Organic dairy co-op chief quits

The chief executive of fledgling New Zealand Organic Dairy Farmers Co-Operative, Patrick Geals, has resigned after the co-operative delivered less than half of its promised $7 per kg of milksolids.

The company is said to be going through growing pains as it grapples with whether to seek external capital or remain farmer owned.

Mr Geals left on March 1 and refused to be interviewed by the Waikato Times.

Co-operative founder and supply manager Russell Simmons, who promised the co-operative's 27 suppliers a $7 payout, also refused to comment.

Since Christmas, suppliers, including at least four Waikato farmers, have received $3.03 per kg of milk solids.

Fonterra's 10,500 farmers are expected to receive $6.05 per kg of milk solids this season.

One Organic Dairy Farmers Co-Operative supplier, who asked not to be named, said farmers had received the low payout after the company suffered cash flow problems.

"We are waiting for them to sell the cheese," the farmer, who had invested several hundred thousand in the business, said. "I am trying to run as fast as I can away from that co-op." He said Mr Geals had resigned after the board split over the issue of external capital. Some directors believed the co-operative should remain farmer owned, while others were keen on seeking external investors. The farmer understood both Open Country Dairy and a Chinese investor were in discussions over investing in the co-operative.

Open Country chief executive Mark Fankhauser said his company had no plans to invest.

"I have heard it all now.

"We know the New Zealand Organic Dairy Farmers Co-Operative  we support them at times by processing their milk and know they are going through some growing pains at the moment," he said.

Organic Dairy Farmers Co-Operative chairman Malcolm Campbell said the board met yesterday and was taking "solid advice" on the company's position." We are confident that we will have something to report next week," he said. Clyde Langford, managing director of Langford Holdings, which is contracted to pick up suppliers' milk with four tankers, described the New Zealand Organic Dairy Farmers Co-Operative as a new co-operative with a point of difference. He said the co-operative was up to date with its payments to his business. "I am satisfied that they are doing the best that they can in the situation," he said.

Peter Floyd, managing director of eCogent in Cambridge, who introduced some farmers to the organic co-operative, was not aware of any problems.

"One out of 20 or 30 have taken it up," Mr Floyd said. "I have not been talking to anybody from the co-op for three, four, or five months. I have not been talking to anybody in the management."

- © Fairfax NZ News