In response to the latest fall in milk prices, Fonterra is providing loans to its members. A global leader in dairy nutrition, Fonterra is a farmer owned co-operative based in New Zealand, and the largest processor of milk in the world.
Farmers have until 25 September to apply for loans, which they can repay either in full or partially at any time. No security is required over their shares or any other assets. The co-operative’s chair, John Wilson, said Fonterra was well positioned to help its farmers.
“Being able to help our farmers is all about standing together as a co-operative and using our collective strength to get through these tough times,” he said. “We have had a lot of interest from farmers who appreciate what the co-operative is trying to do for them to assist them with their farming businesses in a tough financial climate, and we are anticipating a large number of applications.”
Farmer shareholders can apply for a loan of 50 cents for every kilogram of share-backed milk solids produced from 1 June to 31 December 2015. The loan is interest free until 31 May 2017, after which they may have to pay an interest to Fonterra. Farmers will repay it via their milk payments and automatic repayments will occur when Total Advance Rate Payments exceed $6.00.
“Global dairy prices continue to reflect the imbalance between a surplus supply of milk, and weak demand. This is a global issue affecting the international dairy industry, and one with which dairy farmers globally are grappling,” said Mr Wilson in Fonterra’s monthly Global Dairy Update. “We are now seeing evidence that farmers in the major milk production regions – including New Zealand – are beginning to respond to the low milk payments by reducing their volumes.”
Farmer members can apply online for the loan at nzfarmsource.co.nz, or by email, fax or post.