Opportunity for more Fonterra farmers to go organic

Fonterra’s Organics Programme has been going from strength to strength in recent years, and the Co-op sees plenty more opportunity for growth.

Since the 2021/22 season, the programme’s 100+ farmers have received an organic milk price of more than $10 per kgMS. New record highs have been set for the past three years, culminating in a final payout of $12.35 per kgMS last season.

That’s been good news for organic farmers, but a strong performing organics business also benefits all Fonterra farmers because it contributes positively to the wider Co-op’s earnings.

With the current demand for grass-fed organic dairy outpacing supply, Fonterra’s General Manager of Organics Andrew Henderson says the Co-op is looking to increase its base of organic suppliers.

“Demand for organic products continues to grow, and to support this trend, we’re looking to further expand our Organics Programme,” says Andrew.

“We encourage farmers interested in converting to organic production to get in touch with us.”

Globally, organic dairy has shown consistent retail sales value growth year-on-year for the last 6+ years.¹

Fonterra is well-positioned to capitalise on market conditions and drive sustainable value for organic farmers through the Co-op’s scale and optionality, diverse product range, strong customer partnerships and continued focus on delivering operational efficiencies.

Making the most of our organic advantage

New Zealand is a great place to produce organic dairy. We have an ideal climate, and our grass-fed system can provide a natural advantage compared to other organic dairy systems around the world.

Organic certified dairy unlocks access to premium international markets and, when combined with lower overall farm input costs typically seen here in New Zealand, this creates a strong opportunity for increased farm profitability.

Grass-fed claims are also growing in organic dairy and can command even greater premiums.²

Strong returns

Farmers considering a switch to organic production could benefit from increased earnings – for example the organic milk price has delivered an average premium of ~$2 per kgMS above the Fonterra Farmgate Milk Price between the 2016/17 and 2024/25 seasons. There’s also the potential for lower input costs that are typical in New Zealand’s grass-fed organic systems.

If you would like to explore what converting could mean for your business, an organic benchmark is now available through DairyNZ’s DairyBase.

Support at every step

Fonterra provides comprehensive support options for farmers who are on the conversion journey, including:

• Conversion Incentives: Financial support to help you transition.
• Certification Support: Guidance through the full organic certification process.
• Practical Tools: Online resources, toolkits, and on-farm advice.
• Farmer Network: Conferences, online groups, and regional meetings.
• Peer Mentoring: Learn directly from experienced organic farmers.