KEY POINTS:
The next stage of Fonterra's journey towards capital restructure took place last week with 100 meetings nationwide to discuss with farmers proposals announced last month.
Chairman Henry van der Heyden, who attended 14 meetings, says up to 3500 farmers took part.
Van der Heyden says the key objective was to get an understanding of the board's preferred option, which could lead to a market listing in 2010.
"If you'd asked me at the start I would have said if we can average 30 to 35 [per cent turnout] that means farmers are actually engaged in the process," he says.
People were saying it was too early to express views, he says.
"Before farmers have to make a decision they'll want to understand the milk price, understand the relationship with the co-operative and what does it actually mean for them."
With 95 per cent of Fonterra's milk exported the company had to have a global strategy, van der Heyden says.
"There's very good buy-in and acceptance of the strategy, then you have the appropriate capital structure to support that strategy, that's where they've got an open mind."
The aim of the restructuring is to ensure access to future capital for global growth opportunities, protect against farmers deciding to cash in shares and to provide them with more investment options.
The board's preference would retain the co-operative but create a new company to hold all the assets which would be listed on the stock market.
Fonterra Shareholders' Council chairman Blue Read says farmers were listening attentively but hanging out for more information.
"I expect a whole lot more will come out when there's a solid foundation, when there's something to get their teeth into ... because at the moment it's very, very high level stuff," he said.
People were not going to express support or disapproval when they did not have the facts to go on.
"Once they've got some facts in front of them debate is going to get one hell of a lot more intense."
The teeth sinking will come in February when Fonterra holds more meetings to discuss issues of milk pricing and the relationship farmers would have with the supply co-operative, with the first vote in the process - to create the new company - due in May.
DAIRY BONANZA
The payout to dairy farmers will top $7 a kilogram of milk-solids this season, with international dairy product prices still at "eye-watering levels", according to the latest Westpac Agribiz report.
Westpac reaffirmed its payout prediction, which is considerably higher than Fonterra's already record forecast of $6.40 this season. Last year's payout was $4.46 and Fonterra has warned farmers against getting carried away by speculation for this year.
Westpac says demand was expected to remain strong, driven by emerging markets, while supply remains tight with cuts in milk production in drought-affected Australia.
However, there were signs of a production response in other regions, including the United States, in reaction to the high prices, which would exert downward pressure on prices.
Future payouts were expected to ease on lower international prices and the strength of the New Zealand dollar, Westpac says.
Meanwhile, the medium term outlook for beef and sheep meat is positive, although the high value of the dollar is eating away the gains.
E. coli outbreaks in the US have hit consumer confidence in beef, the short-term price outlook has deteriorated, and drought and high feed costs are driving above average slaughter in the US.
Asian demand remains strong and the tighter supply following herd slaughter in the US and Australia bodes well for a positive mid-term outlook, Westpac says.
International market conditions in the lamb sector were improving with reform in Europe driving stock reductions and lower production here expected to put upward pressure on prices. Strong demand was also coming out of emerging markets, including China.
However, the strong kiwi dollar is "choking off gains at the farmgate".
No prizes for guessing what will be top of all exporters' Christmas wish lists. No tears now, maybe next year.
PAUA PROTECTION
A devastating virus killing abalone shellfish in parts of Australia could destroy New Zealand's 65 million-year-old paua in just five years if it crosses the Tasman, says Paua Industry Council chief executive Jeremy Cooper.
Abalone ganglioneuritis (AVG) has spread 100km along the coast of Victoria in only two years, killing up to 90 per cent of the green- and black-lipped abalone population.
"The AVG virus is not present in New Zealand paua but we cannot afford for a single molecule to be carried into New Zealand waters," Cooper says.
Mucus exuded by infected and dying abalone is believed to be behind the spread of the disease.
"The mucus gets into wetsuits, rash vests and shoes and then is transported in unclean, damp gear to the next point of contact," Cooper says. "So it's very important that people clean and dry their gear, especially divers and surfers."
The probability of the disease reaching New Zealand is low but the outcome would be devastating for commercial, customary and recreational fishing, plus the tourism and export industry, he says.
The total allowable commercial catch for paua is 1057 tonnes which, with customary and recreational collection, and poaching, totals about 1500 tonnes each year.
Paua meat exports are worth between $50 million and $70 million a year, while the raw value of the shell is roughly $3 million.
"I would say that that's not the predominate value, that value would be more in the customary aspect of the fishery," Cooper says. "It's a very valued food source, and it's a taonga, it's a treasure in the customary world."
Travellers are advised to make sure all water activity gear, including wet-suits and shoes, are clean and dry.
"It's something Kiwis just simply have to learn. If you're overseas anywhere and you're coming back into New Zealand make sure everything's clean and dry.
"If the people bringing in those thigh waders had had absolutely clean and dry thigh waders didymo wouldn't have got to New Zealand."
CLEAN AND DRY
Research by Nielsen of 1500 people who use freshwater ways more than four times a year shows last summer's "Check, Clean, Dry" campaign is working, says the Government.
Three-quarters of those surveyed are taking different action when using fresh water areas to slow the spread of didymo, with 64 per cent always making an effort to check, clean and dry their gear.
But Biosecurity Minister Jim Anderton says many people in the North Island - where live didymo has not yet been found - may consider it to be a South Island problem.
The differing perception of the risk of didymo is leading to a divergence in actions between the two islands, with 82 per cent compliance in the South Island but only 55 per cent in the North Island.
"However, the recent scare in the North Island has highlighted the need for people to start checking, cleaning and drying now to best manage the pest should it arrive," Anderton says.
DIDYMO DUD
Dead didymo cells found in four central North Island rivers in October have been tracked by MAF Biosecurity and the National Institute of Water & Atmospheric Research to contaminated water sampling containers.
Pottle lids contaminated with dead didymo cells were held in storage at a Niwa facility in Christchurch before being sent to the North Island for use in water sampling.
The Government said that at no time could live didymo cells have been transferred to the North Island. Niwa has taken action to prevent a recurrence. No further cells have been discovered.
PPCS INVESTS
Meat exporter PPCS is investing more than $1 million next year on its Waitane lamb processing plant near Gore as part of a restructuring process to align capacity to national livestock.
Chief executive Keith Cooper says the capacity for chilled lamb production will be upgraded and expanded.
"There is an increasing consumer preference for chilled rather than frozen lamb in our key export markets," Cooper says. "In response to consumer demand, PPCS has a strategy to increase its premium chilled business by 7.5 per cent in the year ending August 2008."
