Silver Fern Farms money raising a thinly veiled glossover of Richmond fiasco

You have to feel for SFF shareholders. Now CEO Keith Cooper is asking them to stump up with $128 million, apparently in the name of forward progress in the UK consumer market.

Their hard fought co-operative, designed to protect their interests is fast becoming what they term a 'hybrid co-operative'. The translation for that is a co-operative moving away from what it was designed for and if this share restructuring goes ahead you would have to assume that it is only a matter of time before outside shareholders gain some status in the company, even if Cooper is promising that won't happen now.

But why do the restructuring in the first place?

Overcommitment.

First SFF tries to wrangle the money out of PGG Wrightson, now it's talking all this lovely juvely touchy feely rubbish about needing to be a 'fully integrated market-led company'. Come on, it all looks a bit desperate and more than a little co-incidental in the light of the lack of cash injection from the failed merger with PGG.

Wouldn't it be fantastic if the PR doctors just for once let go of the spin and spoke the honest truth. In SFF's case the statement would read something like this:
"SFF would like to advise that it is charging farmers an extra $128 million in shares and will be trying to find outside investors as well, due to the balls up it made several years ago when those in charge decided that SFF should buy Richmond at all costs. Because of this SFF has been in the poo financially for some time and as you know PGG Wrightson didn't end up joining the party so you, our loyal shareholders will have to foot the bill. But don't worry...we won't sell your co-operative rights down the road just yet...after all farmers are our business...and consumers...flashy UK consumers..."

Farmgirl hopes that SFF farmer shareholders voice their concerns over the restructuring as it is more than a little flawed.

It's funny isn't it how CEO's and directors are paid to go into a company and grow the business and make it financially stronger, yet end up making it bigger and weaker...think US companies answering to DC at the moment. The NZ example in agriculture is not as far apart from that as we might like to think...

SFF boss smart in getting PGG to help pay for Rissington...

It's just a little too much of a co-incidence...Keith Cooper and Silver Fern Farms takes PGG Wrightson to the cleaners after Norgate reneged on a merger deal but says the livestock company are still the preferred option for an integrated supply chain partnership option.

Now SFF has cosied up to Rissington in a new deal by merging livestock and marketing staff from the North Island genetics company into SFF, to provide advice and knowledge to lamb suppliers wanting to produce lamb to SFF's contract specifications. In short Rissington will take the place of PGG Wrightson.

The two companies have had a working relationship for several years, with SFF processing lambs for Rissington Marks and Spencer contracts so you have to wonder if SFF was really interested in seeing through a deal with PGG in the first place.

And the $25 million pay-out settlement from PGG would come as a handy deposit on the new acquisition wouldn't it?

As Farmgirl has said before, Keith Cooper is one of the shrewdest CEO's in the country. Perhaps the Pork Board should entice him to jump ship...

SFF backtracking on idiotic ban of dogs in sheep yards

Since a belated maelstrom has buffeted its way through the nation's media regarding the Silver Fern Farm decision to ban sheepdogs from its sheepyards, SFF have been in damage control.

No, they say loudly. At no time did UK supermarket giant TESCO demand the removal of dogs because of the stress it may cause the sheep before it ends up in a British housewife's roasting dish.

But since SFF had removed dogs from all but three plants this season, management decided to "minimise the use of dogs from all sites".

What balderdash as the shepherds at the Fairton works in Mid Canterbury would tell you. Farmgirl has been told on more than one occasion that it was a word in the ear by the TESCO machine that led to the demise of the poor old dog.

But TESCO's big brother bark has made news worldwide as many overseas identify with the plight of the endangered Kiwi shepherd and the demise of his dog, and is apparently rather sensitive to any criticism.

It was no surprise then that SFF should jump quickly to dispel the story but in their haste they forgot to remember one thing - shepherds talk, they see, they hear what is being said when the big wigs come to visit their yards. They are not blind, deaf and dumb mutes who issue the odd whistle and yell 'Get up there Bob!'. So SFF's claim that they just idly decided to rid their yards of years of Kiwi iconic history, at a time when consumers are becoming so divorced from the reality of food production, just doesn't ring true.

And to add further salt into the wound the Otago Daily Times reported this week that surprise, surprise, Lincoln University bio-chemist Prof Roy Bickerstaffe found the dogs created no adverse affect on PH tender rating levels in sheep.

Farmgirl understands that yard requirements often dictate whether dogs are needed or not and has not problem with that but when it is so clearly being done because of supermarket pressure it is a worrying sign as to what we will have to kowtow to next in order to get out product into the market.

Federated Farmers Meat and Fibre Chairman Bruce Wills is naive to think this is just a 'storm in a teacup'. What it signifies is important.

This could be the beginning of a game of dominoes.