Fonterra chief executive Theo Spierings has served notice on farmers and the rest of the dairy industry that they will need to lift their game on environmental performance.
Mr Spierings told the co-op's AGM in Southland on Wednesday the industry can't keep growing the way it has in New Zealand without changing the way it deals with sustainability issues, because it's having too much of an impact on the environment.
He says the industry can't continue to take a one size fits all approach to environmental solutions and Fonterra's going to change that.
Mr Spierings says high cost, high impact sustainability solutions are needed on farms. This will differ from region to region; in some it could mean water or effluent treatments, in others, additional feeding.
"The next step to really go to long-term sustainable solutions, it's tailor-made, it's different farm by farm, but we are able to do that because we audit every farm every year."
He says that approach to sustainability and dairy farming is common practice in Europe and the United States.
Mr Spierings said another solution is a greater use of indoor farming, which allows farmers to boost cow numbers on the same area of land while reducing nitrogen runoff.
He says Fonterra will shortly release a draft sustainability plan.
