Dairy Industry Restructuring (Raw Milk) Regulations 2012

Reprint as at 24 November 2016

Coat of Arms of New Zealand

Dairy Industry Restructuring (Raw Milk) Regulations 2012

(SR 2012/340)

Jerry Mateparae, Governor-General

Order in Council

At Wellington this 12th day of November 2012

Present:
His Excellency the Governor-General in Council

Note

Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this official reprint.

Note 4 at the end of this reprint provides a list of the amendments incorporated.

These regulations are administered by the Ministry for Primary Industries.

Pursuant to sections 115 and 116 of the Dairy Industry Restructuring Act 2001, His Excellency the Governor-General, acting on the advice and with the consent of the Executive Council and on the recommendation of the Minister for Primary Industries, makes the following regulations.

Contents

1Title
2Commencement
3Interpretation
3ATransitional, savings, and related provisions
4New co-op must supply raw milk to independent processors
5Maximum limit on supply of raw milk to all independent processors
6Maximum limit on supply of raw milk to each independent processor (other than Goodman Fielder New Zealand Limited)
7Maximum limit on supply of raw milk to Goodman Fielder New Zealand Limited
8Maximum limit on supply of organic milk to each independent processor
9Independent processors must provide advance estimates of demand for raw milk
10Daily estimates
11Daily estimates for winter milk for quantities exceeding 20 000 litres
12Whole season and monthly estimates
13New co-op must prepare preliminary forecasts of estimated total raw milk supply
14New co-op must prepare final forecasts of estimated total raw milk supply
15Chief executive to ration supply of raw milk if demand likely to exceed maximum limit on supply
16Return by new co-op relating to actual supply of raw milk by shareholding farmers
17Return by new co-op relating to actual supply of raw milk to independent processors
18Returns by independent processor with own supply
19New co-op must offer to supply raw milk to certain independent processors at fixed quarterly price
20New co-op must supply raw milk at default milk price unless parties agree price for supply
21Other terms of supply
22Excess supply of raw milk by new co-op
23Associated persons
24New co-op must publish certain information
25Statutory declarations
26Revocation
27Savings provision relating to estimates
Gazette Information
Reprint notes

Regulations

1 Title

These regulations are the Dairy Industry Restructuring (Raw Milk) Regulations 2012.

2 Commencement

These regulations come into force on 1 June 2013.

3 Interpretation

(1)

In these regulations, unless the context otherwise requires,—

additional cost of organic milk means the cost to new co-op of organic milk supplied to new co-op in a season per kilogram of milksolids minus the farm gate milk price in that season

additional cost of winter milk, in relation to an Island, means the cost to new co-op of winter milk supplied to new co-op in a season in that Island per kilogram of milksolids minus the farm gate milk price in that season

farm gate milk price means the total cost of milk divided by kilograms of milksolids

independent processor includes a body that is an interconnected body of the independent processor

Island means the North Island or South Island of New Zealand

kilograms of milksolids means the number of kilograms of milksolids supplied to new co-op in a season by shareholding farmers

organic milk means raw milk certified as organic milk by—

(a)

New Zealand Biological Producers & Consumers Society Incorporated:

(b)

the Bio Dynamic Farming & Gardening Association in New Zealand Incorporated:

(c)

AsureQuality Limited

own supply, in relation to an independent processor,—

(a)

means raw milk collected from dairy farmers by, or on behalf of, the independent processor; but

(b)

does not include milk supplied to an independent processor under section 108 of the Act

previous season, in relation to a current season, means the season immediately before the current season

raw milk

(a)

means untreated milk from a cow; and

(b)

includes organic milk; but

(c)

does not include—

(i)

milk or a component of milk from a cow produced under special conditions by, for example, the use of specialised herd selection, specialised farming practice, specialised feeding practice, or new technology:

(ii)

colostrum

total cost of milk means the total calculated by—

(a)

getting a sum by adding together all payments to which all the following apply:

(i)

the payment is made by new co-op and any body that is an interconnected body of new co-op; and

(ii)

the payment is made to a shareholding farmer; and

(iii)

the payment is for the raw milk that the farmer supplies to new co-op in a season; and

(b)

deducting from the sum—

(i)

the total organic milk premium for the season; and

(ii)

the total winter milk premium for the season

total organic milk premium means the total premium paid to shareholding farmers for the supply of organic milk to new co-op and any body that is an interconnected body of new co-op in a season

total winter milk premium means the total premium paid to shareholding farmers for the supply of winter milk to new co-op and any body that is an interconnected body of new co-op in a season

winter milk means raw milk supplied in June or July.

(2)

Terms used and not defined in these regulations but defined in the Act have, in these regulations, the same meanings as in the Act.

Compare: SR 2001/326 r 3

3A Transitional, savings, and related provisions

The transitional, savings, and related provisions set out in Schedule 1 have effect according to their terms.

Regulation 3A: inserted, on 24 November 2016, by regulation 4 of the Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2016 (LI 2016/248).

Part 1 Requirement to supply raw milk

4 New co-op must supply raw milk to independent processors

(1)

New co-op must supply raw milk to independent processors.

(2)

Subclause (1) is subject to the other provisions of this Part.

Compare: SR 2001/326 r 4

Subpart 1—Maximum limits on supply of raw milk

Overall limit

5 Maximum limit on supply of raw milk to all independent processors

(1)

The maximum quantity of raw milk that new co-op must supply to all independent processors is limited to 600 million litres per season.

(2)

For the purposes of section 115(2) of the Act, the Minister may from time to time, and must at intervals of not more than 3 consecutive seasons, review the limit specified in subclause (1).

Compare: SR 2001/326 r 11(2)

Regulation 5(1): amended, on 24 November 2016, by regulation 5 of the Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2016 (LI 2016/248).

Individual limits

6 Maximum limit on supply of raw milk to each independent processor (other than Goodman Fielder New Zealand Limited)

(1)

The maximum quantity of raw milk that new co-op must supply to each independent processor (other than Goodman Fielder New Zealand Limited) per season—

(a)

is limited to 50 million litres; and

(b)

is subject to the maximum monthly limits specified in subclause (2); and

(c)

for a month specified in subclause (2) other than October, is limited to 110% of the amount taken by the independent processor in October.

(2)

For the purposes of subclause (1)(b), the maximum monthly limits are—

(a)

for August, 3 million litres:

(b)

for September, 6 million litres:

(c)

for October, 7 million litres:

(d)

for November, 7 million litres:

(e)

for December, 6 million litres:

(f)

for January, 6 million litres:

(g)

for February, 5 million litres:

(h)

for March, 4 million litres:

(i)

for April, 4 million litres:

(j)

for May, 2 million litres.

(3)

Despite subclauses (1) and (2), new co-op is not required to supply raw milk to an independent processor (other than Goodman Fielder New Zealand Limited) in a season beginning on and after 1 June 2016 if the independent processor’s own supply of raw milk in each of the 3 consecutive previous seasons was 30 million litres or more as specified in returns provided to new co-op under regulation 18(2).

(4)

Subclauses (1) and (2) are subject to regulation 15(2).

7 Maximum limit on supply of raw milk to Goodman Fielder New Zealand Limited

(1)

The maximum quantity of raw milk that new co-op must supply to Goodman Fielder New Zealand Limited (other than new co-op) per season—

(a)

is limited to 250 million litres; and

(b)

for August, September, November, December, January, February, March, April, or May, is limited to 110% of the amount taken by Goodman Fielder New Zealand Limited in October.

(2)

Subclause (1) is subject to regulation 15(2).

Compare: SR 2001/326 r 11(4)

8 Maximum limit on supply of organic milk to each independent processor

The maximum quantity of organic milk that new co-op must supply to each independent processor per season is limited to the quantity of organic milk supplied to that independent processor by The New Zealand Co-operative Dairy Company Limited and Kiwi Co-operative Dairies Limited in the 2000/01 season.

Compare: SR 2001/326 r 11(5)

Subpart 2—Managing demand for raw milk

Demand estimates

9 Independent processors must provide advance estimates of demand for raw milk

An independent processor must, in accordance with regulations 10, 11, and 12, provide new co-op with advance estimates of the quantity of raw milk required by the independent processor.

Compare: SR 2001/326 r 5

10 Daily estimates

(1)

This regulation applies to a quantity of raw milk to be supplied by new co-op to an independent processor in 1 day, excluding winter milk to which regulation 11 applies.

(2)

For a quantity of raw milk to which subclause (1) applies, the independent processor must provide new co-op with an estimate for supply—

(a)

at least 3 months before the date on which the milk is to be supplied; and

(b)

at least 1 week before the date on which the milk is to be supplied.

(3)

A quantity estimated under subclause (2)(b) must be within the range from 40% more than a quantity estimated under subclause (2)(a) to 40% less than that quantity.

Compare: SR 2001/326 r 6

11 Daily estimates for winter milk for quantities exceeding 20 000 litres

(1)

This regulation applies to a quantity of winter milk that exceeds 20 000 litres to be supplied by new co-op to an independent processor in 1 day.

(2)

For a quantity of winter milk to which subclause (1) applies, the independent processor must provide new co-op with an estimate for supply—

(a)

at least 18 months before the date on which the winter milk is to be supplied; and

(b)

at least 1 week before the date on which the winter milk is to be supplied.

(3)

A quantity estimated under subclause (2)(b) must be within the range from 40% more than the quantity estimated under subclause (2)(a) to 40% less than that quantity.

Compare: SR 2001/326 r 7

12 Whole season and monthly estimates

(1)

This regulation applies to the quantity of raw milk to be supplied by new co-op to an independent processor in a current season, including winter milk to which regulation 11 applies.

(2)

The independent processor must, no later than the 5th working day in June of the current season, provide new co-op with an estimate of the total quantity of raw milk required by the independent processor—

(a)

for the whole of the current season; and

(b)

for each of the months of the current season specified in regulation 6(2)(a) to (j) or 7(1)(b) (as the case may be).

(3)

To avoid doubt, the estimates provided under subclause (2) must not exceed the maximum limits on supply specified in regulations 6, 7, and 8.

Supply forecasts

13 New co-op must prepare preliminary forecasts of estimated total raw milk supply

(1)

New co-op must, in each season, prepare a preliminary forecast of the estimated total raw milk requirements of—

(a)

each independent processor for the season; and

(b)

all independent processors for the season.

(2)

The preliminary forecast relating to each independent processor under subclause (1)(a) must be based on—

(a)

the total quantity of winter milk actually supplied to the independent processor in the season; and

(b)

the estimated total quantity of raw milk to be supplied to the independent processor in August, September, and October of the season based on an aggregate of the daily estimates for those 3 months provided by the independent processor under regulation 10(2)(a); and

(c)

the estimated total quantity of raw milk to be supplied to the independent processor in the balance of the season based on—

(i)

the estimate for the whole of the season provided by the independent processor under regulation 12(2)(a); and

(ii)

the estimate for each month of the balance of the season provided by the independent processor under regulation 12(2)(b).

(3)

The preliminary forecast relating to all independent processors under subclause (1)(b) must be based on the aggregate of each independent processor’s raw milk requirements under subclause (2).

(4)

New co-op must, by the 10th working day in August of the season, provide the preliminary forecasts to the chief executive.

Compare: SR 2001/326 r 5A

14 New co-op must prepare final forecasts of estimated total raw milk supply

(1)

New co-op must, in each season, prepare final forecasts of the estimated total raw milk requirements of—

(a)

each independent processor for the season; and

(b)

all independent processors for the season.

(2)

The final forecast relating to each independent processor under subclause (1)(a) must be based on—

(a)

the total quantity of winter milk actually supplied to the independent processor in the season; and

(b)

the total quantity of raw milk actually supplied to the independent processor in August, September, and October in the season; and

(c)

the estimated total quantity of raw milk to be supplied to the independent processor in November, December, and January of the season based on an aggregate of the daily estimates for those 3 months provided by the independent processor under regulation 10(2)(a); and

(d)

the estimated total quantity of raw milk to be supplied to the independent processor in the balance of the season based on—

(i)

the estimate for the whole of the season provided by the independent processor under regulation 12(2)(a); and

(ii)

the estimate for each month of the balance of the season provided by the independent processor under regulation 12(2)(b).

(3)

The final forecast relating to all independent processors under subclause (1)(b) must be based on the aggregate of each independent processor’s raw milk requirements for the season under subclause (2).

(4)

New co-op must, by the 10th working day in November of the season, provide the final forecasts to the chief executive for verification.

Compare: SR 2001/326 r 5B

Rationing rule

15 Chief executive to ration supply of raw milk if demand likely to exceed maximum limit on supply

(1)

As soon as practicable after receiving the final forecasts from new co-op under regulation 14, the chief executive must verify the information in the final forecasts.

(2)

If the final forecasts (as verified) indicate that the estimated total raw milk requirements of all independent processors for that season are likely to exceed the maximum limit on supply specified in regulation 5(1), the chief executive must—

(a)

calculate, on a pro rata basis, the decrease in the total quantity of raw milk that each independent processor may receive for the balance of the season in order to bring the estimated total demand for raw milk in the season within the maximum limit on supply; and

(b)

publish a notice in the Gazette stating that the total quantity of raw milk that independent processors may receive from new co-op for the balance of the season is to be adjusted to bring the estimated total raw milk requirements of all independent processors in the season within that limit; and

(c)

give written notice to new co-op and each independent processor of the decrease in the total quantity of raw milk that new co-op may supply to the independent processor for the balance of the season.

(3)

New co-op must supply raw milk to an independent processor for the balance of the season in accordance with the notice given by the chief executive under subclause (2).

Compare: SR 2001/326 r 5C

Returns

16 Return by new co-op relating to actual supply of raw milk by shareholding farmers

New co-op must, no later than the first working day in July of the current season, provide a return to the chief executive stating the total quantity of raw milk actually supplied to new co-op by shareholding farmers in the previous season.

17 Return by new co-op relating to actual supply of raw milk to independent processors

New co-op must, no later than the first working day in July of the current season, provide a return to the chief executive stating the total quantity of raw milk it actually supplied—

(a)

to each independent processor in each month of the previous season; and

(b)

to all independent processors for the whole of the previous season.

18 Returns by independent processor with own supply

(1)

This regulation applies to an independent processor (other than Goodman Fielder New Zealand Limited)—

(a)

that requires new co-op to supply it with raw milk in a current season; and

(b)

that sourced a quantity of raw milk from its own supply in the previous season.

(2)

The independent processor must, no later than the 5th working day in June of the current season, provide a return to new co-op specifying whether the quantity of raw milk sourced by the independent processor from its own supply in the previous season was—

(a)

less than 30 million litres; or

(b)

30 million litres or more.

Subpart 3—Terms of supply and other matters

Price of raw milk

19 New co-op must offer to supply raw milk to certain independent processors at fixed quarterly price

(1)

This regulation applies to an independent processor (other than Goodman Fielder New Zealand Limited) that requires new co-op to supply it with raw milk in a current season and that—

(a)

did not source any raw milk in the previous season from its own supply; or

(b)

sourced a quantity of raw milk in the previous season from its own supply that was less than 30 million litres (as specified in a return provided to new co-op under regulation 18(2)).

(2)

New co-op must offer to supply the raw milk required by the independent processor for the whole of the current season at the most recent forecast of the farm gate milk price for that season (fixed quarterly price).

(3)

If the independent processor wishes to be supplied with the raw milk it requires for the whole of the current season at the fixed quarterly price,—

(a)

the independent processor must notify new co-op, no later than the 5th working day in June of the current season, that the independent processor accepts the offer; and

(b)

new co-op must supply the raw milk required by the independent processor for the whole of the current season at the fixed quarterly price.

(4)

In subclause (2), most recent forecast of the farm gate milk price means the forecast published under regulation 24(1)(c) plus—

(a)

the reasonable cost of transporting the raw milk to the independent processor; and

(b)

for winter milk, the forecast additional cost of winter milk published under regulation 24(1)(e); and

(c)

for organic milk, the forecast additional cost of organic milk published under regulation 24(1)(f).

20 New co-op must supply raw milk at default milk price unless parties agree price for supply

(1)

This regulation applies to the following independent processors that require new co-op to supply them with raw milk in a current season:

(a)

an independent processor (other than Goodman Fielder New Zealand Limited) whose own supply of raw milk in the previous season—

(i)

was 30 million litres or more as specified in a return provided to new co-op under regulation 18(2); or

(ii)

was less than 30 million litres but the independent processor does not require new co-op to supply the raw milk required by the independent processor for that season at the fixed quarterly price referred to in regulation 19(2):

(b)

Goodman Fielder New Zealand Limited.

(2)

New co-op and the independent processor may agree a price for the supply of the raw milk.

(3)

However, if new co-op and the independent processor cannot agree a price under subclause (2), the independent processor may require new co-op to supply the raw milk at the default milk price.

(4)

In subclause (3), default milk price means the farm gate milk price for that season plus—

(a)

the reasonable cost of transporting the raw milk to the independent processor; and

(b)

for winter milk, the additional cost of winter milk in the Island in which the milk is supplied; and

(c)

for organic milk, the reasonable additional costs to new co-op of procuring and supplying the organic milk.

Compare: SR 2001/326 r 8(1)–(3), (5)

Other terms of supply

21 Other terms of supply

(1)

New co-op may require an independent processor to contract to buy a quantity of raw milk not exceeding 80% of the quantity of raw milk estimated by the independent processor under regulation 10(2)(b) or 11(2)(b).

(2)

An independent processor may require new co-op to contract to sell a quantity of raw milk not exceeding 120% of the quantity of raw milk estimated by the independent processor under regulation 10(2)(b) or 11(2)(b).

(3)

New co-op or an independent processor may require that a contract for new co-op to supply raw milk to an independent processor includes terms that are reasonable having regard to industry practice before the commencement of these regulations.

(4)

New co-op may require an independent processor to contract to notify new co-op of its actual requirement for raw milk by noon on the day before the raw milk is to be supplied.

(5)

This regulation does not allow new co-op to require that a contract to supply raw milk to an independent processor includes a take or pay requirement.

Compare: SR 2001/326 r 10

Excess supply

22 Excess supply of raw milk by new co-op

(1)

This Part does not apply to the supply of raw milk by new co-op that exceeds the maximum limits on supply of raw milk to independent processors specified in regulations 5 to 8.

(2)

The supply of raw milk by new co-op in excess of a limit specified in regulation 6 or 7 is not to be counted in calculating whether the limit specified in regulation 5(1) is met.

Compare: SR 2001/326 r 13

23 Associated persons

New co-op may perform its obligations under this Part through an associated person.

Compare: SR 2001/326 r 15

Part 2 Miscellaneous provisions

24 New co-op must publish certain information

(1)

New co-op must publish forecasts, in each season, of—

(a)

the total quantity of raw milk to be supplied to new co-op by shareholding farmers in the season; and

(b)

the total cost of milk for the season; and

(c)

the farm gate milk price for the season; and

(d)

the kilograms of milksolids supplied in the season; and

(e)

the additional cost of winter milk for each Island for the season; and

(f)

the additional cost of organic milk for the season.

(2)

New co-op must publish the total quantity of raw milk that new co-op has contracted to supply to independent processors under Part 1

(a)

for the season in which the information is published; and

(b)

for the following 5 seasons.

(3)

New co-op must publish the forecasts specified in subclause (1) and the information specified in subclause (2) as soon as practicable after each of the following dates in each season:

(a)

1 June:

(b)

1 September:

(c)

15 December:

(d)

1 March.

(4)

New co-op must publish, for each season,—

(a)

the total quantity of raw milk actually supplied to new co-op by shareholding farmers for the season; and

(b)

the total cost of milk for the season; and

(c)

the farm gate milk price in the season; and

(d)

the kilograms of milksolids supplied in the season; and

(e)

the additional cost of winter milk for each Island for the season; and

(f)

the additional cost of organic milk in the season; and

(g)

the total winter milk premium for the season.

(5)

New co-op must publish the information specified in subclause (4) as soon as practicable after the end of the season to which the information relates.

(6)

New co-op must continuously publish the forecasts specified in subclause (1) and the information specified in subclauses (2) and (4) on new co-op’s Internet site in an electronic form that is publicly accessible.

Compare: SR 2001/326 r 16

25 Statutory declarations

(1)

Forecasts and information supplied to the Commission under section 117(1) or (2) of the Act must be verified by statutory declaration in the form specified in Schedule 2.

(2)

The statutory declaration referred to in subclause (1) must be made by a director or officer of new co-op.

Compare: SR 2001/326 r 17

Regulation 25(1): amended, on 24 November 2016, by regulation 6 of the Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2016 (LI 2016/248).

26 Revocation
27 Savings provision relating to estimates

Despite regulation 26, an estimate provided by an independent processor to new co-op under regulation 6(2) or 7(2) of the Dairy Industry Restructuring (Raw Milk) Regulations 2001 remains in force and must be treated as if it were an estimate provided under regulation 10(2) or 11(2) of these regulations.

Schedule 1 Transitional, savings, and related provisions

r 3A

Schedule 1: inserted, on 24 November 2016, by regulation 7 of the Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2016 (LI 2016/248).

Part 1 Provisions relating to Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2016

1 Reduction applies from current season onwards

The maximum quantity of raw milk specified in regulation 5(1) of these regulations, as reduced by the Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2016, applies to the season starting on 1 June 2016 and ending on 31 May 2017 and to the seasons that follow it.

Schedule 2 Form

r 25(1)

Schedule 2 schedule number: inserted, on 24 November 2016, by regulation 8 of the Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2016 (LI 2016/248).

Form Form of statutory declaration

I, [full name, address], being a director/an officer* of [name of company], solemnly and sincerely declare that, having made all reasonable enquiry, to the best of my knowledge—

Select the paragraph that applies.

(a)

the information attached to this declaration is a true copy of information that—

(i)

complies with the requirements of the Dairy Industry Restructuring (Raw Milk) Regulations 2012; and

(ii)

has been made available to the public by [name of company] in accordance with those regulations:

or

(b)

the statement(s)/report(s)/information [specify]* attached to this declaration is/are* the statement(s)/report(s)/information [specify]* requested to be supplied by the Commission under section 117(2) of the Dairy Industry Restructuring Act 2001.

*Select one.

I make this solemn declaration conscientiously believing the same to be true and by virtue of the Oaths and Declarations Act 1957.

Signed:

(Director/officer*)

*Select one.

Declared at [place, date]

Before me: [name, signature]

(Justice of the Peace/Solicitor/other person authorised to take a statutory declaration*)

*Select one.

Michael Webster,
for Clerk of the Executive Council.

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 15 November 2012.

Reprints notes
1 General

This is a reprint of the Dairy Industry Restructuring (Raw Milk) Regulations 2012 that incorporates all the amendments to those regulations as at the date of the last amendment to them.

2 Legal status

Reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by any amendments to that enactment. Section 18 of the Legislation Act 2012 provides that this reprint, published in electronic form, has the status of an official version under section 17 of that Act. A printed version of the reprint produced directly from this official electronic version also has official status.

3 Editorial and format changes

Editorial and format changes to reprints are made using the powers under sections 24 to 26 of the Legislation Act 2012. See also http://www.pco.parliament.govt.nz/editorial-conventions/.

4 Amendments incorporated in this reprint

Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2016 (LI 2016/248)