New dairy hub signs with creamery
The chances of being able to buy organic milk have risen with a deal between boutique producer Lewis Road Creamery and a new organic dairy co-operative.
Lewis Road Creamery has signed up to be supplied with milk by the newly launched Organic Dairy Hub Co-operative of New Zealand. Lewis Road’s founder, Peter Cullinane, is also an independent director of the hub.
News of the hub comes hard on the heels of the launch of Fonterra’s Anchor organic milk, which will be available in supermarkets from Monday.
Lewis Road already markets organic milk, but its deal with the hub would give it greater security of supply, Cullinane said.
‘‘We love organic farming and our goal is to make as much of our range as possible organic. However due to inconsistency of supply this has been a challenge for us and has meant our organic milk range isn’t always available,’’ Cullinane said.
He said the milk would not be as price competitive as Fonterra’s, which had the ability to set prices ‘‘on a whim’’.
The milk would not be available in the South Island. Lewis Road would look at subcontracting to supply the South Island market.
The organic farmer who has fronted the hub, Bill Quinn, said the co-operative had 33 shareholders and 10 suppliers for a June 1 start.
There were a ‘‘significant’’ numbers of farmers lined up to supply in the 2016-17 season. Of the 10 due to supply this season, six were former Fonterra suppliers.
Quinn said most of the farmers were from Northland, because Fonterra was not running a supply base in the region. Fonterra had indicated it wanted to lift organic production to 600,000 kilograms a year, but none of that growth would be in Northland.
He said there was a significant waiting list to exit Fonterra as opposed to a waiting list to get into other companies.
‘‘Many of the farmers have been in the Fonterra organic programme for 15 years, they’ve seen it grow from nothing to 127 farms, and then fall to 73 because they don’t have confidence in Fonterra,’’ Quinn said.
The hub was a wholesale milk business without a physical base, operating by sub-contracting milk collection and administration.
Besides Lewis Road, it sold milk to several other operations, from one-person cheese businesses through to companies which wanted hundreds of thousands of litres of milk.