5 Oct 2015

Mymilk off to a strong start

2:30 pm on 5 October 2015

A subsidary of Fonterra, set up to grow the co-operative's share of South Island milk, says it has more than 20 suppliers, within its first year of operating.

MyMilk was launched in December last year to target farmers in the Canterbury, Otago and Southland regions who are not currently supplying Fonterra.

MyMilk allows farmers to supply milk for up to five years without having to buy shares in the co-operative and it matches Fonterra's advanced rate payments throughout the season.

Mymilk chief executive Richard Allen said the South Island was targeted because of the significant increase seen in milk supply.

Mr Allen said they had signed up around 20 farms initially by the end of the first season, but it was improving now.

"We've now had a number of more farms sign up since then, so (a) really good start. If you look at the composition of the types of farms that we've had sign up, I think we had around 15 conversions, we had four win-backs and a few come in under our recent change to eligibility, which allowed for first dairy farm owners to come in through MyMilk.

"The milk price environment we've seen over the 12 months or so has reduced the number of conversions that we've seen in the South Island, so I don't think it's put them off, it's just deferred them for a season or two. I think we'll look to at least double the number of farms this year, that's the plan, if the milk price continues to strengthen like we've seen over the past few weeks then we could get a lot more than that."

Mr Allen said three suppliers had already bought shares and transitioned into Fonterra.

He said the company has not yet released a final milk payout.