Fonterra is expanding its successful organic milk business into the South Island for the first time, with a call for both existing organic farms and those looking to convert. The focus will be on areas from Southland through to Canterbury, while recruitment also continues in the North Island where more than 100 farms are already part of the programme.
Anne Douglas, Group Director for Fonterra Farm Source, said, “We already have a strong performing organic business but have more room for growth based on increasing demand from customers around the world.”
The Co-op plans to process organic milk at its Stirling site in Otago from the 2028/29 season. Recruitment is starting now to allow farmers enough time to achieve organic certification before operations begin.
“Expanding the programme seeks to offer South Island farmers another supply option and is also expected to benefit all Fonterra farmers based on the positive contribution our organic business makes to the wider Co-op’s earnings,” said Douglas.
Globally, the organic dairy category has seen consistent year-on-year retail growth. Fonterra is well placed to meet this growing demand thanks to its wide product range and strong market access.
Andrew Henderson, Fonterra’s General Manager Organics, noted that the Co-op provides extensive support to its shareholding farmers during the organic conversion process.
“Our support package includes conversion incentives, advice, networking opportunities and linking farmers up with peers who can mentor them through the process,” he said. “Organic farming might not be the right fit for all shareholders, but for those interested in converting it has the potential to unlock additional returns.”
Since the Organic Milk Price was introduced in the 2016/17 season, it has delivered an average premium of around $2 per kgMS above the standard Farmgate Milk Price. In the 2021/22 season, fully certified organic suppliers received more than $10 per kgMS, with a record final payout of $12.35 per kgMS last season. The current forecast for 2025/26 stands at $13.10 per kgMS.
Fonterra’s organic business has operated since 2002, with production currently based at its Hautapu, Morrinsville and Waitoa UHT sites.
“At the heart of this business are farmers who are passionate about the principles of organic farming and who create goodness for customers and consumers around the world that value organic dairy,” said Henderson.
Farmers interested in switching to organic can contact Fonterra by phone, email or through local Farm Source representatives. The Organic team will also be available at upcoming regional and national Field Days.