Dairy company Miraka offers 20c bonus to suppliers under farming excellence scheme

Miraka, a minnow in New Zealand's multi-billion dollar export dairy processing industry, has introduced a new farming excellence programme that will pay a premium of 20c per kilogram of milk solids above its base milk price.

The predominantly Maori-owned Miraka, which started in 2011, has a whole milk powder factory and UHT plant at Mokai, 30 kilometres northwest of Taupo.

It has nearly 100 farmer suppliers within an 85 km radius of its factory who are paid the going farmgate milk price offered by Fonterra Cooperative Group [NZX: FCG], plus 10c/kgMS on top.

Chief executive Richard Wyeth said meetings this week with its farmer suppliers outlined what's in it for them from the Te Ara Miraka farming excellence programme which will be introduced in the new season on June 1, 2016.

The five planks for the incentivised programme are environment, milk quality and food safety assurance, people and staff, animal welfare, and prosperity.

"Te Ara is about telling our story and making it environmentally robust and being able to be completely authentic with that. It's not just us saying we're better but setting a standard for all farmers," Mr Wyeth said.

In an online blog, Grant Jackson, Miraka's general manager of milk supply, said the company wants to improve its profitability and that of its suppliers through efficiencies to create a first class raw milk product and a lower environmental footprint.

"The first step is to introduce the programme to our farmers and provide additional tools, resources and access to experts to help drive greater profitability, stronger communities and improve stewardship of the land," he said.

Wyeth said Miraka's suppliers were realistic that returns this season were going to be low again due to the decline in global dairy milk prices but were looking for better results next season.

His pick is that Fonterra will hold its forecast $4.60/kgMS farmgate milk price tomorrow although that's under pressure given global dairy prices. "They've been bullish until January/February in previous years," he said.

DairyNZ has estimated dairy farmers need a payout of $5.40/kgMS to be financially sustainable.

(BusinessDesk)

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