Battle for milk
OPINION: Fonterra may be on the verge of selling its consumer business in New Zealand, but the co-operative is not keen on giving any ground to its competitors in the country.
Federated Farmers dairy chair Richard McIntyre says he wants to know what support Fonterra will be providing farmers around achieving the Scope 3 target.
The co-operative is targeting a 30% intensity reduction in on-farm emissions by 2030 from a 2018 baseline - reducing emissions intensity by tonne of FPCM (fat and protein corrected milk) collected by Fonterra.
Fonterra has divided the target into four buckets: 7% reduction through farming best practise such as feed quality and improving herd performance, 7% reduction through novel technologies, 8% reduction through carbon removals from existing and new vegetation and 8% from historical land-use change conversions to dairying.
McIntyre says when broken down into four buckets, the 30% reduction target does sound much more achievable.
"Make no mistake though, it's still incredibly ambitious and won't be easy by any means," he told Dairy News.
"Fonterra needs to remember they're the ones taking on this challenge and they will have to really get in behind farmers, along with the likes of DairyNZ, to help them achieve it.
"This can't simply be a case of setting a goal and telling farmers that they must meet it."
McIntyre is meeting Fonterra this week to raise some questions about "how they plan to support farmers, what tools are in the pipeline, and how they plan to recognise existing planting on farms".
McIntyre says the key focus for farmers will be the 7% from on-farm change - of which farmers have already achieved 2% since 2018.
He says Fonterra has set themselves a huge challenge and it is up to them to support and enable their suppliers to achieve these targets.
"It's going to be important that Fonterra brings their suppliers with them.
"There are still a lot of questions to be answered in terms of how this will be implemented and exactly what will be asked of farmers in terms of change on individual farms, incentives and potential increases in record keeping and reporting burdens."
Kaikohe farmer Richard Dampney, who unsuccessfully moved remits on reducing the size of the co-operative board, says any moves to improve sustainability on farm must be profitable for farmers.
"If it isn't profitable, it isn't sustainable," he told Dairy News.
He says for small Northland farms producing an average of 70,000 kgMS per season, the sudden requirement to build a new effluent pond worth $2 million would shave $3/kgMS off the milk price and that's not sustainable.
"I know a farmer in Northland producing 550,000 kgMS who has put his farm on the market and is willing to sell for $2m less than what he could get, just to get out of the industry, because of the growing requirements around sustainability."
Dampney says Fonterra farmers are being forced by major customers like Nestlé and Mars to drive down emissions.
"They want to piggyback off our low emissions dairy product," he says. "I don't buy the argument that they will go elsewhere for dairy products: who else can provide them such high quality products day in, day out?"
Fonterra chief executive Miles Hurrell says the co-op is responding to growing sustainability ambitions from customers and financial institutions, along with increasing market access, legal and reporting obligations for dairy.
Hurrell told the co-op's annual general meeting in Methven last week that it understood the challenging rate of change shareholders are facing.
He says Fonterra is here to "assist shareholders along the way".
"Sustainability is at the top of agenda with customers and our competitors are moving with pace," he says.
