Volatility 'is here to stay'

SUE O'DOWD
Last updated 07:55 15/11/2012

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Fonterra board of directors candidate Grant Cochrane is on the campaign trail in Taranaki.

The north Otago farmer spent three days this week talking to the province's dairy farmers.

He is a director of Dunedin- based Oritain Global, which won a New Zealand Innovators Award this year and which provides a scientific service to trace food.

Cochrane said the company certified the origin of products like milk, meat, wine and honey.

A supporter of Fonterra's new capital structure, Trading Among Farmers, he said the company's challenges now lay overseas.

"Extreme volatility is a major threat to the business and the company should be positioned to manage that," he said. "Volatility is here to stay, likely to increase, and will continue to have an impact on farmgate returns."

Fonterra had to manage that risk and farmers should continue to adopt conservative budgets.

Forecast growth in demand for dairy products was set to outstrip supply, so the future of dairy farming remained positive.

Cochrane said farmers were nervous about how TAF would work and what effect it would have on the payout. TAF was a natural evolution for the co- operative, but it was essential farmers retained control.

A currency trader for 11 years to finance the purchase of his first farm, he said his financial skills and commercial expertise were attributes that would be of value to Fonterra's board of directors.

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- Taranaki Daily News

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