Bonlac milks interest from Kiwis

By PHILIPPA STEVENSON agricultural editor

The New Zealand roadshow by Australian dairy company Bonlac promoting dairy farming across the Tasman has attracted more interest than expected.

Melbourne-based Bonlac, a quarter owned by Fonterra, started its pitch to farmers in Whangarei last Monday. By the end of the week it had worked through all the North Island's dairy regions.

Meeting attendance ranged from 25 to 65 and the higher figure was well ahead of anticipated numbers, said Bonlac spokesman Graeme Milne.

Mr Milne is a former New Zealand Dairy Group chief executive who served as Bonlac's chief operating officer for seven months last year, until the company appointed new managing director Peter Myers.

Bonlac's move has been criticised here as a poaching exercise, at a time when New Zealand farms are struggling to find skilled workers.

But Mr Milne said the exercise was a response to the many requests the company received from Kiwi farmers wanting information about Australian dairy farming.

"We are not campaigning for supply. We are responding to the fact that there are many New Zealanders looking to Australia to advance in dairying," he said.

"We find Kiwis calling in who are probably not as knowledgeable as they could be."

Hundreds of Bonlac's Victorian and Tasmanian suppliers have quit the company for its competitors in the last two years after financial troubles affected farmer payouts.

Last year's deal with the Dairy Board - now Fonterra - included a cash and asset injection of $A220 million ($267.4 million), which helped reduce Bonlac's debt.

Bonlac is Australia's second largest dairy manufacturer and exporter with sales of around $1.5 billion. Leading brands include Bega cheese and Western Star butter.

Mr Milne said farmers at the roadshow were told the company had experienced a tough three years but that Fonterra's investment, combined with restructuring, had cut debt. The company's payout was now ahead of rivals.

"We just say, 'If you are going to Australia, you need to make up your mind where you are going to look because it is a big country, [and] the greatest opportunity is in the Victoria-Tasmania area'," he said.

Australian farms cost half to two-thirds less than in New Zealand. Land for converting to dairying was available for between $A600 and $A1500 an acre. Existing farms ranged from $A2000 to $A3000, and with irrigation up to $A4000 ($4860).

Depending on location and soil type, New Zealand farms have sold for between $9000 to $13,000 an acre.

Mr Milne said another big plus across the Tasman was that there was no requirement for farmers to buy shares in the company.