Doing things differently to support our farmers
Five years since it started, Richard Allen looks back at why Farm Source was created and how by doing things differently, it continues to support farmers day after day.
Farming has never been easy. Long hours, battling weather, animal health issues, milk price uncertainty, government regulations and consumer requirements. The challenging and complex process of producing safe, high quality and sustainable milk is something that is easy to lose sight of when we’re popping into the local dairy to pick up a carton of milk or some extra butter.
But at Fonterra, this is our Co-operative’s focus.
It’s easy to think of a dairy processor as simply a corporate company that picks up milk. But for Fonterra, this just isn’t the case. We do things a little differently and we like it that way.
We come to work every day to make the most from every drop of that precious milk and return that value to our farmers. After all, our Co-op is owned by the very farmers that produce our milk – a fact often forgotten.
Five years ago, we launched Farm Source. Most might think of Farm Source as simply a rural supplies retailer, but it’s far more than that. Alongside our store teams, we have regional services teams, digital tools and a service centre that helps our farmers produce the highest quality milk in the most sustainable way.
In our simplest form, we are our Co-op’s farmer-facing team in every corner of the country. We are passionate, local people who help make farming easier by lowering on-farm costs, providing on-farm support and advice, and giving back to our communities.
Lowering on-farm costs
We have 68 stores in New Zealand. While most retail chains want to sell as much product for the highest price possible, we do things a little differently. Our aim is to maximise our collective scale so we can deliver the most competitive prices to our farmers. That’s not to say we don’t make a profit but with the profit we make, we ensure a return on capital to our Co-op and give the surplus back to our farmers through Farm Source Reward Dollars.
Over the last five years, we’ve returned more than $160 million to farmers in Farm Source rewards, discounts, and deals. To put this into perspective, had an average-sized Fonterra farm purchased all their farm supplies from Farm Source, they would have received a return equal to $0.10 per kgMS.
This may not sound like a lot, but when you multiply that out over the season, based on an average-sized herd of about 400 cows, this equates to over $15,000. To any business, saving $15,000 just for shopping at one store throughout the year is significant.
Day in and day out we’re on the lookout for more ways to lower on-farm costs through innovative partnerships. Farmers are up at the crack of dawn milking when the rest of us are tucked up in bed. Later in the afternoon when most of us are at work or school, they are back in the milking shed. This unique, off-peak usage should be rewarded. So we paired up with Genesis Energy who have created For Dairy – an electricity plan that recognises dairy farmers’ unique usage and could help them save between 5 – 25 per cent on their electricity bill. This is just one example of the many partnerships we offer our farmers to help make farming a little easier.
Giving back to our communities
Farm Source stores are aptly named “Our Place”. Our Place is not only where our Farm Source teams are based, but it serves as a hub for our farmers and communities to come together, connect and share. On any day, you can find a range of different groups using the space – maybe school children learning about dairy or a health and safety workshop. There’s always a hot cuppa and bikkie on offer.
Our role in the community extends beyond Our Place as well. Our teams can often be found out on-farm helping a community group plant trees, helping the community clean-up after flooding like Cyclone Cook, or stepping up to help farmers and the industry respond to Mycoplasma bovis.
These are just a few examples of how we do things differently at Farm Source. For five years, we’ve not just collected milk or run a retail store chain. We’ve become an integral part of our farmer’s Co-operative. Our differing approach is now entrenched in the Co-operative Difference – our new way of helping our farmers know what they need to do today and what they need to prepare for in the future so they can continue to be sustainable for generations to come. Through the Co-operative Difference, we’ll also recognise and reward those farmers taking additional steps to make their farms more sustainable.
For five years, we’ve used our Co-op‘s collective strength and our local teams to make farming easier, so that our farmers can concentrate on what they do best - producing high quality New Zealand milk in the most sustainable way. By doing things differently, I believe we can help make farming easier for generations to come.