What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
According to Andrew Henderson, Fonterra general manager organics, attendance at a recent series of farmer meetings about the organic expansion was strong.
“People were keen to hear more about the expansion and ask practical questions about what converting their farms could look like,” Henderson told Dairy News.
Fonterra is targeting first production in the South Island within the 2028-29 season. However, it’s not disclosing specific volume targets at this stage, citing commercial sensitivities.
Henderson says the plan is to process organic cheese at its Stirling site.
“We currently produce organic milk powder and butter in Morrinsville, and organic UHT milk at Waitoa,” he says.
“We produce organic cheese, whey, milk protein and lactose in Hautapu, and deliver liquid milk to independent local processors for New Zealand fresh milk.”
Read More:
- Fonterra opens organic milk supply to South Island dairy farmers
- Fonterra organic milk price hits record $13/kgMS
- Organic export market dominated by milk
Global demand is reportedly growing as some consumers are prepared to pay a premium for organic products. According to a 2025 Euromonitor report, the global organic dairy market is growing at 6% year-on-year and is projected to reach around US$65 billion by 2033.
Liquid milk (fresh and UHT) is the largest single segment of the organic dairy market.
However, Henderson says they are also seeing significant growth in interestorganic ingredient demand, including butter, cheese, milk powders and proteins.
Organic milk suppliers receive a higher milk price than conventional milk suppliers.
Fonterra’s current organic milk price for the 2025/26 season is $13.10/kgMS. The final organic milk price for the 2024/25 season was $12.35/kgMS, which was a record high payout.
