Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
The funding is part of a wider package of customer incentives announced earlier this year, through separate agreements with Mars and Nestle. Fonterra farmers can apply from next month.
They can apply to receive a reimbursement on certain on-farm solutions of up to $1,500 for their farm, if they achieve the Co-operative Difference in 2025/26. Based on 2023/24 data, Fonterra expects this to be over 85% of farmers. Farmers will receive funding for their chosen solution in the month following verification.
The on-farm solutions for animal performance will be provided by herd improvement companies, LIC and CRV. For pasture optimisation, funding will be available for subscription to Pasture.io and Aimer and for data optimisation, Farm IQ and Trev subscription. Farmers can also use the funding to boost on-farm planting using a nursery or provider of their choice.
Group director for Farm Source, Anne Douglas, says the on-farm solutions put forward have been selected based on farmer feedback.
"When we announced the new incentives in February, we asked farmers what on-farm solutions the customer funding should cover.
"What we've selected is based on that feedback, as well as the fact that they are results-driven, widely available, easy to use and help drive emissions efficiency."
Included in the funded solutions are a range of animal performance tools from LIC and CRV, as well as pasture and data optimisation tools and on-farm planting to improve carbon sequestration.
“We’re pleased to be working closely with a range of providers this season to deliver on-farm solutions that benefit farmers,” says Douglas.
“These will benefit a large group of farmers by supporting them to further improve efficiency gains and emissions intensity reductions, which will in turn help us make progress towards our co-op’s on-farm emissions target.”
To be eligible for the funding for on-farm solutions, farmers need to achieve any level of the Co-operative Difference in 2025/26 and meet the terms and conditions for the initiative.
Mars and Nestle have independently supported Fonterra farmers with their sustainability actions through initiatives introduced over the past couple of seasons.
In 2024, Fonterra farmers were invited to take part in the Mars tools and services pilot, which provided access to tools and services, including animal efficiency services and digital tools. Additionally, Mars previously supported the greener choices programme, which made it easier for Fonterra farmers to identify and buy products at Farm Source stores that could help them make sustainability improvements on-farm.
In 2023, Fonterra announced that Nestlé would make an additional payment of between 1-2 cents per kgMS for farms that achieved any level of the Co-operative Difference. This payment has been replaced with the new emissions incentive payment from this season.
