Fonterra is buying an 850 hectare dairy farm in Brazil, extending a global policy of developing sources of fresh milk in fast-growing emerging economies.
The farm would have two milking platforms with a total herd of 3,300 cows, producing milk by late 2014, the company said in a statement today.
The farm
would provide fresh milk in Brazil for Fonterra's South American joint venture with Nestle, Dairy Partners Americas, said chief executive Andrew Ferrier.
Global demand for dairy products is forecast to grow at a faster pace and outstrip the ability of New Zealand to supply, which has spurred Fonterra to source milk elsewhere, including from its own farms.
Last year, the world's largest dairy exporter got 6.6 billion litres of milk, or about 31% of its total, from farms outside of New Zealand.
"Developing sustainable, high-quality milk supply for key customers in rapidly developing economies such as Brazil and China is a powerful way of achieving our strategy of being the natural source of dairy nutrition for everybody, everywhere, every day," Ferrier said in the statement.
No price was given for the farm in Brazil's Goias State.
Fonterra has signed a conditional sale and purchase agreement subject to final due diligence and is aiming to settle next month.
Ferrier said Fonterra aims to add more dairy farms in Brazil, South America's biggest economy.
