Organic milk co-op eyes $7/kgms payout

The NZ Organic Dairy Farmers Co-Operative is telling four Waikato farmers who joined up this season they could earn a predicted $7 per kilogram of milksolids reports the Waikato Times. The fledgling Taranaki-based co-op's forecast payout is $2.45 more than Fonterra's forecast for the season and $1.40 more than what Fonterra is offering for organic milk. Russell Simmons, who founded the co-operative and is supply manager, said the co-operative had arrived at the figure using a 58c exchange rate, so if the rate was at 63c, as it was yesterday, the payout would be closer to $6.50. "In the next six months it might come down and it might go up," Mr Simmons said. Milk collection would begin from 25 farms across the North Island next month, once the factory, in Okati, Taranaki, was completed, he said. Milk tankers would call at suppliers' farms two or three times a week."We are building it at the moment ready for this season," he said. "We formed simply because we thought there's a huge market opportunity and organic dairy farmers wanted to control their own destiny." Farmers from the Hauraki Plains, Huntly, Otorohanga and Te Awamutu two already supplying organic milk to other processors and two who have made the conversion are among those who will supply an estimated 22 million litres of organic milk to the co-operative for export this season. Mr Simmons aimed to recruit a further 20 suppliers to the co-operative next season, doubling collection to 44 million litres. "We are at 70 per cent capacity for next year already," he said. Converting to organic and obtaining the correct certification took three years and cost about $1500 per farm per year.