Tatua Dairy Co-operative has had a great year in 2018, with impressive results that Steve Allen puts down to "a lot of hard work".

The chairman of the highly-successful Waikato-based co-op told The Country's Jamie Mackay that the secret to Tatua's success was discipline and focus.

"We've really tried to stick to our knitting in terms of what we believe we do well," says Allen.

"Our guys at Tatua feel really grateful and fortunate to be in the position that we're in and I think ... it doesn't happen by accident. There's been a huge amount of work and discipline that's gone in to make the company strong."

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Other dairy co-operatives have not fared as well as Tatua in 2018, with Fonterra posting its first annual loss. Mackay asks if the dairy giant can follow in Tatua's footsteps to become "value rather than volume."

"I believe they can. I'm actually positive about Fonterra. I think we all acknowledge it's not easy to run something as large as Fonterra ... it's going to take time.

Next year will bring a lot of challenges for the dairy industry says Allen, with DIRA, the carbon zero act, and fresh water management to name a few.

Allen says the industry will need to get "back to basics," especially Fonterra.

"They've got a lot to navigate, but I believe they'll get there and do a great job."