Fonterra has announced a record final milk price for its organic dairy farmers, with the cooperative paying NZ$14.13 per kg of milk solids (kgMS) for the 2025–26 season.
The payout surpasses the previous record of NZ$12.35/kgMS recorded for the 2024–25 season, reflecting continued global demand for organic, grass-fed dairy products.
Fonterra has also forecast an organic milk price midpoint of NZ$14.30/kgMS for the 2026–27 season, with a forecast range of NZ$13.30 to NZ$15.30/kgMS.
The new-season forecast was announced alongside Fonterra’s FY26 results, which reported a final conventional farmgate milk price of NZ$9.69/kgMS. The organic price therefore represents a significant premium over the cooperative’s standard milk price.
Global Demand Drives Organic Premium
Fonterra said the record organic payout reflects continued global demand for organic and grass-fed dairy.
The cooperative’s head of milk supply, Lisa Payne, said the stronger new-season forecast builds on the momentum created by the record 2025–26 organic milk price.
Fonterra’s organic programme has been operating since 2002 and currently includes more than 100 fully certified farms in New Zealand’s North Island.
Fonterra Plans Organic Supply Expansion
The cooperative is working to expand its existing organic milk pool in the North Island while encouraging farmers in the South Island to join the programme.
Fonterra plans to begin processing organic milk in the South Island from the 2028–29 season, creating additional opportunities for farmers interested in organic production.
The expansion comes as the cooperative seeks additional organic milk supply to meet customer demand.
Premium Highlights Value of Differentiated Milk
The widening gap between Fonterra’s conventional and organic milk prices highlights the commercial value that differentiated milk streams can command when supported by strong consumer and international market demand.
For dairy farmers, the result also illustrates the potential of certification and production systems aligned with specific market segments to generate higher farmgate returns.
Fonterra’s broader strategy is increasingly focused on high-value dairy products and ingredients, with global demand for protein and specialised dairy products supporting its B2B business.
The record organic payout and planned South Island expansion indicate that Fonterra sees further growth potential in the organic dairy segment.
Source: Dairynews7x7 07 Oct, 2026 Read full story here
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