A new agreement will see Nestlé fund an additional payment to farmers who achieve one of the three levels of Fonterra’s The Co-operative Difference framework during the 2023/24 season. Depending on the number of farmers that meet these levels, Fonterra expects the additional payment to farmers to be about 1-2 cents per kilogram of milk solids.

Fonterra chief executive officer Miles Hurrell welcomes Nestlé’s continued support of farmers who are making continuous improvement with on-farm sustainability.

“We are delighted to work in partnership with Nestlé to recognize the Co-op’s farmers who are at the forefront of industry best practice. By working in partnership, we can grow sustainably together as we aim to produce lower carbon milk into the future,” says Hurrell.

Globally, Nestlé is investing 1.2 billion Swiss Francs (NZD2.25 billion) by 2025 to advance regenerative agriculture and reduce emissions, aiming to source 50% of their ingredients through regenerative agriculture methods by 2030.

Nestlé New Zealand chief executive officer Jennifer Chappell says their success relies not just on working with processors, but also farmers who share this vision.

“Nestlé has sourced dairy from New Zealand for well over a hundred years and we will continue supporting farmers, alongside our partners, to develop new economic opportunities and reduce their greenhouse gas emissions.”

Fonterra has an ambition of being net zero by 2050, with 2030 targets including a 30% intensity reduction in on-farm emissions, which Nestlé welcomes.

“This move will encourage even greater action by farmers, researchers and policy makers in support of a just transition for the dairy industry, which in turn will help the industry and dairy farmers make the most of the economic opportunities presented by the shift to lower emissions,” says Jennifer Chappell.