The council says Fonterra has failed to deliver meaningful returns over and above the cost of capital since inception.
It cites milk growth over the past 15 years as one of the main impediments to value creation.
Milk volumes have grown 45% since the co-operative was formed, giving fewer options when choosing what to process in that giant vat each year.
There have been positives for farmers, of course, with a decent milk price and rising land values helping grow farmer wealth.
Overall, it’s pretty stern stuff but the new leadership appears to be listening.
Interim chief executive Miles Hurrell has already signalled one of the three strategic Vs – volume – will be jetisoned.
That will help Fonterra control its value-add destiny a bit more and also play well in the court of public opinion where the constant growth in cow numbers has not been greeted warmly.
Our reporter at Thursday’s annual meeting didn’t report any blood on the floor at Lichfield and that’s probably down to the distinct change in tone from the new leadership of Hurrell and chairman John Monaghan.
They are listening to farmer shareholders, acknowledging their concerns and appear to be putting in place a plan to return the co-op to profitability.
Of course, while that pair were on board the ship as it sailed into these stormy straits, they weren’t at the helm.
Farmers appear to be warming to the new leadership and with last week’s director elections bringing in some new blood shareholders are making their feelings known in other ways too.
We all need Fonterra to succeed.
A co-op, at its essence, is owned by its shareholders.
It looks as though, for the first time in a while, their voices are being heard.
Bryan Gibson
