM

 

[FonterraFarmer]

Yes sounds simple doesn't it, many buyers = many bidders?
But is that how it works in practice?
Take dairy, Fonterra, no matter how badly it may or may not be run, is still the biggest player and aims to have as high a milk price as possible for its owner/suppliers. It sets the whole countries milk price, the rest get somewhere near in order to get supply. Worth noting that despite what they may say, many have sold Fonterra shares and moved to another processor, not because they want to but because the banks told them, they had to. I believe you have to sign lengthy contracts too(?)
Take Fonterra out (and Westland) where's the incentive for any buyers to keep the price high? They have their own, non farmer shareholders to keep happy.
With the money some have paid for irrigated dairy ground, they're not going to go back to extensively farming a few sheep either.
So you get the situation they have in the UK, of processors just paying enough to keep you going. Although perhaps Arla do hold the price up a bit there too, as they're a co op.
I see no advantage to NZ farmers to have processors privately owned especially by foreign companies.

You forgot Tatua!!!

 

[Bury the Trash]

Currency much like our PM

Seems to me like you got a bit of a thing for her the amount shes mentioned

And whats wrong with someone in the high echelons starting out on menial jobs ( like working in a chippie ) least they worked their way up ....

 

[FonterraFarmer]

Seems to me like you got a bit of a thing for her the amount shes mentioned

And whats wrong with someone in the high echelons starting out on menial jobs ( like working in a chippie ) least they worked their way up ....

Insert Tui billboard Not sure if you realise that she got the Labour party leadership by default after Chicken Little bailed out and no one else put their hand up, and to be PM via the coalition of loosers and the reality of the Deputy PM"s choice rather than the voters, who's the monkey and who's the organ grinder springs to mind.
Regardless of where on the political spectrum , I've always had a dislike of career politicians ,more so one who have had no real life/work experience or token work experience at that ( If working in the Blair administration counts?)
I'm not entirely sure that even at a political level that she has had enough experience as she seems preoccupied with short term situations without any considerations of any long term consequences or repercussions.
That said, most other western countries seem to have the same problem, the UK , EU, US ,Canada, Australia......

 

[Princess Pooper]

Wow, a co.op that's been going since 1948 thats pretty unheard of round here .

our co-op has been going since 1911

 

[7610 super q]

'twas wondering if you NZ guys could produce a small pamphlet on " How things are done in NZ ", which would save thousands of young farmers from Blighty travelling all the way to NZ to " See how things are done in NZ ". It would save a fortune, and cut global warming.

Many thanks.

 

[Bury the Trash]

our co-op has been going since 1911

Now you've got me reading about the '' Rochdale pioneers