Fonterra Expands Organic Dairy Operations to South Island, New Zealand
Fonterra, a major player in the dairy industry, has announced plans to expand its successful organic dairy operations into the South Island of New Zealand. The initial focus will be on recruiting farmers interested in converting to organic farming or those already operating organic farms in regions from Southland to Canterbury. This initiative builds on Fonterra's existing programme in the North Island, which currently includes over 100 farms.
Anne Douglas, Group Director for Fonterra Farm Source, highlighted the positive impact of this expansion on the cooperative. "We already have a strong performing organic business but have more room for growth based on increasing demand from customers around the world," she stated. The plan is to begin processing organic dairy products at the Stirling site from the 2028/29 season, with recruitment beginning now to allow time for farmers to achieve organic certification.
The cooperative aims to meet minimum recruitment targets in the South Island to ensure operational efficiencies before commencing work at Stirling for segregated processing of organic milk. This expansion provides South Island farmers with an additional supply option and is expected to benefit all Fonterra farmers due to the positive contributions of the organic business to the cooperative's earnings.
Fonterra's organic dairy segment has seen consistent growth, with the global organic dairy category showing year-on-year retail sales value increases. The cooperative is well-positioned to capitalize on this demand with a diverse product range and strong customer partnerships. Andrew Henderson, Fonterra's General Manager Organics, emphasized the support offered to farmers transitioning to organic, including conversion incentives and mentoring opportunities.
The Organic Milk Price, established in 2016/17, has delivered an average premium of approximately $2 per kgMS over the Farmgate Milk Price. In the 2021/22 season, fully certified farmers received more than $10 per kgMS, with a record payout of $12.35 per kgMS last season. The forecast for the 2025/26 season is $13.10 per kgMS.
Fonterra's commitment to organic farming reflects the cooperative's dedication to meeting consumer demands for organic dairy and supporting farmers through the transition process. Interested farmers are encouraged to contact Fonterra for more information.
