For a long while New Zealand dairy farmers have been enduring continuous drops in the value of their milk products yet are pleased to hear their employer, Fonterra, announce a well over 100% profit on its last year’s earnings.
On account of this happy revelation Fonterra is prepared to fund a generous dividend payout to dairy farmers for their respective stakes in the company…
It seems no one has yet asked the obvious question: How, when the value of our milk products has been steadily dropping for the last few years, can you, the company who pays for our milk products, claim to have over doubled your profits in the last twelve months?
…As if this will make up for years of falling dairy prices; as if a sole dividend payment will account for those farmers who have already been forced to walk off their land.
Nevertheless Fonterra is now being celebrated and even praised by farmers for its goodwill towards them; although not so much by those farmers who couldn’t handle the strain of working for pittance and who have already declared bankruptcy, but certainly the others who are still struggling under Fonterra’s meagre milk price.
It’s like when a bank or utility company announces a ‘record profit’ – all this effectively means is that they’ve been overcharging their customers, because while it might warm a consumer’s heart to hear that their bank or electricity provider is doing so very well, as the consumer paying for that record profit margin, although the company CEO’s salary might go from $800 grand to a cool million, you will likely see no benefit at all.
Similar to our national sport, where we once excelled but are now nothing remarkable, the rest of the world has caught up and just as I predicted in a former post – Fieldays – the dairy boom in New Zealand never was going to last.
Well, clearly it is lasting for Fonterra, just not for the farmers who work so hard to ensure this company’s future prosperity.
Article by Tim Walker
Edited by Ria Core Pruffet
Photography by Fawcy O Celery