Making the most of the Mainland payout

4 November, 2025

The recent Fonterra Mainland sale is a potential game-changer for many Kiwi farmers. With an average payout of around $400,000, it’s a welcome boost at a time when rural businesses have been doing it tough.

But beyond the headlines, this payout represents something much bigger, a rare opportunity for farmers to strengthen their businesses, plan for succession and invest back into their families and community. Every farm is different and so is every family. Before you decide how to use the money, here are a few key areas worth thinking about.

Pay down debt

Reducing debt might not sound exciting, but it’s one of the most powerful moves you can make.

Whether it’s short term debt like overdrafts or debts with high interest rates like equipment and vehicle loans, paying it down gives you breathing space, reduces risk and gives you more options. Less debt and a stronger balance sheet could open up a conversation with the bank around lower interest rates.

Farming is unpredictable. Weather, global prices and compliance costs can shift overnight. Lowering debt strengthens your cashflow and gives you flexibility when things tighten.

The right approach will depend on your current position, so it’s worth chatting with your accountant, bank manager or financial advisor before deciding how much to commit. When the next drought or rate rise hits, you’ll be glad you did.

Invest back into the farm

Once debt is taken care of, your thoughts may turn to the farm itself. The key is to invest strategically, not impulsively.

Focus on projects that improve efficiency, reduce compliance risk or deliver long-term cost savings, such as upgrading effluent systems, improving water reticulation or adopting automation tools (and other farming tech) that save time and labour. Before committing, ask one simple question: will this investment pay for itself, directly or indirectly? If it will, go for it. If not, park it for now.

Expansion and new opportunities

With the additional funds, farmers may look to new opportunities. A new farm purchase, expansion of the current operation or herd expansion. The payout will give you options you didn’t have before.

Plan for the future

If succession planning has felt too hard to start up to this point, this could be the perfect time to begin.

Succession planning remains one of the biggest challenges facing farming families across Taranaki and New Zealand. Many farm owners are nearing retirement, but few have a formal plan in place for the next generation. That means a huge amount of rural wealth could be lost if transitions are rushed and not given the time they require. The Mainland payout offers a rare chance for farmers to start that planning while there’s cash on hand and goodwill around the table.

Maybe it’s time to review your asset holding structures. Or perhaps you want to create off-farm investments that let you step back without losing income. The funds could be used to help balance the interests of the non-farming siblings. These are complex and emotional conversations and that’s where good professional advice makes all the difference.

At Govett Quilliam, we regularly help farming families design fair, practical succession plans that protect the business, preserve family relationships and keep the farm in the family. We work alongside your accountant and bank to make sure the legal side, from ownership structures to wills and trust deeds, supports your long-term goals.

A well-structured plan isn’t just about dividing assets. It’s about communication, fairness, and clarity; ensuring every family member understands the pathway forward.

Support your rural community

Smart reinvestment also has a ripple effect. When local suppliers, contractors, and tradespeople get work from on-farm upgrades, it boosts employment and cashflow throughout our rural communities. Every new fence, water system or shed built locally keeps money circulating where it matters – in rural New Zealand.

This payout could breathe fresh life into rural communities that have done it tough over the past year. Many local businesses rely on farm spending to stay afloat. Using part of your payout locally helps circulate money through the regional economy and supports the people who keep rural towns ticking. It’s not charity; it’s smart community investment. When the rural sector is healthy, everyone benefits.

Build a buffer and diversify

It’s tempting to spend when cash is in the bank, but resilience is worth more than any shiny new tractor.

Setting aside a portion in a rainy-day fund, term deposit or conservative investment gives you options when milk prices fall, compliance costs rise or the weather doesn’t play ball. Flexibility and cashflow are the best stress reducers there are.

Diversification doesn’t have to mean stepping away from the land. For some, it might involve small-scale forestry, renewable energy partnerships or leasing part of the property to generate steady passive income. The goal is to create income streams that smooth out the peaks and troughs of the dairy cycle.

Enjoy some, but keep perspective

Let’s be honest, you’ve earned this. Farming life is relentless: long hours, early starts, constant risk. It’s okay to enjoy a slice of the reward.

Maybe it’s a long-overdue family holiday, a kitchen renovation, a donation to the local school or a bonus for loyal staff. These things matter for wellbeing and community morale. Just keep the balance so the benefit lasts beyond the moment.

The bottom line

No two farms are the same. How you use this payout will depend on your debt, your family dynamics, your age and your goals. The key is to take your time, get advice and make decisions that strengthen your business and your legacy.

At Govett Quilliam, we work closely with farming families across Taranaki and beyond; not just on legal matters, but as part of your broader advisory team. We can:

design and document a fair succession plan
structure ownership through trusts or companies
review existing agreements to protect family interests
connect you with trusted accountants, bankers, and financial advisors who understand rural business

We also assist with the practical side of succession; shareholder agreements, inter-generational loans, gifting arrangements and ensuring your planning ties into your wills and enduring powers of attorney. Getting these pieces aligned early prevents future disputes and protects the legacy you’ve worked hard to build.

The Fonterra payout isn’t just a short-term windfall. It’s a long-term lever. A tool to strengthen your farming business. One that can reduce financial stress, secure your family’s future, strengthen your community and give your farm room to grow.

Handled wisely, this could be one of those rare turning points that shapes your business and your family for decades to come.

If you’d like to talk through how this payout could fit into your succession or farm structure plans, get in touch with our Rural Law team. We’re always happy to have a chat.