increase font size
FONTERRA AUSTRALIA has been selected as the preferred supplier to process Woolworths Own Brand milk in Victoria for the next 10 years.
The proposed long-term arrangement will give farmers certainty that will allow them to invest in their businesses with the confidence that they have a guaranteed buyer for their milk, they say in a joint statement. Woolworths' existing contracts were for a period of one year.
Woolworths Own Brand milk sold in Victoria will be made and processed in Victoria, supporting local farmers and jobs in regional communities.
The proposed deal will see Fonterra investing more than $30 million into a state-of-the art milk processing plant at its Cobden site in South West Victoria.
The investment will support 30 new jobs at the Cobden facility and have positive flow-on effects for farmers and communities in southwest Victoria. Fonterra and Woolworths will continue to work together to finalise contractual arrangements to reach a binding supply agreement.
Woolworths managing director of supermarkets, Tjeerd Jegen, says the new contract will be a win for farmers, Woolworths customers and Victoria.
"We want farmers and Fonterra to provide quality milk for our customers. Fonterra has told us that with the certainty of a long-term contract they and their farmers can invest and innovate," Jegen says.
"Changes like integrated seals for milk containers and new, state-of-the-art processing equipment would not be possible without the investment brought about by this certainty. It's these innovations that will see better tasting, fresher milk available in Woolworths stores. We hope our customers will enjoy the difference.
"We don't want to see milk shipped long distances which only adds cost and increases the time between the farm and the supermarket shelf. These new contracts mean local farmers will supply Victorian milk to Victorian families."
Fonterra Australia managing director Judith Swales, pictured, says Fonterra is excited to partner with Woolworths in this milestone initiative.
"This proposed arrangement will help us deliver on our strategy to provide healthy, nutritious dairy foods – in every dairy category – to Australians. It expands our current white milk portfolio complementing our Riverina Fresh milk business in New South Wales.
"Using Fonterra's global innovation leadership and the high-quality milk from our farmers, we can optimise the freshness and shelf life of milk to ensure a better product for Woolworths Victorian customers.
"Just as importantly, the proposed arrangement will provide certainty for dairy farmers so they can invest on farm and grow their milk production. Australia is our second largest milk pool outside of NZ, so we take a long-term view and aim to deliver profitability, growth and sustainability in the Australian dairy industry."
The contractual arrangements are being finalised by the parties. The modernised facility at the Cobden site will be commissioned in early 2015.
Australian dairy farmers supplying Fonterra are getting an opening weighted average milk price of A$8.60/kgMS for the new season or around NZ$9.26/kgMS - NZ74c less than New Zealand suppliers, based on the current exchange rate.
Regenerative farming trials in Gisborne, in partnership with Woolworths, LeaderBrand, and Plant & Food Research, are uncovering promising opportunities for sustainable vegetable farming in New Zealand.
One of the country’s two largest supermarket chains is reporting that for the first time since the disruption of Covid, they have largely full supply on almost all fruit and vegetables grown locally.
Fonterra is talking up the strength of its Australian business despite a 70% drop in half-year profit after tax.
Each year, over 12,000 tonnes of Perfect Italiano Mozzarella embark on a journey from Fonterra Australia's Stanhope manufacturing site in northern Victoria to be expertly shredded at its secondary processing site in Tullamarine in Melbourne.
OPINION: Two reports out last week confirm that the worst may be over for pastoral farmers.
Reuters reports that giant food company Wilmar Group has announced it had handed over 11.8 trillion rupiah (US$725 million) to Indonesia's Attorney General's Office as a "security deposit" in relation to a case in court about alleged misconduct in obtaining palm oil export permits.
DairyNZ is celebrating 60 years of the Economic Survey, reflecting on the evolution of New Zealand's dairy sector over time.
As electricity prices soar, farmers appear to be looking for alternative energy sources.
There is an appeal to New Zealanders to buy local citrus fruit.
Avocado growers are reporting a successful season, but some are struggling to keep their operations afloat following years of bad weather.
OPINION: Last week, Greenpeace lit up Fonterra's Auckland headquarters with 'messages from the common people' - that the sector is…
OPINION: Once upon a time the Fieldays were for real farmers, salt of the earth people who thrived on hard…
