What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
This follows strong interest from farmers wanting to join the programme.
Anne Douglas, group director of Fonterra Farm Source, says the expansion will be welcome news for those farmers.
"We’re pleased to be able to extend a specialty milk offering like this to South Island farmers and support them to be a part of a well-established organic programme,” Douglas says.
“We’re now working towards processing organic milk in the South Island from 2028/29, while we also focus on helping converting farmers achieve organic certification over the next couple of seasons.”
Douglas says the expansion will help Fonterra meet the growing demand for organic products globally and strengthen the contribution organics makes to the wider Co-op’s earnings.
“It’s another example of the value the Co-op can create for its shareholders when customer demand, on-farm capabilities and long-term investment decisions are all aligned,” she says.
Record Forecast Organic Milk Price
The confirmation of the expansion comes as Fonterra announces a record forecast Organic Milk Price for the current season.
The 2025/26 forecast Organic Milk Price range is now $13.90 - $14.10 per kgMS, with a record midpoint of $14.00 per kgMS. This is up from the previous forecast midpoint of $13.35 per kgMS announced in February.
Fonterra also announced today an opening forecast range for the 2026/27 Organic Milk Price of $13.00 - $15.00 per kgMS, with a midpoint of $14.00 per kgMS.
Strong Global Demand For Organic Dairy
Fonterra's general manager organics, Andrew Henderson, says the forecasts reflect the value global customers place on high quality New Zealand organic dairy.
“Our organic dairy remains highly sought after and that demand reflects the work our farmers put in each day to produce high-quality organic dairy that meets those expectations,” Henderson says.
“We’re looking forward to supporting the farmers who have signed up to join our existing pool of organic farms, including those who will now be converting their farm systems.”
Support Available For Farmers Converting To Organics
Fonterra’s support package for farmers making the switch to organic includes conversion incentives, advice, networking opportunities and linking farmers up with peers who can mentor them through the process.
Henderson is encouraging farmers still considering their options to get in touch and learn more about the organic business.
“There’s still room to expand our organic programme and we’re welcoming conversations with farmers in both the North and South Islands about what converting to organics might look like for their business.”
