mymilk enters dairy industry targeting new milk

Media release - 11 December 2014

mymilkTM enters dairy industry targeting new milk

A new milk sourcing company - backed by Fonterra but operating as a standalone entity - is entering the dairy sector to compete with other milk processors for milk supply.

mymilkTM is based in Christchurch and, for the first season at least, will focus on attracting milk in the Canterbury, Otago and Southland regions. Chief executive Richard Allen said mymilkTM is aimed at dairy farms who do not currently supply to Fonterra.

“This is a flexible, reliable and smart offering which is pro farmer and supports the Fonterra co-operative model which underpins New Zealand’s dairy industry.

“mymilkTM is South Island-based. Farmers who want to supply Fonterra, but are not ready to purchase a shareholding, can apply to supply the co-operative though mymilkTMfor a maximum of five years. We offer short-term flexibility and long-term stability, backed by Fonterra’s scale, systems and global reach.

“The competition for milk in New Zealand is increasing and to be successful you need to be flexible and nimble. That is how mymilkTM will operate. mymilkTM will look to attract non-Fonterra supplying farms and new farm conversions to bring new milk into the co-operative.

“A one year commitment allows mymilkTM farmers to keep their options open. We’ll pay a competitive milk price, and with no initial share obligations, it makes it simple for our farmers to focus on where they are now, while making an important step towards becoming a Fonterra farmer shareholder."

Mr Allen said other processors, including offshore entrants, had been attracting farmers on the basis of ‘no shares’ despite paying less than Fonterra for milk. Farmers who supply mymilkTM will know they are supporting the New Zealand dairy industry, and making a smart choice for their business.

“This is a pragmatic response to recent dynamics in the industry. Just as most New Zealanders want to own their homes, we know that many dairy farmers want to be part of the co-operative model and own a share of the industry. In the same way young families face the challenge of raising equity to buy their first home, new dairy farmers face many costs and need time to raise the equity to ‘share up’ into Fonterra. mymilkTM gives farmers the time to build their equity while at the same time having the reliability arising from supplying a company backed by Fonterra.

“We will offer a one year supply contract, renewable for a maximum of five years - rather than the multi-year contracts some processors insist on. This provides dairy farmers with greater flexibility to make the best decision for their business.

“mymilkTM is a simple and smart offering which we believe will be attractive to the sector. It will benefit farmers, and support the co-operative model which underpins the success of the New Zealand dairy industry.”

mymilkTM
NewFonterra-backed milk sourcing start-up
Targeting milk from non-Fonterra supplying farms
Will pay a competitive milk price
Maximum 5 year supply period

© Scoop Media