Fonterrra the milk co-operative New Zealand will allow non-farmers investors to buy into the firm. Fonterra is trying to raise 500 mm NZD through a share class offering that will price next week. The interest is very strong for this offering which will not have nay voting rights but an economic interest in cash flows.
Fonterra is the 800 lb gorillla of the milk industry and has changed the way bsuiness is done even in the US through its global auction process. Dairy represents 25% of New Zealand exports with inroads all around Asia as well as Latin America and the rest of the world. Milk prices are high in the US but volatility is high. A slowdown in growth or more competition will have a strong impact on this industry. The days of family farmers providing milk to the world are gone.
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