Rapid changes and sudden storms are not only a weather feature. Guy Trafford finds commercial pressures can inflict them on 'friends' too

The positive result achieved by Fonterra highlights the pickle that smaller cousin Synlait has found itself in. Synlait appears to have found itself on the wrong end of its relationship with a2 Milk.

a2 Milk are saying Synlait hasn’t met the terms of the contract, they said the cancellation was due to Synlait’s delivery in full and on time performance during the 2023 financial year falling below the level required for Synlait to maintain such exclusive rights, primarily in relation to English label infant formula product. Not surprisingly Synlait are disputing the claims.

Some commentators have said the issue is more about the falling demand in China and a2 Milk’s need to get their Mataura plant into profitability. At the moment Synlait holds the Chinese regulatory licence for A2 Milk’s Chinese labelled infant formula for stages one, two and three, and it expects to continue to manufacture those products for the Chinese market for the period of the licence, which expires in September 2027.

So, unless a2 Milk has another ace up their sleeve things shouldn’t change dramatically overnight.

a2 Milk currently already holds over 19% of Synlait shares and some have speculated that they may be positioning themselves for a buy out of Synlait. Given the poor financial position Synlait has found itself in in the last year or so, this outcome should not be ruled out. It certainly looks, despite the outcome of Synlait’s appealing a2 Milk’s claims, that the relationship between the two companies seems to have reached a pretty unsalvageable stage and what started as a win-win for both companies seems to have gone right off the rails. What this has done is to show the vulnerability of manufacturers to both markets and those above them in the chain. The same could also be said applies to producers (farmers) on their reliance on processors honouring their contracts to purchase and pay fair prices to suppliers. Hence the importance of our Co-ops.

Sticking to areas of influence on markets and suppliers etc, when I opened my browser this morning I was met by the ‘news’ that Cher puts down her good looks and ability to ‘age well’ to her diet and the fact that she stopped eating dairy products over 40 years ago. She’s quoted as saying, “Dairy products are not good for us”. When you dig a bit deeper you find she has been saying much the same thing over a number of years and this is not a recent announcement. It gets even more flaky when a link takes you to a story that she is starting a new gelato brand (Cherlato) and yes using dairy products. Despite this where the concern arises is due to her celebrity status the ‘story’ of dairy being bad is repeated on a large number of widely distributed news outlets. The disappointing thing from all of the rerun articles was the lack of science and any refuting of the ‘facts’ she was peddling. Much media promotes popular but dodgy 'opinion' stories without fact-checking.

On a different tangent, having just returned from a short sojourn to Fiji with family I was expecting to be greeted by cooler South Island weather when leaving the airport recently. Instead we have been enjoying 23-24 degree days, although the strong nor-westerlies have been a reminder of the approaching El Niño weather patterns. The first irrigators in Canterbury were already operating in the first week of September, largely precautionary I believe, but showing farmers are trying to keep ahead of the impending dry ahead.

The first early fires of the season reinforced this view with several nearby, plus the Pukaki and Tekapo fires to drive home how dry things were becoming.

So, with the thoughts of drought to the fore it has been a bit of a difficult reset as we now are experiencing some of the heaviest rain for some time; months here, years for Queenstown and parts of Southland. Apart from the damage inflicted on those further south and the losses experienced by those later lambing, who have done all the right things to try and avoid such events, nature has once again shown us we really don’t know anything.

And while we can try and play the odds from what NIWA and the Met Service give us, at best they are calculated guesses. So, for many parts of the country the rain will be a welcome extension to spring growth while keeping in mind and sympathy for those who have had to bear the worst of it.