Friday, 06 May 2016 12:57

Forecast $9.20kg for organic milk

Written by 
Fonterra has forecast an opening market-linked organic milk price of $9.20/kgMS for the 2016/17 season. Fonterra has forecast an opening market-linked organic milk price of $9.20/kgMS for the 2016/17 season.

Fonterra has forecast an opening market-linked organic milk price of $9.20/kgMS for the 2016/17 season.

This follows the cooperative's recent announcement that it plans to introduce a market-linked organic milk price for its organic milk farmers.

Paul Grave, head of cooperative affairs, Waikato, says while the opening forecast organic milk price is a big step up from the $5.65/kgMS payment organic farmers currently receive (the organic fixed premium on top of the Farmgate Milk Price), it reflects consistently high prices for organic milk products in its global markets.

Grave says the marketplace for organic milk is very competitive and the market-linked organic milk price will help Fonterra to secure a steady stream of organic milk.

"The growth of the organics business is good news for the whole cooperative. Organic farmers actively participate in creating value by providing Fonterra with a certified organic milk stream and all farmer shareholders share in the value created by the organic business through dividend payments."

Increasing demand for organic milk products, and organic food in general, is leading to high prices for these products in international markets. While global milk prices have been volatile recently, prices for organic dairy ingredients have remained at the same relatively high levels since 2013/14, says Grave.

"Organic milk prices are high because consumers' appetite for organic milk products is growing faster than supply."

The margins the cooperative is achieving on its organic milk products are similar to some of its highest-earning consumer and food service products, says Grave.

"By selling higher-value products at premium market rates, the long-term organics strategy reflects Fonterra's priority to drive more value from every drop of milk."

Grave says Fonterra's organics business has been consistently profitable recently and has paid back the cooperative's investment in the business.

"Organics is a profitable business. The cooperative is focused on growing its organics business to benefit from the consistently high global market prices so that it can increase returns from this business for the benefit of all our farmers", says Grave.

More like this

Is he the right Guy for Fonterra?

Former Primary Industries Minister and Fonterra board aspirant Nathan Guy believes his relationships with bureaucrats in Wellington will help the co-op’s farmers immensely.

Fonterra back in the black

Fonterra chief executive Miles Hurrell says 2019/20 was a good year for the co-op, with profit up, debt down and a strong milk price.


Longest running ag field days all go

The South Island Agricultural Field Days, held in Kirwee on the outskirts of Christchurch, will celebrate its 70th year in March 2021 with a bigger demonstration area.


New Feds man keen to build

New Feds board member, William Beetham wants the organisation recognised for its significant contributions to NZ farming and society as a whole.


Global movers and shakers

Dairy companies around the world are facing a dilemma – whether to expand or divest assets, says Rabobank’s Mary Ledman.

Live cattle exports in limbo

The fate of 28,000 cows in quarantine in New Zealand and supposedly destined for China in the coming weeks hangs…

Machinery & Products

Mowers get a makeover

Well known throughout New Zealand over the past 18 years, Pottinger has redesigned its rear-mounted Novadisc mowers to incorporate a…

Hardy spotlight

High quality, reliable lighting is essential for anyone involved in agriculture or the great outdoors.

Simmm twin water blasters

Italian made Simmm Power Cleaner 100/11 and Power Gun 100/11 single-phase (230 volt) electric water blasters are proving popular in…

OPD argument raging on

A stoush is brewing with the Federal Chamber of Automotive Industries (FCAI) heavily criticising Farmsafe Australia’s recent Safer Farm Report.

» Latest Print Issues Online

Milking It

Cows and earthquakes

OPINION: It has long been suggested that animals have senses that humans don’t, and often behave differently than usual shortly…

Battle is on

OPINION: One of Australia’s biggest dairy businesses is back on the market after the Federal Government knocked back a bid…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter