Fonterra sets organic milk price

12 May 2016

Following Fonterra’s recent announcement that it plans to introduce a market-linked organic milk price for its organic milk farmers, it has forecast an opening market-linked organic milk price of $9.20 per kg milk solids for the 2016/17 season.

Fonterra sets organic milk price

Following Fonterra’s recent announcement that it plans to introduce a market-linked organic milk price for its organic milk farmers, the Co-operative has forecast an opening market-linked organic milk price of $9.20 per kg milk solids for the 2016/17 season.

Paul Grave, Head of Co-operative Affairs, Waikato, says while the opening forecast organic milk price is a big step up from the $5.65 per 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 said 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 Co-operative. 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,” said Grave. “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. “Organic milk prices are high because consumers’ appetite for organic milk products is growing faster than supply.”

The margins the co-operative is achieving on its organic milk products are similar to some of its highest-earning consumer and food service products, said 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,” he said.

Grave said that Fonterra’s organics business has been consistently profitable recently and has paid back the Co-operative’s investment in the business.

“Organics is a profitable business. The Co-operative 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”, said Grave.

Related tags

Dairy

Related news

Parmesan partnership to put ‘blockchain ready’ digital chip on all cheese wheels

Parmesan partnership to put ‘blockchain ready’ digital chip on all cheese wheels

29 Jun 2022

A new line of food-safe and secure digital labels on each Parmigiano Reggiano cheese wheel will deliver previously unseen levels of traceability, product control, and quality assurance, says the Consorzio del Parmigiano Reggiano (CFPR).

Read more 
Dairy butter carbon footprint is 3.5 times larger than plant-based spreads, says Upfield

Dairy butter carbon footprint is 3.5 times larger than plant-based spreads, says Upfield

25 Apr 2022

Plant-based margarine manufacturer Upfield says its spreads have a 70% smaller carbon footprint, require half the amount of water and use two-thirds less land across the product cycle when compared to conventional butter, according to a life cycle...

Read more 
China leads the global boom for probiotics

China leads the global boom for probiotics

30 Mar 2022

Probiotics are experiencing a boom in global demand - particularly in China - as consumers look for functional ingredients in food and drink products that can improve their health. 

Read more 
Butter is Better: Keto is driving resurgence as a premium product

Butter is Better: Keto is driving resurgence as a premium product

11 Feb 2022

After years of being shunned as an ingredient, fat is back thanks in large part to the popularity of the keto diet. The market for keto products is growing steadily with the global value of this category forecast to reach $15.6 billion by 2027, accordi...

Read more 
Oats growing in popularity, winning awards and consumer favour

Oats growing in popularity, winning awards and consumer favour

10 Feb 2022

Oats have transformed from a breakfast ingredient to an increasingly common plant-based option, appearing in a multitude of applications.

Read more 
Chobani debuts plant-based coffee creamer

Chobani debuts plant-based coffee creamer

21 Jan 2022

After two years of producing dairy- and oat-based coffee creamers, Chobani is branching into plant-based coffee pairing options with the debut of Chobani Plant-Based Coffee Creamers. These creamers come in four flavors: Caramel Macchiato, Chocolate Haz...

Read more 
Animal-free dairy company raises $120M for commercialization

Animal-free dairy company raises $120M for commercialization

18 Jan 2022

Israeli animal-free dairy company Remilk raised $120 million in a Series B funding round led by Hanaco Ventures with participation from a number of other investors, including Impossible Foods backer CPT Capital, plant-based protein company Just, Yofix,...

Read more 
Chobani Sales surge as it moves closer to IPO

Chobani Sales surge as it moves closer to IPO

26 Nov 2021

Greek yogurt company Chobani saw its sales hit $1.2 billion as of Sept. 25 this year. That is only $200 million short of what the company recorded for all of 2020, when its sales rose 5.2% to $1.4 billion last year, according to a filing with the Secur...

Read more 
Cell-cultured dairy company maker TurtleTree closes $30M in Series A

Cell-cultured dairy company maker TurtleTree closes $30M in Series A

8 Nov 2021

Singapore’s TurtleTree successfully closed a $30 million Series A funding round led by Verso Capital. This investment is one of the largest rounds to date in Asia’s cell-based food sector and brings TurtleTree’s total investment figure to $40 million.

Read more 
EU approves protein ingredient from Eat Just

EU approves protein ingredient from Eat Just

25 Oct 2021

Eat Just, the company behind the mung bean-based Just Egg, received approval from the European Food Safety Authority (EFSA) stating that its novel mung bean protein used in its egg substitute is safe for consumption. It is the first novel legume protei...

Read more