Fonterra released a statement announcing the changes to the preferred option it is currently considering to its capital structure. Fonterra chairman Peter McBride said the Board believed that changes made as early as possible would put the cooperative in the best position to provide farmers with more flexibility, particularly in a flat or potentially declining milk production environment.

Currently, the board is considering setting the minimum shareholding requirement at 33% of milk supply, rather than 25% as originally set out in the preferred option as well as enabling sharemilkers and contract milkers to hold shares if Fonterra moves permanently to a farmer-only market. The board is also considering extending both entry and exit timeframes and reviewing the market maker role, looking further at how potential share buy-back options might support liquidity in a farmer-only market.   

McBride said the board will provide more information in August and September on Fonterra’s long-term strategy including which types of activities Fonterra will invest in, which returns the coop is targeting and the measures against which it will track progress.