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
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
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.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
