Synlait Blames “Perfect Storm” for $80m Half-Year Loss
Canterbury milk processor Synlait is blaming what it calls "a perfect storm" of setbacks for a big loss in its half year result for the six months ended January 31, 2026.
The viist to the Oxford farm of DairyNZ deputy chair, Cameron Henderson, included a ceremonial native tree planting, and a look at the EcoPond methane mitigation system in operation.
Aimed at reducing emissions and improving on-farm biodiversity, the Nestlé-Synlait partnership rewards farmers with a premium on their milksolids payout in return for their participation in one or more environmental initiatives.
Options include:
- EcoPond, an effluent pond treatment service that reduces methane emissions by over 90%, using core technology developed by Lincoln University in partnership with Ravensdown.
- Farm efficiency projects, including the use of a tool that creates a digital twin of their farm, benchmarks its sustainability, profitability and production against others, and models the impact of potential changes.
- Native tree plantings, with up to 18,500 native trees to be planted each year for the next five years, as part of Synlait's Whakapuāwai programme which has already distributed more than 327,000 native plants since 2019.
- Joining an on-farm biodiversity pilot project to demonstrate what's possible in a dairy farming environment.
- Quickly onboarding new emissions-reducing technology as it becomes available.
Synlait says nearly 40 Canterbury dairy farmers are participating in the scheme.
Chief revenue officer Hamish Yates couldn't tell Dairy News the size of the premium but said "it makes it worth their while".
Yates said the partnership's growth is a great example of how businesses can work together to make a real difference to the planet.
"Synlait has a history of pioneering sustainability. This partnership means we, and our farmers, will maintain our leadership position.
"It has been eye-opening to see the passion Nestlé, as one of the world's largest companies, has for helping New Zealand farmers reduce their emissions. It's a values-led approach that benefits everyone involved and the environment."
Yates said Nestlé was a significant customer and a large part of Synlait's ingredient business. Nestlé aimed to achieve net zero greenhouse gas (GHG) emissions by 2050 and dairy sourced from New Zealand was a critical part of that.
Nestlé global head of sustainability nutrition, Katja Seidenschnur, said that partnerships of this kind were instrumental for all parties to reach their emission targets.
"Dairy sits at the heart of Nestlé's business and at the heart of our climate challenge.
"Addressing emissions at scale requires partnership - across the value chain and on farm. That's why we're working closely with our dairy suppliers and farmers to turn ambition into action, through practical approaches to climate, methane and regenerative agriculture."
EcoPond Now A Mobile Service
The Synlait-Nestlé visit to Cameron Henderson's farm featured a look at the latest iteration of the Ravensdown and Lincoln University-developed EcoPond system in operation.
The system arose out of research by Professors Keith Cameron and Hong Di that showed that treating dairy shed effluent with a flocculent agent had multiple benefits including very effective suppression of methane and E.Coli, and altering phosphorus content to a more pasture-friendly form.
As development continued it was realised that there is no need for most farms to have their own infrastructure. EcoPond now takes the form of a truck-mounted plant that visits client farms and pumps effluent through the treatment machinery and back to the pond. The effects of each treatment last for at least several weeks.
Around 30 of the farms in the Synlait-Nestlé scheme have opted for EcoPond and are among the first farms to be treated in the country.
EcoPond Director Elliot Mercer said Synlait and Nestlé's support has been crucial to enabling the development and earlhy deployment of the technology.
"This backing helped move the latest version of EcoPond from a prototype into something that is now cutting methane emissions on New Zealand farms today. We are working toward EcoPond being formally recognised as an approved methane reducing tool by the government's Greenhouse Gas Inventory, which would be a significant milestone."
Mercer told Dairy News that the original EcoPond idea involved a significant and "economically challenging" capital investment on farm compared to the visiting service now being offered.
"We extract the effluent, it goes through the manifold where we treat it and it's closed, it's returned back into the pond and is mixed as it's going," he explained.
"That allows us to get suppression for over six weeks. Then basically we just come back on a periodic basis.
"So from a business model point of view, that means they're just paying for a service instead of actually having to build a lot of infrastructure and have all that complexity on farm."
