Fonterra Australia has signed a long-term supply agreement with organic baby food producer Bellamy's Organic, a move that Paul Grave says is "great" for the dairy co-op.

The Fonterra Farm Source Regional Head Waikato spoke to The Country Early Edition's Rowena Duncum about the agreement and to also give an update on what's new with the co-op.

Grave says that Fonterra New Zealand has been working through the Australia team to have an alignment with Bellamy's, which is based in Tasmania, in an effort to "establish an organic milk pool there to take their product to the world."

The agreement will benefit Fonterra and its New Zealand shareholders says Grave.

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"When our Australian business does well our New Zealand shareholders do well and I think this will really compliment what we do with our organic products here in New Zealand."

Calving is just around the corner and Mycoplasma bovis will be on the minds of many farmers this year. Grave says there is information for concerned farmers on the DairyNZ website.

Mycoplasma bovis is also having an impact on Calf Days which are held at many rural schools.

The Ministry for Primary Industries has recommended that schools do not hold calf days as they could hinder the eradication process.

However, some schools may decide to go ahead with Calf Day and Grave recommends anyone considering this should check the DairyNZ website to make sure they follow guidelines to lessen the chances of contamination.

"Hopefully in the next few years we'll get this [M. bovis] nailed and this won't be such a big deal in the future, but for now while we're working through this eradication process, we want to take as many precautions as we can."

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