Organic Milk Price and financial information

Organic Milk Price

Introduced in 2016, the Organic Milk Price is designed to give farmers a fair market value return.
Historically delivers around a 30% premium* to the conventional Farmgate Milk Price.
Contributes to shared overheads and earnings for the wider Co-op.
Overview of the organic milk price and associated incentives can be found here.

* FY17-26 seasons, future returns may vary

Advance rate and season forecast

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 the following incentives:

Conversion incentive

Payments start from the commencement date in a signed Fonterra organic contract
Paid over and above the conventional Farmgate Milk Price
Farmgate Milk Price + $0.70 / kgMS*

Utilisation incentive

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, farms are eligible to receive an additional utilisation incentive on top of the conversion incentives they are already receiving
Farmgate Milk Price + $0.70 + $0.25 / kgMS*

*From 1st June 2026

Talk to us about conversion incentives

On-farm economics

Whilst an organic farm will typically have lower stocking rates and in most 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

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.

*DairyBase 2022/23, 2023/24 & 2024/25 seasons

Read DairyNZ’s financial case study

Organic Milk Price & financial information