Farmers are worried they could miss payments worth $30m after NZ Dairies went into receivership yesterday.
The Russian-owned dairy company, which has produced milk powder from a factory in Studholme near Waimate since 2007 has been under a cloud following the collapse of its parent company, Nutritek, into bankruptcy earlier this year.
Farmers who supply the factory said the company had never missed a payment, but those spoken to this morning were concerned that the timing of the receivership could be linked to a major payment due on the 20th of each month.
On Sunday, NZ Dairies is scheduled to pay its 37 farmer suppliers for all milk sent to the factory in April, as well as another 15 cents for every kilogram of milk solids produced in the 2011/2012 season.
One supplier, who asked not to be named, said farmers had calculated that this could add up to as much as $30m in total.
The company has called a meeting with suppliers at 1pm today to explain the situation and farmers are expecting to find out if they will be paid then.
Receiver Colin Gower could not be reached for comment.
Ian Moore, a spokesman for the farmers who supply milk to NZ Dairies, confirmed that farmers were due a substantial payment this weekend and admitted he was concerned about the immediate prospects.
''I'm the sort of person who expects the worst, hopes for the best, and is never disappointed, but my gut feeling is, it won't be good news."
His main concern was for sharemilkers (who typically own only the cows and share in the milk cheque) who have no equity to fall back on.
Moore has already been in contact with rural bankers from the area who he hoped would turn up to today's meeting and support the affected farmers, to prevent ''anyone from going to the wall'' if payments are delayed or do not come through.
Questions have surrounded NZ Dairies for some time with reports of a bleak outlook and a long expected sale failing to materialise.
Moore said he had met potential buyers from within New Zealand and from China who appeared genuine in their interest, but a deal was never able to be struck with the Russian owners.
Given the troubles of NZ Dairies' owner and the ongoing questions locally, Moore said he welcomed the receivership.
''It had to happen and they're doing the sensible thing to bring it to a head,'' he said, adding that he believed the receivership could help a sale of the company materialise.
- © Fairfax NZ News
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