The Phillips have been with Fonterra since it formed, and Michael says the thing he values about being part of the Co-operative is that as owner/shareholders they have the ability to vote and exercise rights, to meet and have their voices heard.
"We have to outlay quite a bit of capital for that, but it keeps us tied in and in control of the business to a certain extent, with a wider group of farmers. That’s important to me."
And with Fonterra’s new strategic plan in place, Michael feels that the return on investment will be there when he needs it in future. He recently attended an Understanding My Co-op event, which he says solidified his understanding of the business and where it’s at, where it’s going and why it’s doing things the way it is. Recent changes to the shareholder structure, mean he now has the ability to move equity around based on the needs of the farm.
Michael is supportive of the direction the Co-op is moving in with regards to meeting environmental and milk quality targets, and says the Farm Insight Report and three-tiered system laid out in The Co-operative Difference Programme are helpful tools.
"This is a good thing. There are many different layers of expectation on farmers from Fonterra, the council and the public. We do find it difficult to deal with those pressures. But when you pull yourself out a bit and look at things strategically, I am pleased Fonterra is pushing us that way and has a mechanism to produce outcomes transparently. So when Nestle and other customers are buying our products they know that we meet these standards.
"We do currently have a competitive edge because of what we do on farm and because of what Fonterra does over and above that. We sell our milk at a premium for that."
"It’s nice to know Fonterra is still pushing on those things to hold that premium, because if we back off we are going to be left behind. We are ahead of the game but we need to keep working hard."
This year Michael is working with Fonterra to trial changes on-farm to minimise GHG emissions. The intention is to share learnings with other farmers and the broader dairy industry.
With Fonterra’s support, he feels more enabled to deal with the many situations farmers now face. The sheer scale and speed of change, plus the money required to adapt and handle it, is "scary", he says. "Not being in a co-op and having that support, I’d be nervous."
Michael says the business has entered into a new, more outward looking phase, in which he wants to work more in partnership with the Co-op and other stakeholders to help strengthen dairy farming going forward. In particular, Michael and his team are focused on being a leading producer of food, energy, natural capital, and skills.
Success starts with your farm.
If you’d like to talk to us about your relationship with Fonterra, we’d love to hear from you. Please reach out to your local Co-operative Services Area Manager.
Or if you’re considering joining Fonterra, organise a catch-up with one of our team.