Dairy farmers have voted not to allow Fonterra to list shares on the sharemarket. Fonterra is owned by dairy farmers in a co-operative. The company controls 92% of all the milk produced in New Zealand. The Fonterra Board needs more money to expand the dairy business and wanted to offer shares in the company so that other people could invest in the company. However, farmers are frightened of losing control to foreign shareholders and voted to keep things the same as they are now.
Meanwhile, prices for whole-milk powder in a global on-line auction have increased 24.2% this month. Last month the increase in price was 26%. This looks very good for the future price of milk paid to the farmer. However, Fonterra says it is too soon to say if price rises will continue.
Fonterra produces 30% of the world’s whole-milk powder.
For more information on Fonterra, listen to August 26th 2009 Dairy Farmers