Under mymilk, farmers are invited to apply for one-year contracts, renewable for a maximum of five years, without the obligation to buy shares.
Conditions have become more competitive, particularly in the south of the South Island, and Fonterra is keen on regaining market share because every additional kilogram of milksolids generates improved cost synergies for its big South Island plants.
Fonterra's Farmsource initiative is a technical and financial support package aimed at the major dairying regions throughout the country.
"We definitely want to stop market share loss," Spierings said last week. Under mymilk, there is a two-year delay between signing up to the deal and delivering the milk.
"We still expect a drop [in market share] in this financial year," Spierings said. "We are getting market share back, but that milk will only come in in 2017."
Although market share loss was a concern, Spierings pointed out the co-op was taking in 24 per cent more milk than it was four or five years ago.
"Yes, the market share is lower, but a 24 per cent increase is a lot of milk," he said. "But it's definitely an issue on my radar. That's why we launched mymilk and that's why we are much more active around Farmsource to really attract and retain farmers."
Monitoring of the amount collected by independent processors is required under the Dairy Industry Restructuring Act, which allowed Fonterra to become established in 2001. The act also contains provisions to promote the efficient operation of dairy markets in New Zealand through contestability in the farm gate and factory gate markets.
The Commerce Commission will next year report to the Government on the state of competition in the dairy industry.
Palm kernel dip points to dairy decline
Palm kernel imports fell sharply in August, providing more evidence of a likely decline in local dairy production this season.
Statistics NZ data showed imports of palm kernel - a key feed supplement for dairy farms - fell to 110,679 tonnes in August from 193,471 tonnes in July and from 138,494 tonnes in August last year.
Palm kernel has played a key role in increasing New Zealand dairy production over the past 10 years or more.
Rabobank said there were mounting expectations of a "sizeable reduction" in New Zealand milk flows during the current season, which was contributing to market sentiment.
The bank expects a fall of between 8 and 10 per cent this season compared with last season.
Fonterra last week said milk production was likely to fall by 5 per cent this year, compared with an earlier forecast of a 2 to 3 per cent decline.
Production has been affected by a colder than normal winter, and very low milk prices have started to be reflected in reduced output. Looking ahead, production may also take a hit if the current El Nino weather pattern results in drought.
Dairy Companies Association of New Zealand data showed that national production started to decline in August, with 116,682 tonnes of milksolids produced compared with 117,546 tonnes in August last year.
National production since March had been running higher than last year's, thanks to an unusually productive late autumn flush.
In NZX dairy futures, prices continue to hold healthy premiums over GlobalDairyTrade prices, based on the likelihood of reduced supply, and pointing to firmer prices at next week's auction.
While New Zealand production looks to be in decline, seasonal milk supply is strong in Europe, according to Rabobank. "The supply taps are yet to be turned off," the bank said, "with production edging up 2.5 per cent for July 2015."
