New Zealand dairy giant Fonterra is preparing to increase premiums to organic milk suppliers who choose to meet United States Department of Agriculture (USDA) standards.
Go deeper with GlobalData
Fonterra said it aims to have all its organic milk meeting the USDA standard within the next few years, a move that will enable the cooperative 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,” Carmont said.
The company said it would take several years for Fonterra to meet the USDA standards, as cows that have been subject to antibiotic treatment must be ruled out.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
