FONTERRA said it would expand its organic milk business to meet growing demand.
At meetings with farmers this week, Fonterra's global business manager for Organics, Craig Deadman, said the co-operative was committed to developing its organic milk supply.
"Following our review, we have refreshed our growth strategy to enable us to grow the business, profitably and sustainably," he said in a statement.
"This strategy reflects the volumes our customers have indicated they need to satisfy increasing demand for organic dairy," he said.
Fonterra is also increasing the total certified organic payment to $1.50 per kg milk solids from June this year, up 45 cents over the previous certified organic milk premium of $1.05 kg.
Deadman said more people were choosing organic dairy products and he expected the trend to continue, particularly in South-East Asia, China and in the United States.