Farmers Get the Cream

Fonterra recently announced the sale of its consumer and associated businesses (Mainland Group) to French dairy company, Lactalis for $4.2 billion. The sale is set to be a windfall for New Zealand farmers. Fonterra will return $2 per share (tax free) to farmer-shareholders—totalling $3.2 billion, about a 20% boost to on-farm revenue at a time when milk prices and farm profitability are already near record levels.