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.
From 1 June 2021, up to 10 cents of each farm’s milk payment will be determined by the farm’s sustainability credentials and milk quality.
“Fonterra farmers are already among the world’s best in these areas and we’re really proud of that. The Co-operative Difference payment is another way we can recognise farmers, while also supporting our strategy to grow the value of our New Zealand milk by responding to increasing demand around the world for sustainably produced dairy,” says Richard Allen, group director Farm Source.
Allen says the new payment will recognise farmers who have already innovated and invested early while offering farmers more encouragement to take further steps required to meet consumer expectations.
“We want to reward the on-farm efforts that demonstrate our Co-op’s care for the environment, animals, people and communities. It’s these actions which help ensure we’re the dairy company of choice for customers around the world and for New Zealand dairy farmers, for generation to come.”
The 10 cent Co-operative Difference payment is made up of:
- 7 cents/kgMS for achievement under the Environment, Co-op & Prosperity, Animals, and People & Community focus areas.
Once these have been achieved:
- 3c/kgMS for milk that meets the ‘Excellence’ standard under the Milk Quality framework.
While The Co-operative Difference framework was introduced in 2019, the milk payment is new to farmers.
