Fonterra threatens to stop milk collection

Dairy processors in the European Union have been working on making milk production more sustainable for some time and now the New Zealand company Fonterra has decided to do the same. However, New Zealand's largest dairy cooperative does not offer a premium, but lagging dairy farmers run the risk that the milk will no longer be collected.

Fonterra is in a difficult phase, because the dairy cooperative wrote a letter last year loss of millions† The dairy cooperative wants to turn the tide with a new strategy, which was rolled out this week. The company wants to focus again on the 'core business': processing milk; from that point of view, it was recently announced that a j with FrieslandCampina is divested.

Fonterra mainly wants to process milk in a sustainable manner. In the view of the cooperative, this goes beyond mere attention to the environment, because attention must also be paid to people and animal welfare. It is also necessary to respond to changing market trends. With this, Fonterra hopes to remain a competitive dairy exporter on the world market.

No premium, but punitive measure
The dairy cooperative reports that dairy farmers who set the sustainability bar higher than the legal requirements are recognized. However, this does not mean that they are rewarded with a premium, as the other processors in New Zealand and Europe do. At Fonterra, lagging dairy farmers run the risk that the milk will no longer be collected.

Fonterra also threatened at the beginning of this year that it wants to get rid of the mandatory milk collection in some areas. Fonterra does promise support to dairy farmers in implementing sustainability aspects on their farms. In sales, Fonterra wants to communicate the application of grazing more clearly to its customers.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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