Fonterra focus on a2 remains in Waikato for now

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Fonterra's partnership with the a2 Milk Company (a2MC) is unlikely to impact on dairy farmers in the South for some time, with Fonterra confining its a2 processing to a single site in the North Island in the meantime.

''We've been watching the development of the a2 market for a number of years,'' the head of Fonterra Farm Source in Southland Mark Robinson said.

''While the market continues to grow, ultimately it will be consumer uptake that drives Fonterra's plans.''

He said that while Fonterra markets a2 products under the Anchor label, most of its production goes into ingredients for the Asian market.

At present, the co-operative's processing is confined to 100 farms supplying the Hautapu plant in the Waikato.

Robinson said farmers who were taking the opportunity to introduce a2 into their herds were in effect placing themselves in a position to take advantage of any potential future marketing opportunities.

''If the trend to a2 continues, then those farmers who have made the move will be well-placed to take advantage of value added opportunities,'' he said.

He said Fonterra's Hautapu site was well-equipped to cope with batches of product and also had the flexibility to adapt its processes as required for different markets.

When Fonterra announced the partnership with a2MC, it said the goal was to fast-track market growth and to open up opportunities for farmers to create additional value from their milk.

Robinson there were no specific timeframes for expanding a2 processing within the Fonterra operation, but as the market for the product matured and the promoted benefits of a2 became more widely understood, it was natural that more opportunities would be available for farmers.

''For the immediate future, we see the ingredients market continuing to take most of our output.''