Open Country Dairy (OCD), which is the second largest milk processor in the country, is trying to get more suppliers.
In order to get suppliers away from Fonterra, OCD is also giving new and existing Waikato suppliers a new milk payment option that is similar to the co-but op’s better.
Its new “milk price plus” programme guarantees farmers 5c/kgMS more than they would have made with Fonterra’s farmgate model and a better advance rate.
Steve Koekemoer, the CEO of OCD, says that the company is giving Waikato farmers two payment options because some farmers are used to working with traditional farmgate milk price models that are based on the markets.
“Right now, we pay our farmers in full every three months. This keeps up with the market prices and gets cash back to the farmers faster. We’ve always thought that farmers should get their money back more quickly,” he says.
OCD’s Waharoa plant just got a new cheese capacity upgrade and a lactose plant, but it needs more milk to fill it.
Yashili, another Waikato milk processor, is also looking for new cow, goat, and sheep milk suppliers. The Chinese company runs a factory in Pokeno that makes milk powders and cream, most of which are sent to China.
On its website, the company tells Waikato farmers that they can join “one of the world’s leading producers of premium products” if they are interested.
Yashili had a site at the National Fieldays for the first time.
Olam, a Singaporean company, is on track to start processing milk at its new plant in Tokoroa in August of next year. The company is working hard to get farmer suppliers on board.
Happy Valley Milk is trying to raise money in Otorohanga to build a new plant.
Andrew McGiven, who used to be president of Federated Farmers, told Rural News that it seems like competition is heating up again in Waikato.
McGiven, who works with Fonterra, says that competition can be good for farmers if they live in the right areas. But he is worried that Fonterra will lose too much milk to competitors.
“I think that if Fonterra’s milk supply gets too scattered, we may lose a co-op that can set the national milk price. If this role/responsibility falls to a corporate processor, milk premiums for farmers may go down, just like in the Australian dairy industry.
“But I also think we have a long way to go before we have to think about that possibility.”
McGiven says that no processor has reached out to him yet, but he has heard radio ads for Open Country.
