Rural round-up

July 10, 2015

Former Fonterra boss Craig Norgate dies:

The former Fonterra boss, Craig Norgate has died. He was 50.

Mr Norgate had a spectacular rise in business, becoming head of New Zealand’s biggest company, Fonterra, at the age of 36. . .

$158,000 to protect Taranaki biodiversity:

Environment Minister Dr Nick Smith today announced a $158,000 Community Environment Fund grant for a project which aims to protect native birds and forest at Rotokare Scenic Reserve in South Taranaki.

“This funding will help support the work underway to ensure a ‘halo’ more than 2000 hectares in area surrounding the predator-proof fence of Rotokare Scenic Reserve. This funding will extend the successful work of the Rotokare Scenic Reserve Trust as well as neighbouring property owners and local councils to create a flourishing ecosystem in an area that was previously threatened by predators and land use change,” Dr Smith says. . .

ComCom to file court proceedings over price fixing – Suze Metherell:

(BusinessDesk) – The Commerce Commission intends to file court proceedings against PGG Wrightson, Elders New Zealand and Rural Livestock by the end of the month, claiming the three fixed fees charged during the implementation of a national livestock tagging scheme.

The consumer protection authority is investigating fees charged during the adoption of the National Animal Identification and Trading Act 2012, commonly known as NAIT. A spokesman for the commission confirmed it intends to file proceedings against the three agricultural companies and five undisclosed individuals before the end of this month. . .

Improvements sought for forestry scheme:

A review to increase uptake for the Permanent Forest Sink Initiative is underway and the government is seeking feedback from industry on the proposed changes, says Associate Primary Industries Minister Jo Goodhew.

Introduced in 2006, the Permanent Forest Sink Initiative was the first national scheme that allowed forest landowners to earn emissions units for the carbon stored within their forests. . .

More than one prize to aim for in South Island farming competition:

In addition to the top prize of a $20,000 travel fund, entrants in the 2015 Lincoln University Foundation’s South Island Farmer of the Year Competition will also be able to pitch for one of four special category prizes, with a cash prize of $5000 each.

Lincoln University Foundation Chairman Ben Todhunter said generous support from sponsors meant that the four prizes could again be offered this year, after their debut in the 2014 season. . .

Two Brands, Three Blokes, One New Wine Company:

Two renowned Marlborough wine brands are joining forces, with the backing of former employees.

Highfield and TerraVin Wines will now be known as Highfield TerraVin Ltd.

Winemakers Alistair Soper and Gordon Ritchie have joined with General Manager Pete Coldwell to run the new company, with all three men having some strong goals in mind. . .

 

Technology takes vineyard to the world:

One of New Zealand’s fastest growing and most innovative wine companies, Yealands Family Wines is taking its sustainability story to global markets via a leading edge, digital platform.

YealandsLive.co.nz features dynamic content captured via a series of live feeds, directly from the Yealands Estate Seaview Vineyard and Winery in Marlborough, New Zealand. The website aims to give consumers and the wine trade a unique, and authentic behind the scenes look at one of the world’s premier sustainable wine producers. . .

 

 


PGW’s loss SFF’s gain – again

August 31, 2011

PGG Wrightson’s misguided attempt to buy into Silver Fern Farms last year cost the rural servicing firm $40 million last year.

Another unfortunate deal with the meat company has cost PGW $9.6 million and made a major contribution to its $30.7m loss for the year to June.

In 2009, the company entered into a 10-year supply contract for livestock to Silver Fern Farms. To the extent that the company was unable to meet the annual agreed level of supply, in certain circumstances it was required to make a payment to SFF related to the shortfall.

Due to the level of supply and current livestock market trends, a provision of about $9.6 million had been made, representing the best estimate of PGGW’s expected liability for shortfall payments over the remaining contract term.

Stock agent’s are supposed to get the best deal for their clients. They can’t do that if the company they work for has tied itself to one meat company.

The huge loss of lambs after the snow storm last year combined with increased demand and much higher prices would have made it a difficult season for PGW anyway and the deal with SFF compounded its problems.

PGW’s loss has been SFF”s gain again.

SFF was on its knees before Craig Norgate led PGW’s merger bid. The penalty payments when that deal collapsed helped the meat company back into the black last year.

We’ll have to wait for SFF”s results to discover the importance of the amount PGW contributed to its bottom line this year.


Rural round up

November 27, 2010

Family’s living proof of sheep farming viability – Neal Wallace in the ODT writes:

Given the sheep industry’s well documented problems, labelling yourself specialist sheep farmers might not be considered the most inspiring of titles, but it is one the Alderton family wears with pride.

They are living proof sheep farmers can make money and be profitable by balancing business, animal and environmental factors.

The key, according to Ron Alderton, was attitude and determination.

Blunt chat puts station on new path – Jackie Harrigan in Country-Wide writes:

You would think it a brave man who told a new farmer-supplier with 30,000 lambs that his lambs weren’t really up to scratch.
That farmer might be tempted to tell the meat company to take a running jump – but to Ren Apatu, managing director of Ngamatea Station, 28,000ha of wild tussock and improved high-performance pastures on the Napier-Taihape road, the comment was a seminal moment.
“We thought we were pretty clever, with that number of lambs, but the meat company said, ‘If you give us lambs like last season we really don’t want them’ – and we really hadn’t heard that before,” Ren says.
Even more of a revelation was being taken into the chiller and shown his lambs on the hooks, next to those of other farmers.
“There were our lambs, about 16kg with a big fatty pack of meat on their rumps, hanging next to lambs at about 25kg with no fat on them.”
Being told “this is what we want and this is what you guys are giving us and if you want to be a part of it you need to supply what we want” was a wake-up call to Ren.
“We were told – ‘Our markets don’t want fat, they want meat; we want high yield as well – its good for us and for you’.” . .

Cleaning up afte Norgate may be expensive – Chalkie writes in The Press:

 Craig Norgate is well gone from PGG Wrightson, but tidying up some of the messes created during his tenure seems to be taking time – and may involve a reasonable bill.

Here’s what the progress card to date looks like:

1. New Zealand Farming Systems Uruguay exited – a good outcome, sold above book but below cost, with a bonus $4 million for the management contract and a $19.2m receivable debt owed to PGGW due to be settled.

2. Tim Miles, the former managing director put in place by Mr Norgate has been ejected – but at what cost?

3. Fixing up the half-cocked exit from the wool business and associated creative accounting – work in progress.

New chairman Sir John Anderson comes with one of the finest reputations in New Zealand business, and certainly there seems to be decisiveness around the board table in terms of the sudden and immediate resignation of Mr Miles, who was rightly or wrongly seen as Mr Norgate’s right-hand man.. .

 

Sustainability’s like ‘beauty’ – go on try and define it. Peter Kerr at Sciblogs writes:

Sustainability’s a term that’s a bit like ‘beauty’ – everyone knows what it is, but pinning down exactly what it is, is often in the eye of the beholder.

However, NZ agribusiness better start getting a better grip on the actuality of sustainability, or risk being marginalised by overseas customers and consumers according to KPMG.

In a recent agribusiness green paper KPMG lays out the current and emerging environment in our markets on the vexed issue of sustainability, with a second paper to focus on the practicalities of implementing such a supply chain approach.

The report contends that while the term has broad meaning, in essence it is about meeting the needs of today, without adversely impacting on the needs of tomorrow, and in balancing environmental, social and economic concerns in doing so. . .


Norgate’s last stand?

May 3, 2010

The Press (not online) reports that Craig Norgate has given up on Rural Portfolio Investments, the parent company of Rural Portfolio Capital:

Norgate has essentially thrown in the towel on Rural Portfolio Investments . . . saying he cannot raise enough funds for the next dividend on the $60m of preference shares.

It is unlikely the preference shareholders will get the face value of that $60m investment back in the short term and the market has already priced in a much lower return.

The security for the RPC preference shares is 46.76m PGG Wrightson shares (which closed at 53c yesterday) and 10m NZ Farming Systems Uruguay (NZFSU) shares (41c) was well as $742,314 held in a dividend escrow account. . .

RPI and its financing subsidiary Rural Portfolio Capital are the investment vehicles for Norgate and the Otago-based McConnon family, and will very likely be wound down. . .

Norgate contributed to the McConnon family fortune when, as general manager of Kiwi Dairy, he bought Mainland Products from them. He’s now taken a large chunk of that away through his encouragement for them to invest in PGW.

He thought he could capture the rural servicing market by amalgamating Williams and Kettle, Pyne Gould Guiness and Wrightson. But farmers never bought into his plans and the combined market share of those companies fell from more than 70% to less than 50%.  PGW’s share price went from around $2. 80  two years ago to just 53 cents on Friday.

The decline of PGW provided opportunities for competitors Combined Rural Traders and new companies of stock agents set up by former PGW agents, including Hazlett Rural and Rural Livestock.

The only positives for PGW at the moment are the arrivals of Sir John Anderson as chairman of the company and former PGG general manager George Gould as a director.

One of Norgate’s biggest mistake was failing to gain finance for the purchase of 50% of Silver Fern Farms. While the financial meltdown has been blamed for this many farmers cannot believe how he ignored the fundamental basics of business which require securing funding before doing a deal.

His foray into dairying in Uruguay was big on promises but has yet to deliver. Share prices peaked at $2 and were at 41 cents on Friday.

From the outside, the investment in Uruguay looked simple. However, Norgate failed to take full account the challenges of farming in South America with language, cultural and political difficulties and a very different climate from New Zealand.

You only have to look  at the difficulties New Zealand companies have when investing in Australia, where at least the language, culture, banking and legal systems are similar, to realise that what works so well here might not  transfer easily to Uruguay.


Great mag & grubby kids

September 16, 2009

Young Country, the rural magazine which was launched earlier this year, continues to impress.

dairy 10006

The current edition profiles Anna Smith, who’s working towards a PhD in animal genetics;  Michael Short, the 2009 Rural bachelor of the Year; Craig Norgate and six young people who’ve made agriculture their career.

There’s advice on dog handling and the story of Sue Arthur the cheese maker at Over the Moon.

The cover story on Tim O’Sullivan who won the National Bank Young Farmer title this year was written by Kate Rivtett-Taylor. Her blog post on Getting Dirty caught the attention of Jamie McKay who had a chat about it with her on the Farming Show.


Finalists announced for Fed Farmers’ Agribusiness Person of the Year

June 27, 2009

Federated Farmers have announced six finalists for its inaugural Agribusiness person of the year Award.

They are:

  • Tom Henderson, Champion of the Environmental Award winning Opuha Dam
  • Jeremy Moon, Managing Director, Icebreaker
  • Craig Norgate, Chairman PGG Wrightson
  • Dr. John Penno, Chief Executive Officer, Synlait
  • Sam Robinson, Chairperson, AgResearch
  • Ben Russell, General Manager for Rural New Zealand, Rabobank

The finalists will be judged by an independent panel and the winner announced at Feds’ national conference next weekend.

My vote goes to Tom Henderson. He’s a grassroots farmer who led the development of the Opuha irrigation scheme.

As a result of that, the positive agricultural, environmental and recreational impacts of the Opuha Dam have transformed South Canterbury and made a significant contribution to the national economy.


It could be a long wait

October 15, 2008

PGG Wrightson is waiting for confidence and stability to return to world equity markets so it can get the funding to enable it to take a 50% stake in SIlver Fern Farms.

Chairman of the rural servicing company, Craig Norgate, said banks were on side but equity markets were not yet stable enough to secure the $110 million needed for its required first instalment of the $220 million half share in the Dunedin meat company.

“We are still committed to making it happen in the manner approved by shareholders. It’s just not easy at the moment.”

He was not sure how long it would take to secure the funding, as that was out of his control.


PGW visiting SFF tomorrow?

October 12, 2008

The grapevine suggests that Craig Norgate will be visiting SIlver Fern Farms in Dunedin tomorrow and is not expected to have the finance that would enable PGG Wrightson to take a 50% stake in the company.

This doesn’t mean Norgate is giving up on his plans for getting in to the meat industry, it’s possible he’ll have other options for discussion.


PGW & SFF fight to keep merger alive

October 6, 2008

Neal Wallace writes:

Obituaries may already have been written about what might have been with the Silver Fern Farms-PGG Wrightson partnership, but the parties are fighting to the end to keep it alive.

Silver Fern Farms (SFF) chairman Eoin Garden remained upbeat and optimistic on Friday that the $220 million deal could be salvaged, after it was faulted on Tuesday when PGG Wrightson failed to secure funding.

PGG Wrightson (PGG-W) chairman Craig Norgate said on Friday progress was being made.

But it’s hardly a vote of confidence in the plan when Pyne Gould Corp which has a 21.6% share in PGW didn’t take up its option and at the same time announced they’d be selling down their PGW stake to apply for a banking licence. The timing of this announcement is cause to wonder if they wanted the merger with SFF to go ahead.

Regardless whether PGG-W came up with the capital, Mr Garden said in an interview it was business as usual.

When they were trying to sell the merger plan to shareholders, SFF said there was no Plan B. But there is – the company has finance in place to carry on as normal.

SFF has had a good year but no doubt banks will be keeping a very close eye on all the meat companies in these uncertain financial times.

That will make business difficult because in spite of what they say about Sunday night auctions, competition for stock will be intense this season. The national sheep kill will be down by about 9 million which makes it a sellers’ market and companies will have to fight to retain their market share.


PGW delays SFF settlement

October 1, 2008

PGG Wrightson couldn’t have chosen a worse time for its first payment towards its 50% stake in Silver Fern Farms.

PGG Wrightson is blaming “extreme financial market conditions” for a delay in settlement of the proposed purchase of 50 percent of Silver Fern Farms.

PGG Wrightson chairman Craig Norgate said a number of banks which had committed to participate in funding the transaction had since been unable to finalise their credit approvals in time for yesterday’s part-settlement.

This is only a delay, but Norgate says it’s likely to take weeks rather than days to get the funds. The first payment of $145m was due yesterday, the second of $75 is due next March.

Jamie McKay’s interview with Norgate on the Farming Show is on line here.


What’s in it for Wrightson?

July 28, 2008

Farmers may not be sure how much they will benefit if Silver Fern Farms accepts PGG Wrightson’s offer to take a 50% stake in the company and one of the reasons is questions over what’s in it for Craig Norgate and PGW.

In the past year, the Auckland businessman with his wealthy Dunedin backers Baird and Allan McConnon have, via the rural servicing company PGG Wrightson, invested in the ailing wool and velvet industries and this month caught everyone by surprise by adding the equally vulnerable meat industry to their portfolio.

Investment capital has been rare for these three sectors and the returns far from guaranteed, so why is Mr Norgate pouring in money and assets?It certainly is not philanthropy.

Publicly, his reasoning is that if sheep and beef farmers are doing well and are more viable, they will spend more with PGG Wrightson (PGG-W), a view which has some validity. But there is also a view that it would shore up PGG Wrightson, where its livestock and wool divisions in particular were losing market share in the face of stiff competition and declining volumes.

Livestock traders established after Pyne Gould Guinness merged with Wrightson have eroded PGG-W’s share of livestock broking, while the South Island rural retail co-operative CRT last year reported a 20% increase in revenue, which many believe came at the expense of PGG-W stores.

PGW’s loss of business to its competitors might be even worse if the grape vine is correct about the number of people who are showing their opposition to the proposed investment in SFF by taking their business elsewhere.

In the deal with Silver Fern Farms (SFF), PGG Wrightson would be responsible for procuring stock to the meat company’s requirements, a role stock firms have been largely locked out of in recent years as meat companies favoured their own stock drafters.

For that role, PGG-W would be paid a commission which would boost revenue but also potentially give it access to new clients.

But SFF has said PGW wouldn’t be commission agents – bound to get the best price for the vendor – they’d be procurement agents working for SFF.

The SFF deal would be not a money-making venture in its own right. PGG-Wrightson would share in half the profits, but Mr Norgate described those as “large enough to wipe your face”.

The main benefit would be growing equity and share price in PGG-W, but if successful it could turn around ailing industries which generate nearly $6 billion in exports.

There is a view that what is needed is someone from the outside. Equally, there were those who see Mr Norgate as an opportunist, picking up major agribusiness assets for a song.

The value of SFF as measured by the PGG-W offer has been contentious, with some shareholders feeling $220 million for a half share of a company with a $2 billion turn over was too little.

This view was on the back of widespread belief that the meat industry was about to enter a prosperous period on the back of food inflation and soaring demand for meat protein from new markets such as China.

Maybe it was too little, but the capital-starved and debt-laden company was hardly in the strongest of bargaining positions.

But one of the reasons for lack of capital is because SFF capped shareholding to retain equity amongst supplier shareholders. It is difficult to understand why it was inequitable for farmers to have a bigger share in their own company when SFF is now prepared to allow outside investors to take a 50% stake in it.

There is a view among observers that Mr Norgate was satisfying an ego, an ego that was dented when he was pushed from the top job at Fonterra.

But his is not an artificial ego but one, many said, that was firmly grounded by intelligence, vision, ability and the capacity of seeing the bigger picture and relating that to people from all walks of life.

If anyone can pull off the SFF deal, many said, it would be Mr Norgate.

The agribusiness sector is all about personal relationships and the approachability of Mr Norgate will be the key if he is to succeed. But, of more importance, he has to take and retain key staff with him, those who deal with farmers on a daily basis.

That is half of the equation, and the grapevine suggests that neither PGW nor SFF agents, the ones who work with farmers, are yet convinced about the merits of a merger. The other half of the equation is the 75% of SFF shareholders who have to vote for the proposal if it is to succeed and that is a very high hurdle.


New era or just paying SFF’s debt?

July 6, 2008

If debt is not behind this deal, than why would a cooperative want to invite into the fold a company like PGG Wrightson, a public company dominated by two major shareholders?

The question comes from Jon Morgan.  His answer follows:

 The spin merchants for Silver Fern Farms and PGG Wrightson are hailing their merger proposal as the dawn of a wonderful new era in the meat industry.

 Well, they would say that.

They may be right, but here’s an alternative view. Some industry observers feel the deal is more about Silver Fern (formerly known as PPCS) finding someone to pay its debt.

Under the deal, PGG Wrightson will pay $220 million for 50 per cent of Silver Fern, a cooperative owned by 9000 farmer shareholders.

In October PPCS posted a $40 million loss but was back in the black this year with a first-half profit of $11.2 million. Though it expects to make big savings from plant closures it still has to find the money to pay for them – the recent Oringi shutdown is costed at $12 million-$15 million alone.

Silver Fern’s immediate concern is to make sure its accounts are passed for the financial year ending August 31 and it has to show the auditors that its bondholders are secure. Two tranches of bonds are in the market – $50 million to be repaid next March and $75 million due in December 2010.

Though this deal with PGG Wrightson would not be approved by shareholders till September it may be enough to cover any auditors’ concerns.

The debt goes back to the costly Richmond takeover, achieved after a long and bitter battle in 2004, and has been exacerbated by Silver Fern’s failure to make any money for the past three years.

If debt is not behind this deal, than why would a cooperative want to invite into the fold a company like PGG Wrightson, a public company dominated by two major shareholders?

That’s the cynic’s view of what the deal will do for Silver Fern. What will it do for PGG Wrightson? Well, here you have to bear in mind a long-term view of the industry and remember that the man at the top of this company is the entrepreneurial Craig Norgate.

If you regard him as the new Ron Brierley, as Sir Ron’s old mate Sir Selwyn Cushing does, then you could look on this deal as the opening gambit of a power play. After winning control of the Silver Fern boardroom his next move is to lure the other South Island cooperative, Alliance, into a merger, during which he will allow his company to be bought out at a handsome profit.

If Alliance spurns such blandishments, he could launch a takeover instead. That’s much harder to do if the shareholders don’t actually hold tradeable shares. But Alliance is troubled by a dwindling supply of stock in the dairy-rich deep south and would be hard-pressed if a procurement war broke out.

He has a third option: to stay in a new Silver Fern- Alliance company and await further opportunities down the road. And they will come. There’s a mood for change in the industry – the failed Alliance mega-merger plan at least showed that the other meat companies were willing to talk about restructuring. It’s so much more painless when you can rationalise – meaning close meat plants and lay off workers – if you can do it in concert.

Before all this can happen there’s one immediate hurdle to jump. It’s a pretty big one – 75 per cent approval of Silver Fern’s shareholders. Almost all will be South Island farmers, a pretty fractious bunch of late.

They’ve been upset about Silver Fern’s prevarication over the mega- merger but now they know why. Maybe they’ll see the intervention of Mr Norgate as the price they have to pay to get the merger back on track. But then, losing control of their company for $5 extra a lamb may be too high a price for them. Time will tell.

Of course, Alliance could launch a pre-emptive strike and make a rival offer for Silver Fern. That would give the shareholders something to really think about.

The possible ramifications of this deal are enough to make your head spin. Another is the procurement situation. Combined, Silver Fern’s and PGG Wrightson’s stock-buying workforce will be more than 350. Will there be enough work for them all? And what about the contracts that PGG Wrightson now has to procure for other processors, such as Bernard Matthews and Progressive? The company says it will continue to fulfil them, but what happens when stock is in short supply? Its priority will surely be the company that it owns half of.

Stock throughput is any processor’s lifeblood. Bills have to be paid. Silver Fern’s debt will be transferred to PGG Wrightson’s balance sheet, but it will borrow to fund the deal and will need the cashflow.

Another issue for the wider industry is the trust it now has in Silver Fern. All the big companies, along with Meat & Wool New Zealand, backed the Meat Industry Taskforce, set up to find a strategy for an industry beset by tough trading times. The taskforce collapsed late last week when it lost the support of a key player, publicly unnamed but widely believed to be Silver Fern.

It would be unsurprising to find the other members of the taskforce do not hold Silver Fern in high regard. Which could be a problem for the industry’s hopes for expanding meat sales outside the main markets of Britain, Europe and United States. This depends on cooperation, but Silver Fern has not been very cooperative lately.

Again, Mr Norgate may be key to resolving this. His business acumen is widely admired by the companies.

If he decides to make a long- term commitment to the new-look Silver Fern he could smooth over the hurt feelings.

A lot depends on him. Is he there for the long haul or just passing through?

He says it all.


Silver Fern Farms PGW Plan Not Silver Bullet

July 1, 2008

The proposal for PGG Wrightson to take a 50% stake in Silver Fern Farms is not a silver bullet for the meat industry and initial reaction to the concept isn’t very positive.

… yesterday’s announcement went down like a “cup of cold sick” with shareholders, who fear farmer-ownership of New Zealand’s largest meat company will be diluted.

Mossburn farmer Stephen Cullen said he was “bloody shocked” that Silver Fern Farms wanted to effectively sell its soul to outside interests and alienate itself from the rest of the industry.

Farmers feel very strongly about retention of farmer-control in the processing industry.

Meat Industry Action Group chairman John Gregan said he was “staggered” that PGG-Wrightson wanted, what he believed, was a controlling share in Silver Fern Farms.

“There’s no doubt the current structure is failing us, but the loss of farmer shareholding will be a sore point for some,” he said.

Mr Gregan believed it would be a “big ask” to achieve the 75 percent voter threshold required to advance the partnership.

MIAG has gathered proxies from SFF & Alliance shareholders to call a special general meeting of both companies aimed at getting the two comapnies together. I don’t know whether the proxies will enable MIAG to vote on the SFF PGW deal as well.
Federated Farmers Southland meat & fibre chair Martin Hall agreed the 75% would be difficult and farmers would have to dedecide whether they wanted to be an owner of a meat company or just a participant.

“I’m a bit angry about it. They (Silver Fern Farms) didn’t dream it up last month. It takes a long time to put together something like this.”

MIAG is meeting SFF chair Eion Garden today. One of the questions they could ask is: why SFF let the Meat Industry Taskforce waste time and money starting the process of developing an industry strategy when they SFF must have already been planning the deal with PGW?

Garden believes shareholders will support the initiative becuase of the immediate benefits.

The new board of SFF would decide on the use of the $220 million, but a sizeable chunk would go on the upgrade of existing processing plants, including the use of robotic meat-cutting systems developed between SFF and Dunedin’s Scott Technology.

“This industry is starved of capital.

It’s one of the fundamental reasons we don’t have strong balance sheets and strong profits on a long-term basis,” Mr Garden said.

He is right that lack of capital is a problem, but it’s not the only one. The drastic drop in sheep numbers has resulted in an over-supply of killing space so whether or not the deal goes ahead there will be more works closures.

The other problem is marketing and SFF & PGW say more money would be spent on researching customers and stronger branding of New Zealand meat. But they also say the money won’t be used for reducing debt and high debt is one of SFF’s big problems.

I haven’t spoken to anyone who is wildly enthusiastic about the plan yet but perhaps I’m talking to the wrong people. The ODT found a more positive reaction from Otago Fed Farmers meat & fibre chair Rob Lawson because it involved Craig Norgate.

I am cautiously optimistic. I can see some really positive things, and one of those is the business acumen of Craig Norgate and the PGG Wrightson team.”

Other factors the Merton farmer saw as favourable were the injection of $220 million from PGG Wrightson; the move to an integrated supply chain linking consumers with farmers; the potential for industry rationalisation; and the market focus the investment would encourage.

All these are fair points and there is no doubting Norgate’s abilities, nor his powers of persuasion. If he fronts a road show to sell the concept he may be able to change the minds of at least some of those who aren’t enthusiastic about it.

The loss of total farmer control of SFF was a possible concern, but Mr Lawson said farmers had to ask themselves what farmer control of the meat industry had achieved so far.

That’s a fair question but as Fonterra found when they tried to persuade their shareholders to open up the company to outside investment that farmers aren’t keen to lose control.


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