Only 260 of Fonterra's 10,500 farmer shareholders have offered their shares for the dairy co-operative's investment fund.
Former Federated Farmers dairy chairman Lachlan McKenzie says the lack of interest shows most farmers believe what opponents of "trading among farmers" have said all along, "that they'd be absolutely bloody stupid" to sell their economic rights.
Fonterra confirmed this afternoon 260 farmers have offered to sell the economic rights to 5.5 million shares into the shareholders fund.
"A number of them are likely to wait and see how the units trade before deciding to sell economic rights of some of their shares into the fund," Fonterra chief executive Theo Spierings says in a statement.
That leaves Fonterra to issue the majority of the units – with the final number depending on the unit price, which will be decided early next week after the bookbuild and allocation.
The dairy giant wants to raise $500 million, with oversubscriptions of up to $25 million.
Fonterra chief financial officer Jonathan Mason says the issue of shares by Fonterra will affect the co-operative's earnings per share by about one cent.
Despite those assurances, Mr McKenzie – who farms near Lake Rotorua – told NBR ONLINE farmers remain fearful of a dilution to their return.
"We've been saying all along that farmers would be absolutely bloody stupid to sell down their company and that's shown there are very few farmers that are so financially stressed they have to sell down shares.
"It shows the idiocy of TAF right from the outset."
Fonterra says 2500 people have applied for units under the Friends of Fonterra scheme, including almost 900 farmer shareholders, almost 200 sharemilkers, about 70 retired farmers and more than 1300 Fonterra staff.
A further 260 Australian dairy farmer suppliers have also applied.
However, not everyone is intoxicated by the chance for investors to get exposure to the dairy industry, with research firm Morningstar warning investors to steer clear until trading starts.