When proposed changes to raw milk regulations were announced earlier this year Fonterra and many shareholders were less than impressed.
However, the proposals were just that and open to consultation which has produced changes most in the industry will accept as okay.
Primary Industries Minister David Carter today announced amendments to the Raw Milk Regulations, the rules by which independent milk processors can access raw milk from Fonterra.
“The Regulations ensure dairy processors can access raw milk when they are starting up and aim to support competition in domestic dairy products,” Mr Carter says.
“The changes follow an extensive consultation and review process on how best to achieve a fair and efficient dairy market in New Zealand.”
The key amendments are:
- Large independent processors who collect a significant quantity of milk directly from farmers will have a three-season limit for accessing regulated milk;
- The total quantity of milk available under the Raw Milk Regulations will be set at approximately five per cent of Fonterra’s milk supply, as provided for in the legislation;
- A range of maximum quantities will apply to processors accessing milk under the Raw Milk Regulations in different months of the season to reflect the seasonal nature of milk production;
- Processors who do not take much, or any milk, directly from farmers will be able to pay a fixed price for milk accessed under the Raw Milk Regulations and will not be subject to the “wash-up” process at the end of the season.
The aim of the changes was to foster competition without being unfair to Fonterra and I think that’s been achieved.