“Rumours are not normally that specific so I would like to hear from you, Theo, specifically.”
Chairman John Wilson commented before Spierings spoke, saying he found it “absolutely appalling that this rubbish hits the media as we are having a vote and that some of our farmers give it ear time.
“It is why we are having discussions about governance and representation and why we need change.”
Spierings then said Fonterra’s strategy was working. He had a senior team that was highly engaged and a strong customer base around the world.
“The ship has turned and we are going faster than before.
“I believe in the strength and the future of the co-operative.”
Spierings said he had no plans to leave.
Shareholder Davis Gascoigne said he was pleased to hear milk price reality hit home in Australia and he was therefore expecting a significant early improvement in the Fonterra Australia business results flowing into dividends.
Spierings said the Australian outlook was much more positive and returns would flow back immediately.
“Absolutely appalling that this rubbish hits the media as we are having a vote and that some of our farmers give it ear time.”
John Wilson
Fonterra
The three-year business transformation under Oceania managing director Judith Swales was destined to bring the Australian business back to profitability next financial year but the “real milk price” would now bring profitability straight away.
“We always questioned the levels of the previous milk prices based on the returns achievable from Australian exports,” Spierings said.
“At the beginning of this year I said the milk price should be around A$4.47/kg milksolids but there was constant talk of $6 so I said that was not viable.
“It is sad for Australian dairy farmers, who get 100% advance rate, when towards the end of the season they get told the real price and have to go two months without income.
“In NZ the milk price manual is one of the biggest assets – the non-transparency of the price in Australia leads to inefficiencies, over-capacity and excess costs.”
Spierings said the transformation included divestments and the joint venture with Beingmate for Darnum and the Australian division would now be strongly profitable.
Milk market share was under pressure in western Victoria from the Warrnambool plant competitor, recently bought by Saputo of Canada.
“In the other three supply regions – Tasmania, eastern and northern Victoria, we are holding our supplier numbers.
“We need to build supply farms, especially around Stanhope where the new cheese factory will have greater capacity than the one that burnt down.”
