Fonterra will expand its organic milk business to help meet growing demand, after its review on how best to position this specialty business for sustained growth.
At meetings with farmers this week, global business manager for organics, Craig Deadman, said the Co-operative is committed to developing its organic milk supply over the long term to meet escalating demand.
Fonterra is also increasing the total certified organic payment to US$1.50 per kg milk solids from 1 June 2015.
This reflects a new farmer payment of an additional 45 cents per kgMS to contribute to the costs of maintaining organic certification, in addition to the certified organic milk premium of $1.05 per kgMS.
Deadman said while organic dairy remains a specialty product, more people are choosing organic dairy products and he expects this trend to continue, particularly in Southeast Asia, China and in the US.
“Chinese consumers are quickly developing a strong liking for organic dairy and organic options are always welcomed,” he says.
He added that Asian consumers also favor organic milk powders, especially infant formula and fortified milk powders.
“We have recently launched Anchor organic milk powder in China and it is already proving very popular with shoppers there.”
He said that growing Fonterra’s organics business is all about developing and selling higher-value specialty products at premium market rates.