KEY POINTS:
Fonterra's preferred capital restructure was unveiled in November with great fanfare, nationwide meetings and satellite link-ups.
And yet at the first hurdle the horse has refused to jump.
The board's choice of structure would create a company for all assets which would then be listed on the stock market.
The restructure process planned to use two votes, with the first in May to create the new asset-holding company.
However, the board pulled out of the first vote yesterday knowing it would fail because of farmer concern about outside investors.
Fonterra has yet to deal with key concerns including how returns to milk producers and investors will be balanced.
The two camps can be opposed, with farmers wanting to maximise milk payments but investors wanting greater dividends by paying less for raw material.
The capital restructure is designed to provide capital for global growth, tackle redemption risk and provide greater choice.
However, yesterday it was acknowledged that choice was now considered less important, while some farmers are not convinced the company needs to change in the first place.
Farmer concerns are understandable considering the long history of the co-operative and this season's record forecast payout of $6.90 per kg of milksolids.
It is a big responsibility to be the generation that sets the industry on a new path, while the feelgood factor over payouts may be just a little too good to help the cause for radical change.
The plans were also unveiled at the peak of a season which for many farmers soon turned into a drought. Not a good time to press someone to make a fundamental decision.
People who have doubts, or lack information, or have not fully considered the options tend to vote status quo. Better the devil you know.
Pulling the first vote was obviously not the plan but doing it early keeps Fonterra in control.
The board is still backing its preference but is putting its hand up for much greater discussion before any final vote in 2010.
Many farmers felt if the first vote was passed they were already committed to the second vote, making the first ballot a step too far.
It looks like farmers are not setting off on the journey until they know exactly what the destination looks like.
