BUSINESS WEST COAST
Frano Volckman, Karamea dairy farmer.
Cash flows following Yili purchase Words and photos by: Anne Hardie
A
year can make a big difference in dairying, especially on the West Coast where a lump sum for shares and a healthy payout has kickstarted the industry and lifted the mood among farmers. When Chinese dairy giant Yili bought their flailing co-operative, farmers had gone through years of low payout, leaving little money to spend on debt and infrastructure. They lost their co-operative when they voted to sell Westland Milk Products to Yili, but it was an opportunity they couldn’t refuse. A generous share payout of $3.41 per share and a guarantee to match or better Fonterra’s payout for 10 years was a life saver for many. Today, they have reduced debt, have 22
money in their pockets and are spending on infrastructure that has needed upgrading for so long. Last year was a good first year under Yili ownership because the payout was so good. Frano Volckman is a Karamea dairy farmer and chairs Westland’s supplier committee who says West Coast farmers are in a better financial position and have cash flow that has enabled them to simply enjoy farming again. Like many West Coast dairy farmers, Frano and his wife, Kylie, used the share payout to pay off farm debt as volatile payouts from Westland over a number of years had led to banks wanting more security in the industry. Psychologically, the Yili financial boost has had a huge positive effect on West Coast farmers and in general he says
people are “pretty happy now”. “Before, it was tough and frustrating – demoralising seeing farmers in other regions getting more. We had an underperforming dairy factory and a limited amount of light at the end of the tunnel and it became clearer and clearer that the writing was on the wall and something had to change. “It would be nice to be a co-op and doing well, but the reality was it wasn’t doing well. Now we’re seeing the returns on the work we’re putting in and that makes people happy. When you’re getting a decent payout for the product you’re producing, it’s better for your mental health.” Ten years’ guaranteed payout on par with Fonterra finally puts West Coast farmers on an even playing field and he says that will
Dairy Exporter | www.nzfarmlife.co.nz | January 2021
