Waikato farmer Gary Reymer, who has supplied milk to the co-op for nearly 50 years, has around 500 cows on two farms near Cambridge.<\/p>\n
He started with the co-op as a sharemilker in the late 1970s, originally supplying the New Zealand Dairy Group, before the merger with Kiwi Co-operative Dairies formed Fonterra.<\/p>\n
Reymer said farmers would use their payments in different ways, as some were more comfortable into the long-term than others.<\/p>\n
\u201cSome will have drinks on them, some will take a bit of travel, some will go for debt reduction, and some will go for capital improvement,\u201d he said.<\/p>\n
\u201cFor ourselves, it\u2019ll just be consolidating our position, nothing extravagant … debt reduction.\u201d<\/p>\n
Reymer was among the 98% of shareholders who supported the divestment of Mainland Group, and said it was smart to sell it because the brands were no longer adding value.<\/p>\n
\u201cTurning off the brands business was probably the final conclusion over many, many years, decades on the back of discussion,\u201d he said.<\/p>\n
\u201cEverybody\u2019s just come to the understanding that it was a really difficult nut to crack, and this is probably the best strategy.\u201d<\/p>\n
Reymer said not all was lost, as the deal enabled the co-op to continue supplying the ingredients for the new owner, Lactalis.<\/p>\n
\u201cI see it as very much a win-win, and I think that\u2019s where the majority of shareholders have got to.<\/p>\n
\u201cWe\u2019ve lived through farming long enough or farmed for long enough, and there\u2019s plenty of cycles, and you\u2019ve got to make sure you bank the good times so you can move to the bad times.\u201d<\/p>\n
Gary Reymer has been a dairy farmer for nearly 50 years and farms near Cambridge. Photo \/ RNZ, Andrew McRae<\/p>\n
Debt, farm equipment and family holiday<\/p>\n
Meanwhile, for Waikato\u2019s Wallis farming family, the mega-payment was going towards reducing debt, buying new farm equipment and a long-awaited family holiday.<\/p>\n
Sixth-generation farmer Ross Wallis ran around 285 cows on 108 hectares with his wife and four kids near Raglan. <\/p>\n
Wallis joined the co-op in 2000 and said the consumer brands business had been a \u201cbone of contention\u201d then.<\/p>\n
\u201dYou were pulled too many ways, and it was just evident that we\u2019re really not a consumer business. We\u2019re not good at it, for whatever reason that might be.<\/p>\n
\u201cBut ingredients and business-to-business foodservice, I mean, we\u2019re exceptional at, and we do really well. <\/p>\n
\u201cWe\u2019re probably world leaders in that space.\u201d<\/p>\n
He said his payments were already accounted for.<\/p>\n
\u201cThere\u2019ll be a good chunk of it going into debt reduction, which is greatly needed. <\/p>\n
\u201cBut also we\u2019ve just purchased a tow and fert.\u201d <\/p>\n
He said the $34,000 investment in the 1000-litre spray machine would help reduce his fertiliser bill.<\/p>\n
\u201cWith fertiliser prices skyrocketing, we just need to be more efficient at what we\u2019re putting on, and so tow and fert allows you to put on less with more bang for your buck.\u201d<\/p>\n
Now only using locally sourced fertilisers, Wallis said the new equipment would allow for a more efficient use of spraying lime, small seeds and the seaweed-based fertilisers he used to improve soil biology.<\/p>\n
\u201cWe\u2019re [also] going to put a little bit towards an overseas holiday later in the year.\u201d<\/p>\n
Wallis said many farmers would likely invest in technology to drive on-farm efficiencies, as he had.<\/p>\n
\u201cI think we\u2019ve got some exciting times ahead.\u201d<\/p>\n
Deferred maintenance, effluent system and succession<\/p>\n
Jonn Dawson, a Morrinsville-based farm management consultant of almost 30 years, said many of his clients will be using the payout to pay debt as their number one priority.<\/p>\n
Dawson said others were also planning on reinvesting the money into their farm operations. <\/p>\n
\u201cIt\u2019s never hard to spend money on a dairy farm,\u201d Dawson said. <\/p>\n
\u201cThere are often deferred maintenance issues that need to be attacked, things like fencing and milking plant maintenance.<\/p>\n
\u201cThere are compliance issues, which you can throw a lot of money at, perhaps upgrades to effluent systems and environmental initiatives,\u201d he said.<\/p>\n
\u201cThe other thing is that there\u2019s the opportunity for expanding the business, you know, more cows, upgrades to cow sheds.\u201d<\/p>\n
Dawson said the payout also represented a chance to consider succession planning, which a few of his clients were looking at.<\/p>\n
He said the cash injection will be good for communities that supported dairy farmers, especially in regions such as Waikato and Taranaki.<\/p>\n
ASB chief economist Nick Tuffley did not expect any consumer spending binge, but obvious moves to pay debt, do maintenance and capital spending.<\/p>\n
\u201cThis is a big one-off payment,\u201d he said.<\/p>\n
\u201cIt will take time for some of the spending impacts to flow through, but that is going to benefit rural communities. <\/p>\n
\u201cAnd also, we think it\u2019ll put the dairy farming sector in a more resilient position.\u201d<\/p>\n
He said a theme coming through was that older farmers were looking to their departure from the industry.<\/p>\n
\u201cIt will also set up some dairy farmers for their future as well, particularly if they\u2019re looking at diversifying and putting that money to use in other ways that will help them at that time of life if they move off the farm.\u201d<\/p>\n
Meanwhile, the co-op\u2019s president of global ingredients, Richard Allen, was announced on Monday as the new chief executive, following the resignation of Miles Hurrell, announced last month.<\/p>\n
– RNZ<\/p>\n","protected":false},"excerpt":{"rendered":"Waikato farmer Gary Reymer, who has supplied milk to the co-op for nearly 50 years, has around 500…\n","protected":false},"author":2,"featured_media":378257,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[1643,138,64648,7226,25689,6101,23394,28205,111,139,69,1653,1133,25690,28206,223,14005,102],"class_list":{"0":"post-378256","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bank","9":"tag-business","10":"tag-farmershareholders","11":"tag-fonterra","12":"tag-gianina","13":"tag-good","14":"tag-mainland","15":"tag-monique","16":"tag-new-zealand","17":"tag-newzealand","18":"tag-nz","19":"tag-payments","20":"tag-sale","21":"tag-schwanecke","22":"tag-steele","23":"tag-the","24":"tag-times","25":"tag-with"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/378256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=378256"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/378256\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/378257"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=378256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=378256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=378256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}