Sharemilkers and Fonterra's new capital structure meetings
Media are invited to attend a series of meetings Federated Farmers is holding for all sharemilkers, farm owners and rural professionals to discuss how Fonterra’s capital restructure affects the sharemilking industry.
Since the last meetings held this time last year, a number of issues have been raised by farmers as they have talked with their sharemilkers.
The meeting will include a presentation from Federated Farmers Sharemilkers’ Section and the Sharemilker Employers’ Section.
This will be followed by a presentation from the Fonterra Share Registry and Payments team, who will cover the options available and the matters which need to be considered, when making agreements on payment to sharemilkers for milk.
This will cover the options available (Milk Price only and Milk Price plus any Dividend Related Payment Adjustment (DRPA)) as well as the options contained within the Milk Price plus DRPA option.
Issues to be considered with Fonterra’s payout structure:
1. Shares are no longer tied to production.
2. Shareholders can now hold dry shares.
3. The dividend is paid on both the wet (production) shares and dry shares
4. The dividend may not be tied to production. For example:
So should the change in dividend be made up by either party? Either way, there seems potential for dispute. 5. If shareholding is based on rolling three-year production and the sharemilker is increasing production, will the sharemilker be paid out on this extra production reflecting their extra effort? 6. The shareholder only has to hold shares for the rolling three year average, which may be less than production. 7. Trading Among Farmers (TAF) is going to complicate this dividend payment even more as shares will be able to be traded regularly throughout the year. Meeting dates and venues (open to members and non-members of Federated Farmers): Venue Time Organiser Contact details Rotorua St John’s Hall, Pererika Street 11am, 14 December Barbara Hunt 07 3624883 Cambridge Alf Walsh Lounge, Cambridge Raceways Event Centre, Taylor Street 7pm, 14 December Gaylene Bamford 07 858 0820 Stratford Conference Room, War Memorial Hall, Miranda Street 11am, 16 December Paul Davidson 027 548 2001 Oamaru The Lindis Room, Brydone Hotel, 115 Thames Street 12 noon, 15 December Peter Borrie P027 224 6360 Ashburton The Ashburton Hotel 7pm, 15 December Chris Ford 027 251 1709 Invercargill Federated Farmers 70 Forth street 11am, 16 December Donald Kidd 021 149 1749 We recognise this spread of meetings means that some farmers may have to travel long distances, but are strongly urging them to carpool with rural professionals in order to attend these meetings. These meetings are free and are open to Federated Farmers members and non members alike.