Milk Price and financial info
The Fonterra Organic programme has its own independent Organic Milk Price driven by the market value of the products we sell.
Organic Milk Price
- Introduced in 2016, the Organic Milk Price is designed to give farmers a fair market value return.
- Historically delivers on average ~30% premium* to the conventional Farmgate Milk Price.
- Contributes to shared overheads and earnings for the wider Co-op.
*FY17-26 seasons, future returns may vary
2024/25
Final Organic Milk Price
$12.35
per kgMS
as at September 2025
2025/26
Forecast Organic Milk Price
$13.35
per kgMS with a range of $13.05 - $13.65
as at February 2026
Advance rate
Information is provided to support cashflow and seasonal planning.
Organic conversion incentives
During organic conversion the Co-op offers incentives designed to help farmers successfully transition. This includes conversion and utilisation incentives.
- Payments start once registration with a certification body is complete and a Fonterra Organic contract is signed
- Paid over and above the conventional Farmgate Milk Price
- Farmgate Milk Price + Conversion Incentive $0.70 / kg MS*
*From 1st June 2026
- While it typically takes three years to achieve all Fonterra Organic’s certification requirements, some of the required certifications can be achieved within two and a half years
- Once a farm reaches this stage it’s milk can be sold in a limited number of markets
- To recognise this benefit to the programme, if farms meet all Fonterra Organic Utilisation Certification requirements, they are eligible to receive an additional utilisation incentive on top of the conversion incentive they are already receiving
- Farmgate Milk Price + Conversion $0.70 + Utilisation $0.25 / kg MS*
*From 1st June 2026
On-farm economics
Whilst an organic farm will typically have lower stocking rates and in many cases lower production this doesn’t mean overall farm profitability is always impacted. Recent industry data from Dairy NZ’s DairyBase has indicated that when benchmarked alongside conventional organic farms typically have:
- Revenue per hectare which is on par or slightly lower
- Lower expense per hectare – with slightly higher labour costs being offset by savings on fertiliser and brough in feed
- Higher profit per hectare and kg/MS
*DairyBase 2022/23, 2023/24 & 2024/25 seasons
If you are a member of DairyBase you will be able to set up a custom report to compare your operation alongside the organic benchmark.
Dairy NZ also provides a case study on 168 ha self-contained, organic farm in Coastal South Taranaki if you would like to further explore the financials of an organic dairy system.
A GROWING ORGANIC OPPORTUNITY
“Embracing Organic practices has proven to be a great business decision. It’s future proofed our farm and boosted profitability.”
— Mark Spooner, Fonterra Organic Farmer
