Synlait has more than doubled its Lead With Pride potential premiums and incorporated a palm kernel-free dimension.
Fonterra will apply demerits and payment deductions from September on C and D grades in the Fat Evaluation Index (FEI), an indirect measure of how much palm kernel is being fed.
Repeated C grades will incur 10% milk payment deduction and D grades a loss of 20% plus the costs of confirmatory testing.
In November Open Country Dairy will join Fonterra in collecting and segregating organic milk supplies, through its Awarua plant in Southland.
A group of suppliers will include the German investor-owned, six-farm Aquila Sustainable Farming with 5500 cows and an expected annual 2.25 million kilograms of milksolids.
Open Country chairman Laurie Margrain said it has not yet been decided what organic dairy products will be made but he ruled out local liquid.
It is the company’s first venture into specialised milk supply, aside from the normal winter and shoulder incentives.
Fonterra has forecast $8.10/kg milk price for its 50-plus certified organic supply farms and a lower price for farms in the three-year conversion period.
Also on the plus side, Fonterra has just ended the winter milk supply period of 61 days, during which farmers got premium payments for either contracted or uncontracted milk.
In the North Island contracted milk was worth an extra $2.85/kg milksolids in the first and fourth contract periods and $3.50 more, or more than $10/kg in total, during the second and third contract periods, covering June.
The payment rates were 50c and $1.20 for uncontracted milk.
Contributions towards transport costs from the farm to the nearest of four North Island processing plants at Kauri, Takanini, Waitoa and Longburn were deducted from the premiums.
In the South Island the contract rates were $3.60 and $4.25 and the uncontracted rates 70c and $1.40, minus some of the costs for the long distances to the Christchurch local market processing site.
Synlait said its Lead With Pride (LWP) programme will be targeted to achieve more sustainability on farms by reducing greenhouse gas emissions, water consumption and nitrogen losses.
A quarter of its 200 supply farms to the Dunsandel, Canterbury, plant are LWP certified to gold standard or better and a further 30 are working towards certification.
The incentive for Gold Plus will be raised from 6c to a potential 20c and for Gold Elite from 12c to 25c.
Those premiums include 8c/kg for farms that are 100% palm kernel-free, milk supply manager David Williams said.
The average premium paid by Synlait in 2016-17 was 14c in seasonal and value-add payments but Williams said last season’s figure will not be released until the annual results in September.
The company is seeking A2 milk and encouraging participation in its LWP programme for the dairy farms contracted to supply the new northern plant at Pokeno.
Miraka supply manager Grant Jackson said the incentive payment in its quality assurance programme has been left at 20c/kg and the average paid will continue to be around 13c.
Almost all of its 106 suppliers are enrolled and the standards were uprated to include an on-farm biosecurity policy and to recognise soil moisture and vat monitoring systems.
The milk quality parameters produced an extraordinary improvement in cell counts across the supply over the past two seasons, he said.
Miraka had awarded the amazing achievement by Wairarapa Moana Incorporation dairy farm 14, under its manager Arik Asmedi, of scoring 100 points in the independent audit last season.
“We didn’t think it could be done so we will have to increase the requirements,” Jackson said.
All Miraka farms now have fenced waterways and isolated shed water use meters to help improve water consumption and effluent system efficiencies.
Fonterra said it has not finished consultation with its suppliers over A2 milk opportunities and is not yet in a position to offer a premium price or confirm where A2 products will be manufactured.
Benefits go beyond the cash
Today's best practice will become tomorrow’s compliance, Synlait’s award-winning suppliers Michael and Susie Woodward believe.
Sharemilkers with a 1030-cow herd on the Tapatoru Dairies of the Theland Purata Farms Group, they won the ANZ Supreme Lead With Pride Award and the PwC Excellence in Social Responsibility Award for last season.
They have been involved in the Lead With Pride programme since the launch in 2013, including some administrative input by Susie at the beginning when she could see they were already doing much of what was required.
“Everything in the LWP is designed to make you the better employer and animal manager,” Michael said.
“It provides a way of tackling all the issues coming at the industry and making us sustainable in the future.”
The Woodwards have leadership excellence as one of their core values and want to be better than best practice in the industry.
Previously they have won the Canterbury Farm Manager of the Year in 2011 and the Canterbury Share Farmer of the Year in 2016 and Michael was gold medallist in his farm management diploma year at Lincoln University.
He has worked firstly with Synlait Farms and now Theland-Purata for 13 years and values like leading by example have been consistent through that time, he said.
Presently at Gold Plus level in LWP, they aspire to improve to elite level, which might require more irrigation development and other upgrades from the farm owners.
The increase in premiums will be welcome, though split with the farm owners, and the Woodwords said the real benefits of the LWP are intrinsic – better staff engagement and retention, better animal health, more cows milked for longer.
They employ five staff, three of them from overseas.
