The country's smallest dairy co-operative, Tatua, has confirmed a payout for the past season well above that of dairy giant Fonterra, and says it is focussing on adding value.
The Waikato co-op is paying its 109 suppliers $7.50 a kilogram of milk solids.
Fonterra paid $6.40, including milk price and dividends, for the past season.
Tatua chief executive Paul McGilvary says developments such as a new food plant have contributed to its strong result.
"We have a limited milk supply and we focus all of our efforts on adding value to that milk."
Mr McGilvary says Tatua has a new food plant to create high-value cream-based products and has established another plant over the last year to produce lactose solids, sold primarily for milk powder standardisation.
Tatua was able to hold back 54 cents a kilogram from the payout to provide financial stability against unsettled international trading conditions.