Chilean dairy farmers threaten to break away from New Zealand owned Fonterra Milk Company

Post available in: English

Disgruntled Chilean dairy farmers have threatened to stop supplying Fonterra because they say they are being underpaid for their milk.

The dairy giant has a 86 percent ownership stake of processing company Prolesur, but some small farmers in southern Chile who supply it are unhappy with their treatment.

New Zealand dairy consultant Mike McBeath, who is chairman of Chilean company Chilterra, said it was looking to combine with about 200 farmers to create a rival co-operative.

In the last nine years, the Soprole/Prolesur conglomerate has declined from being the number one dairy company in Chile with 25 percent market share to second ranking with 19 percent share and still dropping.

It is being outperformed by local co-operative Colun, whose milk supply has risen to 27.4 percent.

A Fonterra spokeswoman said the “slight decline” in supply followed Prolesur moving away from winter bonus payments, as it encouraged farmers to stick to a pasture-based farming model.

Prolesur’s strategy promotes a pasture-based feed system in order to achieve sustainable and globally competitive milk quality.

Fonterra in New Zealand pays its farmers about NZD 6.00 per kilogram of milks solids, down from $6.50 last year. The spokeswoman said the payment systems were not identical, so should not be compared like-for-like.

In 2016 Fonterra got offside with dairy farmers in northern Chile whose milk was collected by Soprole. They accused it of refusing to take their milk in favour of sourcing it from large suppliers.

“It would  appear they don’t want to pick up small farmers’ milk – but over there it’s a different ball game, a small farmer has between five and 30 cows,” McBeath said.

Chilterra has attempted to introduce Kiwi dairy systems into Chile. The company is managed by Chileans with New Zealanders providing the technology, training and know-how and moral support.

Traditionally farmers have modelled their practices on European and North American systems but over time Chilterra has aligned its cow herds to spring calving whereas most farms calving is year round.

Despite its Chilean issues, Fonterra increased its 2018 before-tax profit in Latin America to $117m, up from $98m the year before. It employs over 4000 people worldwide at seven manufacturing sites and has revenue of NZD 2.27 billion.

Source: Stuff[amazon_link asins=’B075SKPSVH,1457550369,1502490773,1603585001′ template=’ProductGrid’ store=’gatewaytosout-20′ marketplace=’US’ link_id=’5a09cda5-fbe3-11e8-a7b3-47395f81d482′]

(Visited 569 times, 1 visits today)

About Gateway to South America

Established in 2006, Gateway to South America began as a single office in Buenos Aires. Since then, it has grown into a vibrant regional network, providing professional real estate marketing services to clients in Argentina, Brazil, Chile, Paraguay, Peru, and Uruguay. If you enjoy reading our news site, please share it on your social media!

Want an edge on investing in Latin America? Get our Investment News first: Join 39,400 subscribers without cost to our English, Spanish or Portuguese posts for the latest real estate news in LATAM useful for new and experienced investors. Please note, this subscription is for Investment News only, not properties for sale.

Post available in: English

0 POST COMMENT

Make a comment on this post

Your email address will not be published. Required fields are marked *

Real Estate and Investment News from South America
Visit us on LinkedInVisit us on FacebookVisit us on TwitterVisit us on Pinterest