But even without those issues – Beingmate and the Danone payment – the picture is still not a pretty one.
In its own reporting on the year-end result the co-operative has used the red pen liberally and is frank about its own failings.
Forecasting was off, the strong milk price squeezed margins and return on capital dropped.
Farmers might be in two minds about the result.
On the one hand the milk price is good and has been for a couple of years so things are ticking along on-farm.
But there’s an expectation the milk that leaves the vat will be turned into products that lift returns further. Farmers and unit holders have funded investment in value-add and are yet to see a return.
That needs to change.
The new leadership recognises that. Miles Hurrell and John Monaghan say they’re going to run the ruler over the co-op’s strategy and investments and make sure investors’ money is being put to best use.
As Hurrell said “There are people depending on us – farmers, unit holders and employees who want to be part of a successful co-operative.”
There has been talk for some time about DIRA and the limitations it puts on Fonterra’s ability to choose its own destiny.
While regulatory change is hoped for it can’t be banked on and Hurrell, Monaghan and the rest of the leadership team will need to show in the coming months they have a clear plan to grow profits and boost returns.
Forecasts given for this coming season are a positive sign but farmers will be looking between the numbers for a strategy they can believe in.
Bryan Gibson
