Organic Dairy Hub Co-Op Ltd Structure

  • Development
  • Nature of Business
  • Voting & control
  • Capital
  • Commitment
  • Ownership
  • Management
  • Payment systems

Development

  • After the Fonterra announcement in August 2011 OrganicAg organised meetings open to all organic farmers in the affected regions.
  • Options were explored and considered. Material circulated to organic dairy farmers.
  • June 2012 an Organic Sector Forum was held in Taupo.
  • During the balance of that season further Hub meetings and development took place.
  • The Hub had a home for all milk off or coming off contract May 31st 2013.
  • Fonterra offered some of those farmers a contract in late April 2013.
  • Balance of farmers in southern regions offered in March 2014.
  • Hub not needed.>>>Development of relationship building continued.
  • Northland milk coming off contract with no offer created need--Hub reactivated spring 2014
  • Home found for all milk Oct/Nov 2014.
  • Fonterra offer Northland supply contracts Dec. 2014--with an ‘all or nothing’ clause.
  • The hub grow out of need not want—the base ideas were developed by consultation with farmers.
  • The Hub did meet the expectation of farmers bankers and accountants in 2013.
  • In 2011 Fonterra had 127 organic farms---2014 it has 74 ---2015 ?????
  • Fonterra have not as yet confirmed byway of offer the future beyond May 31 2015—4 months.
  • To date the Hub has been funded by OrganicAg with voluntary contributions from some farmers --- these to be set off against future shares/establishment fees.

Nature of Business

  • To operate as a Co-operative.
  • The brokerage of dairy farm out-put. Milk sold on forward contract.
  • To sub-contract rather than have direct responsibility.
  • The management of returns/quality/etc.
  • To facilitate joint ventures between Hub/processors/marketers and others.
  • To facilitate capital investment opportunities for individual farms & processors.
  • The management of growth in organic dairy.
  • Not to generally be involved in capital plant.

 

Voting & Control

  • To have an elected board (4 farmer, 2 independent), chair to be independent.
  • Board for policy and governance.
  • Staff (sub-contracted) for delivery.
  • Two tier voting system; unit of milk (1 per kg/ms) and farm entity (10 shares per entity)
  • Both votes required to effect change.
  • Votes can be split (cast some for and some against)
  • Constitutional change 75% of both.
  • General issue 66% of both.
  • Vote validation; general 66%,constitutional 75% of eligible vote needs to be cast.

Capital

  • Minimal!
  • Base buy in of wet or dry shares and establishment fee.
  • Wet shares; to supply milk.
  • Dry (linked to future supply)shares. To show intent & use services.
  • Shares may be paid over a delayed time by arrangement.
  • Shares repaid upon exit.
  • Establishment fee, one off payment, non-refundable.
  • No direct processing plant.
  • Capital base to secure cash flow options and business integrity.
  • No dividend. Paid by way of milk and other services.
  • Defined uses; board limited to %age of capital used as security or other.

Commitment

  • Registration of interest.
  • Establishment fee; non-refundable.
  • Shares—refundable.
  • Commitment to ensure you have options in the future.
  • Foundation shareholders will receive on going benefits.
  • Your involvement.

Payment Systems

  • Milk payment; direct credit second to last business day month following supply. (90%??)
  • Monthly with Oct., Dec, March top up, June wash-up.
  • Paid in kg / Ms.
  • Equity between suppliers.
  • Statements to have industry standard look.
  • A net $4+- cash-in on Fonterra shares.
  • Cash flow advantages of payment system.

 

Organic Dairy Hub Cooperative NZ Ltd

 

farming for tomorrow

banking the profits today

Contacts

  Email us at: info@organicdairyhub.co.nz

   3 Waltons Ave, PO Box 760, Masterton 5810