Fonterra introduced its organic programme in 2004 and since then the number of farms converting to organic dairy has grown exponentially. Today there are 110 Co-op farms in the programme spread from Whangarei to Featherston in the North Island producing more than 100 million litres of milk each season.
The concentration of farms in the North Island rather than nationwide is a logistical decision for the Co-op with specific infrastructure in place catering for organics based in the Waikato using our smaller sites of Hautapu, Morrinsville, Waitoa and Te Awamutu.
The Co-op organic difference
The move to organics is a process that takes time and energy but the benefits can be immense, including a higher milk price, incentive payments over the certification process, lower emissions, reduced animal health costs, and more resilient and diverse pasture.
Farm Source’s organics team, led by Stuart Luxton, Organic Business Relationship Manager, is on hand to support farmers looking to convert to organics. In addition to personalised support, the team has produced an organic toolkit outlining the fundamentals of conversion and includes key factsheets around soils, animals, plants, and animal welfare.
"To start with I will go and meet with farmers on the farm and find out more about their current farm practices because this has an influence on the way that we move through to organics.
"Once a farmer has made a decision to convert, we have an application process that goes through their awareness of organics and expected production. This is then reviewed by a committee. Once approved, the farm becomes part of our supply base and they’re offered a contract with incentives," Stuart says.
It takes three years to become fully certified organic. During the first two years, the Co-op offers a conversion incentive of 45 cents per kilogram of milk solid (kgMS). In the third year, as the farm reaches some organic incentive milestones an additional utilisation incentive of 15 cents/kgMS is added. Once fully certified, Co-op farmers receive the full organic milk price.
Since 2016, Fonterra has offered its own organic milk price path. Last season, the Co-op’s organic farmers received a record milk price of $10.80/kgMS. By comparison, the conventional Farmgate Milk Price was $8.22.
Co-op organic farmers are expected to meet organic standards set by New Zealand, Australia, Korea, China, USA and Canada. Having such a comprehensive range of organic certifications allow the Co-op to be able to meet almost any market access requirements and opens the door for exporting around the world, as well as having a unique position in the marketplace as most exporters of organic product don’t have this same ability. This helps to deliver extra value and create strong partnerships with our customers.
The range of organic dairy ingredients exported, under Fonterra’s ingredients and solutions brand, New Zealand Milk Products Organics, include whole milk powder, skim milk powder, butter, pure milk fat, proteins, and cheese. These are independently certified by certification organisation AsureQuality to internationally accepted organic standards and are sold to more 100 countries and used by some of the world’s most famous food and nutrition brands. At present the US is the Co-op’s largest organic market with products sold across Mexico, Canada, China, South Korea, Taiwan, South East Asia, and Australasia.
"The North American organic standards are the gold standard in the international market place, this includes both the USA and Canadian Organic Standards. Running an organic system requires a buffer around the farm to ensure there’s no contamination from adjacent non-organic farms. I like to think all New Zealand farms should have a buffer anyway as best practice to minimise biosecurity risk, as well as adding to the natural biodiversity on farm. A buffer could be a hedge or plantings, stream, road, or for meeting this organic requirement, at a minimum shade cloth on a fence (shade cloth isn’t recommended for large areas and only as a short term solution)," Stuart says.
"Organic farmers tend to take a different approach to farming across the board, making the most of what’s available environmentally. They may use flax and trees on farm as feed or supplementation for different things. If you’re going to plant anything it should have at least five different uses: such as shade, shelter, aesthetics, minerals, fodder in dry conditions, or treatment for animal health issues."
"I encourage farmers to plant variety over their farms including fruit trees – it all adds to creating a naturally diverse system."
One of the farms Stuart works with is ‘Te Miro’ near Norsewood. The 340-herdorganic farm featured on Country Calendar and in the New Zealand Herald last year having achieved the coveted Canadian Organic Certification. Run by Blair and Penelope Drysdale, Te Miro has the Manawatu River as a buffer on one side and runs through to Foxton. The couple has planted more than 40,000 plants on the farm and has a thriving pasture, maintained with organic fertiliser and herbage testing. Despite a lower stock rate, the herd’s milk production is on par with, if not ahead of, their conventional counterparts.
The payoff
Stuart says while an organic farmers’ farming toolbox is not as packed as a conventional farmer (for example, antibiotics and most standard synthetic fertilisers are a no-go), there are significant payoffs for going organic.
"They get the added benefit of increased price per milk solid and they also get a reduction in costs over time. The cost reductions over time come from a number of different factors, some of these are lower fertiliser spend (organic farmers still apply fertiliser but its nutrients come from different sources), and lower animal health spend (it’s all about being proactive rather than reactive.)
"Farmers within the organic programme over time comment all the time how they see their health of their stock improve and the need to treat for some common issues disappear. They say that this is due to their reduction in chemicals, less synthetic fertiliser and less stress on animals due to the lower stocking rates. Animals still feed well and all this helps reduce the stress on them as farmers."
"As the Drysdales have pointed out, milk production per animal isn’t typically that different on an organic farm compared to conventional despite lower stock rates. Other farmers have also commented that converting to organics has given them a new lease on life and brought back their enjoyment of dairy farming again," Stuart says.
"With the increase in environmental compliance and environmental pressures, organics has an obvious advantage with the average environmental footprint per hectare considerably lower than conventional – particularly on an intensity basis (emissions per litre of milk produced)."
To find out more about Fonterra’s Organic Programme talk to your TSR or visit your local Farm Source store.