The dairy sector may weather the drought better than beef and
sheep farmers but Fonterra's recently launched shareholder
fund units could take a hit in value.
Groups already working to improve water quality in the
Waituna Lagoon near Invercargill have welcomed funding from
dairy giant Fonterra.
Fonterra is investing $20 million in a conservation project
to restore waterways in Northland, Waikato, Canterbury and
Prices surged in the GlobalDairyTrade auction this week,
increasing 10.4% on a trade-weighted basis, as New Zealand's
supply tightens rapidly, due to dry conditions.
Fonterra and Netherlands-based A-ware Food Group have signed
an agreement to develop a cheese plant and dairy ingredients
plant in Heerenveen, in the north of the Netherlands.
Fonterra will launch a bonus issue in April that the dairy
processor says will not dilute the value for either
shareholders or unit holders.
Dry weather conditions, particularly in the North Island, in
mid-December and January had resulted in a slowdown in milk
supply growth, Fonterra chief executive Theo Spierings said
Moves by Fonterra and the Ministry of Primary Industries
following the agrichemical scare appear to have largely
assured markets that New Zealand dairy products are safe,
Westpac economist Nathan Penny says.
Fonterra has moved to persuade global customers that New
Zealand dairy products are safe to consume, in the wake of
the discovery of dicyandiamide residue in milk.
Australian-based Morningstar Equities is less enthusiastic
about the prospects of the Fonterra Shareholders Holder Fund
than most of its New Zealand counterparts.
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