Of Payout and ThingsThursday, Jul 20, 2000
NZ Dairy Group has announced a slightly lower payout than Kiwi Coop announced last month. The three
to seven cent differences, quite a significant sum for many farmers, may illustrate the diverging
philosophical approach by the two companies suppliers to their futures in the industry.
In spite of a much greater debt per kg of milk solids Kiwi has still managed better performance at a
different stage of its investment cycle when compared with NZDG. Kiwi have pushed forward strongly
with investment in manufacturing scale and the application of newer, technologically efficient processes
Significantly only a proportion of NZDG shareholders have participated in, the about to be floated distribution
subsidiaries 4.2 cent profit distribution.
Could it be that NZDG is now overtly showing the symptoms of a sunset company?
Is the company reflecting an unsaid wish of aging suppliers to cash up and cease milk production?
Is the Waikato racing headlong into a semi urban land use of lifestyle blocks and specialist horticultural
If the megamerger had proceeded, would it have triggered a major exodus of Waikato suppliers who have
just been hanging on for some capital distribution to assist their retirement from milk production?
It is amusing to read of insufficient supplies of low priced milk powder being available to weaner calf
rearers trying to satisfy the demand for bull beef.There must be a opportunist benefit available
to an enterprising milk producer to profitably offer delivery of fresh milk to rearers instead
of waiting for powder to be collected and processed at considerable cost for immediate reuse by
calves in August.