Wednesday, 14 October 2020 11:55

Certification, co-op family enables $10-plus payout

Written by  Sudesh Kissun
Brendan Hoare. Brendan Hoare.

Fonterra's record payout for organic milk reflects the value of being certified organic, according to Brendan Hoare, Buy Pure NZ managing director.

“Without being certified and in a family like Fonterra other dairy farmers would struggle to get a record result,” Hoare told Dairy News.

“Those in the Fonterra team need to be congratulated.”

 The dairy co-op’s organic farmers have become the first in the country to receive a double digit milk payout: its 60 organic suppliers, last season, have set a record price for cow milk in New Zealand at $10.19/kgMS.

 Fonterra’s global business manager organics Andrew Henderson says the final price was driven by a combination of factors – including organic protein sales in the US, a favourable exchange rate and a number of efficiency improvements right across the supply chain.

He says the record result is a culmination of work put in by a wide group of people.

“It starts with the effort of our organic suppliers to meet and exceed organic certification standards,” Henderson told Dairy News.  “Then it’s the endeavours of our transport, manufacturing, sales and marketing teams who all help make the most of that milk to drive returns and deliver value to the co-op.”

 Hoare, a former chief executive of Organics Aotearoa, is contracted through Buy Pure NZ to undertake OANZ’s 2020 Organic Market Report. The results of this will be published in early 2021.  

“We expect this result to remain positive and continue to demonstrate that organic is the fastest growing multi-food sector in the world,” he says. “NZ is extremely well placed to truly capitalise on this opportunity.” 

He cautions that being from NZ is an advantage but says this alone is not enough. 

“Global customers are demanding authenticity and measured outcomes,” Hoare adds. 

“Communicating clearly that being certified organic from NZ actually means you are also certified: grassfed, non GMO, hormone and antibiotic free, follow additional animal welfare standards, contribute to critical factors like biodiversity are all what customers and buyers want to hear and be assured of.” 

Hoare believes with a payout of $10.19, there will be plenty of interest from other farmers. However, he adds that it is important to stay focused and get it right.

“While the sector truly welcomes renewed interest in our healthy soil, food and people maxim we have been espousing for 70 years, we have real work to do to go to scale and get the transition strategies right.

“For example, we have the Organic Products Bill to work through. It affects the whole supply chain, so will take the right leadership to maintain momentum now and well into the future.”

Hoare claims that in countries like the US, family farming has been decimated and overtaken by corporate models. Organic is no exception.

“This does not sit well with buyers’ customer base who recognise that the true cost of food supports family farmers to get good returns for honest work that protects the social fabric of rural communities and the environment they gleam their livelihoods from. 

“Being certified organic assists this and a Fonterra being a cooperative gives value back to its shareholders – in this case dedicated, certified organic farming families.”

Record payout

❱❱ Fonterra organic milk payout 2019-20- $10.19/kgMS

❱❱ 2020-21 forecast payout- $8.50 to $9/kgMS

❱❱ 74 suppliers this season

❱❱ Fonterra’s organic suppliers are based throughout the North Island, with most of the milk processed in Waikato.

More like this

Water donation?

OPINION: Fears of a summer without a daily swim have been doused in Tangiteroria, near Whangarei, after Fonterra Kauri filled the community pool as a donation.


Good growth year for Claas

While many sectors of the agricultural machinery were hit by the ravages of Covid-19, the effects of the pandemic did not prevent the privately-owned Claas Group from enjoying a 3.7% increase in sales during 2020.

Green machine frugal on fuel

According to the industry respected independent DLG PowerMix test, John Deere appears to be the best choice of tractor for transport applications with its new 7R330 model.


App takes pressure off

TRS Tyre & Wheel, owned by Trelleborg Wheel Systems, has introduced the TLC Plus App to the New Zealand market.

New MF 5S series arrives

Just before Christmas, Massey Ferguson quietly released details of the successor to its popular MF 5700S range in the shape of the new 5S Series.


Machinery & Products

Kubota ROPS tractors here

Kubota New Zealand product specialist Shaun Monteith says Rollover Protective Structure (ROPS) tractors make up 30% of all tractors in…

» The RNG Weather Report

» Latest Print Issues Online

Milking It


OPINION: After years of fighting over farming, freshwater and sustainability Federated Farmers and Fish & Game are trying to kiss…

Water donation?

OPINION: Fears of a summer without a daily swim have been doused in Tangiteroria, near Whangarei, after Fonterra Kauri filled…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter