Rewarding farmers for lower emissions milk

New Zealand farmers are amongst the world’s most emissions efficient dairy producers¹, and as a co-operative, we are committed to reducing our emissions even further on our farms and across our operations. The Co-operative Difference is Fonterra’s recognition programme for farmers which provides a framework for enabling best practice farming while mitigating risk.

There are three levels of achievement in the programme. The first involves meeting criteria around health and safety, animal wellbeing, looking after the environment, and data reporting. The second level focusses on the quality of the milk that farmers produce. And the third and final level celebrates farmers who consistently deliver the highest quality milk - they can unlock up to an additional 15 cents per kgMS.

Starting 1 June 2025, the Co-Operative Difference will be updated to reflect Fonterra’s climate commitments and 2030 target to reduce on-farm emissions intensity by 30% (between FY18 and FY30). Fonterra is introducing two new payments to recognise farmers who produce high-quality milk with lower emissions – one funded by customers to further reward our lowest-emission farms and the other funded by the Co-op.

How do these changes reward farmers?

New ‘Emissions Excellence’ achievement

Farmers who achieve the first level of the Co-operative Difference will receive an additional payment of between 1-5 cents per kgMS for milk produced at an emissions level lower than the Co-op’s 2017/18 baseline (901 kgCO2e/Tonnes FPCM² from on-farm activity).

Customer funded incentives

On-farm Solutions
All farms that achieve any level of the Co-operative Difference will be eligible for access to on-farm tools or services, such as herd efficiency services, which are designed to support emissions efficiency improvement. Find out more here.

New ‘Emissions Incentive’ Payment
Farms that achieve the Co-operative Difference and have one of the lowest emissions footprints in the Co-op will receive an Emissions Incentive payment of between 10-25 cents per kgMS. Find out more here.

At NZMP^TM, we understand the critical role of sustainability for customers’ with climate targets. Fonterra will continue to deliver tools and services to support farmers with emissions efficiency on-farm while continuing to drive emissions reductions and efficiencies across our value chain. We look forward to bringing our sustainability progress to every NZMP^TM product you purchase.