Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Fonterra to Raise Organics Supplier Premiums

Fonterra to Raise Premiums To Suppliers Who Meet USDA Organics Standards

Fonterra is preparing to increase premiums to organic milk suppliers who choose to meet United States Department of Agriculture (USDA) standards.

Fonterra aims to have all its organic milk meeting the USDA standard within the next few years, a move that will enable the co-operative to compete effectively in the US where demand for organic dairy products is expected to increase tenfold over the next five years.

Rick Carmont, Organics Business Manager for Fonterra, says organic suppliers will ultimately benefit from the move by getting paid more for their milk.

"Currently, Fonterra's organic suppliers receive an additional 10%, and we will increase this premium for suppliers who meet the USDA standards. Those organic suppliers who choose to meet the standards will need to make a few modifications to their operations, and we want to compensate them for helping Fonterra create a competitive advantage. The increased premium has to cover costs, as well as provide a good incentive."

Mr Carmont says meeting the USDA standards will provide a competitive advantage.

"US consumers are looking for the USDA seal on the organic products they buy, as it assures them they are buying the highest quality organic products. Therefore, Fonterra has to be able to provide our customers - major food manufacturers - with organic ingredients that meet the USDA standard and carry this seal. This is essential if we are to compete effectively."

Fonterra currently has 22 organics suppliers and processes organic milk at three Waikato factories. Approximately 17 million litres of milk will be delivered this season. The company is actively recruiting new organic suppliers.

A final decision on the exact premium is subject to Fonterra completing its analysis.

It will take several years for the company to meet the USDA standards as cows that have been subject to antibiotic treatment must be ruled out.


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Voluntary Administration: Renaissance Brewing Up For Sale

Renaissance Brewing, the first local company to raise capital through equity crowdfunding, is up for sale after cash flow woes and product management issues led to the appointment of voluntary administrators. More>>

Elsewhere:

Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>

ALSO:

Media Mega Merger: Full Steam Ahead For Appeal

New Zealand's two largest news publishers have confirmed they are committed to pursuing their appeal against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>

ALSO:

Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>