It was looking for up to 100 A2 supply herds in the first season of a contract with the A2 Company but larger properties among the initial commitments can more readily move cows and specialise.
A2 Company is paying about 17c/kg premium, split into a retainer and utilisation components, Allen said.
A 5c/kg retainer applies to all milk production from the contracted herds, plus 80% of 15c in the first year for utilisation.
The retainer is recognition of the increased costs of production and management.
The 80% rate for the utilisation component reflects the anticipated build-up of markets for A2 ingredients, such as milk powder for infant formulas, Allen said.
Meanwhile, the domestic fresh milk market for Anchor A2 is being supplied by a Fonterra-owned farm to the Fonterra Brands Palmerston North site, with a back-up for winter supply from another nearby herd.
Anchor A2 varieties are now available in about 80% of all major supermarkets throughout the country and 10% of dairies and petrol stations in cities.
By way of comment on the A2 versus A1 science, Fonterra said consumer choice is the paramount principle.
“Smart companies change to meet consumer demands – 20 years ago milk came in two varieties, full fat and low fat.
“A2 has joined other options to meet consumers’ needs and tastes – lactose-free, organic and higher-protein.”
Allen said there is a pipeline of farmers moving towards A2 supply and he is confident Fonterra can meet the volumes required in its agreement with A2 Milk.
Other collection regions around processing plants will be opened in future.