Friday, 05 February 2016 09:59

Organics success leads to market-linked price

Written by 
From June 2016, organic milk payments will reflect the performance of the organics business. From June 2016, organic milk payments will reflect the performance of the organics business.

Fonterra will introduce an independent organic milk price linked to market returns for organic products, prompted by the success of that business.

From June 2016, organic milk payments will reflect the performance of the organics business. Organic farmers currently receive a fixed premium together with the conventional farmgate milk price for their organic milk supply.

Organic farmers can choose to move to the new payment approach or stay under the existing payment system.

At a meeting with organic farmers this week, Craig Deadman, Fonterra's global business manager - Organics, told farmers that paying market-linked prices for organic milk recognises the improved performance of the organic business, which reflects greater demand and stable prices for global organic milk products.

"Organic milk products provide high-value returns for the cooperative. We want to grow our organics business over the long term. Linking the organic milk price to organic market returns will help us to increase the number of organic farmers."

Deadman says historically market prices for organic milk products have been less volatile than conventional milk price products and the organic milk price has the potential to provide farmers more certainty in operating their organics businesses.

He says the move also recognises the effort and commitment of Fonterra organic farmers to producing premium organic milk.

Deadman says Fonterra has undertaken a series of measures recently to enhance the attractiveness of organic farming for current and prospective organic farmers.

"A recent initiative is the establishment of the Organic Farmers Advisory Group, a representative group of organic farmers who provide an additional feedback channel between organic farmers and Fonterra. They also had provided feedback on the new organic pricing system," says Deadman.

More like this

Fonterra R&D: Innovation needs more than just PhDs

Common sense and good human judgement are still a key requirement for the super highly qualified staff working at one of New Zealand's largest and most important research facilities - Fonterra's R&D Centre at Palmerston North.

Featured

LIC ends year with $30.6m profit

Herd improvement company LIC has ended the 2024-25 financial year in a strong position - debt-free and almost quadrupling its net profit.

Farmers back Government pause on RMA plan changes

There's been widespread support from the primary sector for the Government's move to put the brakes on local authorities to do any more work on planning changes ahead of major changes to the Resource Management Act (RMA).

Flood-hit Tasman farms begin long recovery

People affected by the recent two severe flood events in the Tasman district are weary and exhausted trying to deal with the devastation on their farms and orchards, according to the head of the Rural Support Trust (RST) in the region.

National

Machinery & Products

Fliegl offers effluent solutions

Founded in Germany as recently as 1977, today, the Fliegl Group employs more than 1100 workers, offering an expansive range…

» Latest Print Issues Online

Milking It

It's all about economics

OPINION: According to media reports, the eye-watering price of butter has prompted Finance Minister Nicola Willis to ask for a…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter