Fonterra is in the final stages of buying land to develop a pilot dairy farm in Brazil, as part of its strategy to establish "best practice" dairy farms in the fast growing economies of Asia and Latin America.
The dairy co-operative is also developing a second dairy farm in China and conducting a feasibility study into a joint venture dairy farm in India.
Fonterra has signed a conditional sale and purchase agreement to buy an 850ha farm in the mid-west of Goias State in Brazil and is now conducting final due diligence.
The intention was to develop two milking platforms, with a total herd of 3300 cows, which would be producing milk by late 2014.
Fonterra's investment in the pasture-based dairy farm would be the first step in developing a source of high-quality fresh milk in Brazil to support Dairy Partners Americas (DPA) - Fonterra's South American joint venture with Nestle, Fonterra chief executive Andrew Ferrier said yesterday.
If the pilot proved successful, Fonterra intended to develop more farms in Brazil.
Demand for dairy around the world was growing by 2% a year, Mr Ferrier said.
"New Zealand milk will always be our top priority. While New Zealand milk production is forecast to grow at a long-term average of 2%-3%, we are looking offshore to supplement this and ensure we meet the growth potential for dairy globally," he said.
One of the fastest-growing United States milk co-operatives, California Dairies, says it is preparing to sell skim milk powder online through Fonterra's internet auctions, NZPA has reported.
California Dairies, which produces nearly a 10th of US milk, is planning to sell skim milk power through Fonterra's globaldairytrade website later this year, agrimoney.com reported.
"It is being talked about for no sooner than September," Eric Ebra, senior vice-president of administrative affairs for California Dairies, said.
The plans were revealed at an industry meeting.
Fonterra already has a link with the company - it uses California Dairies milk to make cheese and yoghurt ingredients in California.
