The Same Cows, 56% More Money: What New Zealand's Organic Milk Price Teaches Every Farmer About Value-Added Dairy and Premium Income
In 2007, the dairy industry valued Phil and Steve Hook's milk at about 25p a litre. So the Sussex father and son filled twelve bottles in their farmhouse kitchen and delivered them in Phil's Volvo.
Today their website sells a litre of their pasteurised milk for £3.70.
That is the real lesson behind New Zealand's milk news. Fonterra forecasts organic milk at about 56% more than standard milk this season. Buyers pay far more for milk that is different. Organic is one way to be different, but it takes two to three years. Value-added dairy (an experience, a product or your own brand) is the faster way to set your own price.
The Short Answer: On 30 October 2026, Fonterra lifted its 2026/27 forecast to NZ$9.75 per kilogram of milk solids (kgMS) for standard milk and NZ$15.25/kgMS for organic, a gap of about 56%. In Britain, Arla's organic price (58.25p a litre) sits about 44% above its conventional price (40.41p). The lesson for every farmer: when you sell an anonymous commodity, the buyer sets the price. Farms that sell milk through a vending hut, a scoop of ice cream, a paid tour, a cheese class or their own bottle set their own price, and they can start in months, not years. |
The News: Fonterra Just Put a 56% Gap Between Two Kinds of Milk
Fonterra is New Zealand's giant farmer-owned dairy co-operative. On 30 October 2026 it raised its forecast for the 2026/27 season.
Here is what changed:
Standard milk: midpoint raised from NZ$9.50 to NZ$9.75 per kgMS, with the range narrowed to NZ$9.00 to NZ$10.50.
Organic milk: midpoint raised from NZ$14.30 to NZ$15.25 per kgMS, with the range moved to NZ$14.50 to NZ$16.00.
That organic midpoint is NZ$5.50 per kgMS more than the standard one, or roughly 56% more for every kilo of milk solids.
Why the rise? Fonterra's chief executive, Richard Allen, pointed to global auction prices. He said Fonterra's whole milk powder and skim milk powder prices on Global Dairy Trade rose about 5% and 7% over the last two auctions. He put that down to "sustained demand from across Southeast Asia, Middle East, Africa and China."
Fonterra is also growing organic, with South Island organic processing at its Stirling site expected from the 2028/29 season. Remember these are forecasts. The season ends on 31 May 2027, and forecasts can move both ways.
The standard forecast went down and came back to where it started. The organic forecast only went up. That is what being different looks like on a graph.
What Is a kgMS? (A Plain-English Guide for US, UK and Canadian Farmers)
New Zealand farmers are not paid by the litre or by the hundredweight. They are paid per kilogram of milk solids (kgMS): the fat and protein in the milk. Water earns nothing.
Fonterra's own public forecast lets us convert. As at 1 September 2026, it expected about 16.4 billion litres from its farmers this season, carrying about 1,543 million kgMS. That is roughly 0.094 kgMS in every litre.
Fonterra 2026/27 forecast | Per kgMS (forecast midpoint) | Roughly per litre |
Standard milk | NZ$9.75 | about NZ$0.92 |
Organic milk | NZ$15.25 | about NZ$1.43 |
The organic gap | NZ$5.50 | about NZ$0.52 |
These per-litre figures are approximate, because every farm's milk has different fat and protein. But the picture is clear: the organic farmer is forecast to earn about 52 New Zealand cents more on every litre.
Hold on to that number. Later you will meet a 35-cow New Zealand farm that sells some of its milk at the gate for NZ$3.50 a litre.
Meanwhile, in Britain: The Commodity Squeeze
Farmers Weekly reported on 4 November 2026 that Arla's conventional price for November fell to 40.41p a litre after a 0.45p cut. That small cut came straight after four monthly rises. Arla's organic price held at 58.25p. That is about 44% higher for a litre produced under organic rules.
Other buyers split:
Freshways cut 7p a litre from December, to a 29.4p base. NFU Dairy Board chair Ian Harvey called it "hugely disappointing".
Muller held its Advantage price at 37.5p for December.
First Milk held at 39p, and Barber's held at 40.11p.
Defra's official figures show the UK average farmgate price was 38.45p a litre in September 2026. That was up 1.8p on August, but about 16% lower than a year earlier.
And it may not be over. Dairy analyst Chris Walkland told Farmers Weekly that more cuts in January cannot be ruled out "if commodities don't pick up soon."
American farmers know the feeling. USDA put the US all-milk price at $19.50 per hundredweight in September 2026, down from $19.80 in August. Using USDA's standard of 8.6 pounds per gallon, that is roughly $1.68 a gallon, or about 44 US cents a litre.
We covered the European squeeze in Europe's dairy farmers just lost a fifth of their milk cheque and the cost side in diesel now costs dairy farms an extra $10.91 per cow. This article is about who sets the price in the first place.
Price-Taker vs Price-Maker: The Real Lesson Behind the 56%
When your milk goes into a tanker, it becomes the same as everyone else's milk. You do not set the price. You take it. You are a price-taker.
A price-maker sells something the buyer cannot get anywhere else, so the seller names the number. That is the whole game.
Organic is one way to stop being a commodity. Buyers pay more because organic milk is certified as different. But look at the waiting room:
In the UK, the Soil Association says the conversion period for land is generally two years. Dairy cows must eat only organic feed for at least six months before their milk can be sold as organic, and land and herd can be converted together over the two years.
In the US, land must have had no prohibited materials applied for 36 months before harvest. A herd takes 12 months to transition, and under USDA's 2022 Origin of Livestock rule, a dairy gets that conventional-to-organic herd transition only once.
That is two to three years of organic costs before you see the organic price. And you still need a buyer who takes organic milk in your area.
Bryce Cunningham's family farm, Mossgiel in Ayrshire, Scotland, became insolvent after a period of low milk prices. He concluded that milk did not have to be treated only as a commodity. Today Mossgiel Organic Dairy is certified organic and sells its milk under its own name, in packaging designed for reuse.
Notice what he really did. Organic was only half of it. The other half was his own brand.
Reality Check: Organic is not free money. During conversion you pay certification fees and buy organic feed while still being paid the conventional price. Talk to a certifier and your milk buyer before you start. Ask the buyer one question first: "Will you take my organic milk in two years, and at what premium?" |
The faster route is to make your milk different by what you add to it: a place, a person, a story, a product. You can start that in a single season. Some of the best examples below are organic farms that also sell the experience.
What the Same Litre Earns: The Value-Added Dairy Ladder
Here is what real buyers and real farms say a litre of milk earns. Dates matter, so they are shown.
How the litre is sold | Example | Price per litre | When |
NZ standard milk (forecast) | Fonterra midpoint | about NZ$0.92 | 2026/27 forecast |
NZ organic milk (forecast) | Fonterra midpoint | about NZ$1.43 | 2026/27 forecast |
NZ farm-gate vending | The Good Cow, North Canterbury | NZ$3.50 | Sept 2026 |
UK lowest base price | Freshways | 29.4p | From Dec 2026 |
UK average farmgate | Defra | 38.45p | Sept 2026 |
UK conventional | Arla | 40.41p | Nov 2026 |
UK organic | Arla | 58.25p | Nov 2026 |
UK farm vending machine | Hooks Farm Dairy, Derbyshire | £1.20 | 2022 |
UK own-brand milk, delivered or shop | Hook & Son, Sussex | £3.70 | Nov 2026 |
US all-milk price | USDA | about US$0.44 | Sept 2026 |
US own-bottled milk, retail | Kilgus Farmstead, Illinois | about US$1.56 ($5.89 a gallon) | Nov 2026 listing |
First, these are sales prices, not profit. A vending hut needs a pasteuriser, a machine, bottles and your time every day. Delivered milk carries the cost of vans and staff.
Second, you do not have to sell every litre yourself. You are trying to sell some litres at a price you set, and the rest can still go in the tanker.
Five Value-Added Dairy Plays You Can Start Without Waiting Three Years
The farms below are new to this site. Each charges more than the tanker pays, and none needed to wait for organic certification to start. (For a British vending and gelato example, see Wallhope Farm in our British Farming Awards 2026 lessons.)
Play No. 1: The Farm-Gate Milk Vending Hut
You pasteurise, chill and sell through a self-serve machine at your gate. Customers bring or buy bottles.
Hooks Farm Dairy, Borrowash, Derbyshire. The Smith family put in a vending machine in 2018 on a 51-hectare farm with about 50 cows. Farmers Weekly reported in 2022 that they charged £1.20 a litre, £2 for 2 litres and 80p for 500ml, with 18 flavoured syrups at 50p a shot.
Sales grew from about 150 litres a day to about 300. "Trade is now at about 300 litres a day and more at weekends," Dan Smith said. By then the average customer spend was about £7, nearly double the earlier figure. Their pasteuriser had cost £12,000 several years earlier.
The Good Cow, near Sefton, North Canterbury, New Zealand. Tammy Acton-Adams farms 35 cows, mainly pedigree Friesians. Dairy News reported in September 2026 that she sells unhomogenised whole milk through a farm-gate vending machine at NZ$3.50 a litre, taking cards, cash and prepaid tokens.
The clever part: surplus milk still goes to Fonterra. She sells the litres people want at her own price and sends the rest at the co-op price.
NZ$3.50 is nearly four times the forecast of about NZ$0.92 for standard milk. Even organic, at about NZ$1.43, is less than half.
What does it cost? Farmers Weekly reported in 2022 that a full UK vending set-up averaged about £30,000 including a pasteuriser, with small pasteurisers costing £6,000 to £15,000 for 100 to 500 litres a day. The Milk Station Company, which supplies most UK machines, said customers often pay the machines back within a year. Treat that as a supplier's view, and run your own numbers.
Field-Tested Play: Before buying a machine, count your traffic. Park at your gate for two busy afternoons and count the cars that pass. Then ask ten local families what they pay for milk now and whether they would drive to you. Then think beyond plain milk. In 2022, Hooks Farm Dairy offered 18 milkshake syrups at 50p a shot, and every add-on lifts what each customer spends. |
Reality Check: A vending hut is a seven-day job. Someone fills it, cleans it and empties it every single day, and Farmers Weekly reported this can take up to an hour a day. If you sell raw milk, the rules are much stricter than for pasteurised milk, and in some places it is banned. See the paperwork section below. |
Play No. 2: Turn Milk Into Ice Cream
Lochmeyler Farm, St David's, Pembrokeshire. Matthew and Margo Evans run 350 dairy cattle on 200 hectares. When Farmers Weekly filmed them in 2018, their milk went to Glanbia on contract at 30p a litre.
Their ice cream was a different story. Farmers Weekly reported that the ice cream lifted the value of each litre of their milk from that 30p to about 50p, almost double. The farm could also make about £1,000 worth of ice cream from 100 litres in a day. That is sales, not profit: ingredients, staff and equipment all come out of it.
Matthew Evans said the main benefit is that the family gets to control the price of what it produces.
The Ice Cream Farm, Tattenhall, Cheshire. This one started with a milk problem. When milk quotas arrived in the UK in the 1980s, dairy farmers had to buy more quota or find another use for their extra milk. Director Jonathan Fell's father chose to make farm ice cream.
"We had vacant buildings available, so we expanded year on year," Fell told Blooloop in 2015. He said the farm had 525,000 visitors through the gates the previous year, and Blooloop reported that leisure income rose 330% between 2008 and 2013.
You do not need to start at that size. As a rough guide reported by Farmers Weekly in 2012, about 10 litres of milk makes around 15 litres of ice cream.
Field-Tested Play: Test before you build. Ask a local ice cream maker whether they will make a small batch from your milk under your farm's name, then sell it from a freezer at your gate or market stall. If it sells all summer, you have proof before you spend on your own parlour. Price it with our agritourism pricing guide. |
Reality Check: Ice cream is weather-driven and seasonal. A wet August can hit sales hard. Equipment, cold storage, food hygiene training and staff add up fast, so build your budget for a bad summer, not a heatwave. |
Play No. 3: Sell the Visit: Paid Dairy Farm Tours and Calf Time
People who have never seen a cow milked will pay to see it. The ticket is the premium.
Cream o' Galloway and The Ethical Dairy, Dumfries and Galloway, Scotland. This organic dairy keeps calves with their mothers and describes itself as the largest farm in the UK using this "cow-with-calf" system. Farmer David Finlay leads a two-hour walking tour where visitors meet the cows and calves and ask questions. The price is £25 per person, half price from November to March, with a minimum of four bookings.
Look at the stack: organic milk, its own ice cream brand, its own cheese brand, and a paid tour that tells the story behind all three.
Billings Farm & Museum, Woodstock, Vermont. This is a working Vermont dairy farm run by a non-profit foundation as a museum. Its website lists adult admission at $23 and children aged 3 to 15 at $14 (checked November 2026). It is bigger than most family farms, but it proves people pay to walk through a dairy.
Lakeside Farmstead, Sturgeon County, Alberta. This family dairy north of Edmonton took a different approach on Alberta Open Farm Days in August 2026. Its guided calf barn tours were free. Visitors could then step into the cheese-making facility and the farm store, where they could taste and buy cheese made from the farm's own milk.
That is a free tour used as a front door to paid products.
Field-Tested Play: Run one test tour before you build anything. Invite 15 people for a Saturday morning, show the milking, let children bottle-feed a calf under supervision, and finish with a taste of your milk. Charge a fair ticket, then ask every guest what they would pay next time. Our farm tour business guide shows how to design and price it, and our 60-minute test plan keeps the first one small. |
Reality Check: Calves and children are a health risk if you get it wrong. Handwashing stations, clear rules and supervision are not optional. Read our guide to petting zoo handwashing and animal contact before your first visitor touches an animal. |
Play No. 4: Cheese, Butter and "Make It Yourself" Days
Thorncrest Farm, Goshen, Connecticut. Kimberly and Clint Thorn keep a small herd of Hereford and Jersey cows and make Milk House Chocolates beside the dairy barn. Their Farmstead Fresh Class costs $195 for three to four hours. Guests milk a cow, then make fresh mozzarella and ricotta in the creamery and take the cheese and recipes home. Classes are small, usually four or five people, from April to October.
Do the sum. Five seats at $195 is $975 from one class, and only a small part of that is the value of the milk used.
Fromagerie La Station, Compton, Quebec. Carole Routhier began making cheese in her kitchen in 1997. The cheese plant opened in 2004, and her three sons joined in 2008. The farm, cheese and maple syrup are certified organic, and its farmhouse cheeses are made from organic raw milk.
It also sells the visit: a 1.5-hour guided tour and tasting for up to 25 people per guide, a shorter tasting, a self-guided visit, trails, a shop and a viewing window into the cheese room.
Like Cream o' Galloway, La Station did not stop at organic. It turned organic milk into a product, then the product into a place to visit.
Field-Tested Play: Start with butter, not cheese. A butter-making or "milk to mozzarella" morning needs simple kit, a clean kitchen space and a few litres of milk. Sell ten seats, keep the group small and end with a tasting. If you love teaching, our guide to farm cooking classes shows how other farms price seats. |
Play No. 5: Your Own Bottle, Your Own Name, Your Own List
The biggest premium of all is a name customers ask for.
Kilgus Farmstead, Fairbury, Illinois. The Kilgus family began bottling their own Jersey milk on the farm in June 2009, partly to make room for family members coming home. AgriNews reported in 2021 that weekly sales had grown from about 700 gallons to 6,000 to 6,500 gallons, sold in more than 150 locations, with about half going to Chicago.
AgriNews reported that visitors to the farm's country store can watch the bottling through a large window. A recent listing on the Market Wagon online farmers' market priced a gallon of their whole milk at $5.89. That is about $1.56 a litre at retail, against about 44 cents for the national all-milk price. The farm does not keep all of that, but it keeps far more than the tanker pays.
Hartzler Family Dairy, Wooster, Ohio. The Hartzlers built a small processing plant in the early 1990s and opened a shop in front of it in 1996, selling milk "as nature intended it to be". Cleveland Magazine reported in April 2026 that the business aims to reach about $8 million in revenue within two years. "We've really done zero marketing," said CEO Jace Hartzler. The product and the story did the work.
Hook & Son, Hailsham, East Sussex. After those twelve kitchen bottles in 2007, the Hooks added raw cream and butter, milk rounds, London farmers' markets, courier delivery and, in 2023, a flagship dairy shop at Borough Market. Your story needs a name, a label and a list of people who want to hear from you. Our guide to farm storytelling and premium prices shows how to write it.
Field-Tested Play: Start your list today, before you sell anything. Every visitor, market customer and neighbour who buys from you goes into a phone or email list with their permission. When you have milk, cream or a tour date, you tell them first. A list is a customer you do not have to find twice. |
Which Value-Added Dairy Play Fits Your Farm?
Play | Start-up spend | Daily work | Best if your farm has |
No. 1: Milk vending | Medium (UK average about £30,000 in 2022) | Every day | A busy road and space at the gate |
No. 2: Ice cream | Medium to high | Seasonal peaks | Tourists nearby and summer traffic |
No. 3: Paid tours and calf time | Low | Booked days only | A safe viewing route and a farmer who loves to talk |
No. 4: Classes | Low to medium | Booked days only | A clean kitchen or creamery space |
No. 5: Own brand and list | Low to start, high to scale | Ongoing | Patience and a story worth telling |
Tours and classes are the cheapest test. Your own brand takes the longest and lasts the longest.
The Paperwork: Questions to Ask Before You Sell a Single Litre
This is not legal advice. Rules differ by country, state, province and council, and they change, so take these questions to the right people.
Raw milk or pasteurised? The rules are very different, so ask first.
England, Wales and Northern Ireland: the UK government says raw cow's drinking milk can only be sold direct to the consumer by registered farms (at the farm gate, including vending machines and direct online sales), by farmers at registered farmers' markets, or from a milk round. It is illegal in any other setting.
Scotland: sales of raw drinking milk and raw cream are completely banned.
United States: federal FDA rules require milk sold across state lines to be pasteurised, and each state sets its own rules for raw milk sales within its borders. Some allow retail sales, while others allow only direct farm sales or herd-share agreements, so check your own state.
Canada: Health Canada says the sale of raw milk has been strictly prohibited under the Food and Drug Regulations since 1991. Because Canadian dairy runs on supply management, also ask your provincial milk marketing board how processing your own milk fits with your quota.
New Zealand: ask the Ministry for Primary Industries what registration and testing a farm-gate seller needs.
Pasteurised milk through a vending machine, shop or delivery is usually the safer and simpler route. Ask your local food authority or health department what it takes.
Questions for your local authority, environmental health or health department:
Do I need to register or license as a food business or a dairy processor?
What testing, labelling and hygiene training will I need?
Does a vending hut, parlour or shop need planning permission, signs or road access approval?
Our guide to selling food on your farm and the permits each option needs goes deeper.
Questions for your insurer:
Does my farm policy cover selling food to the public, and product liability if someone falls ill?
Does it cover visitors on tours, near animals or in a kitchen class?
Do I need separate cover for a vending machine or an ice cream parlour?
What written safety plan or signs do you need to see?
NFU Mutual's farm specialist told Farmers Weekly that "public and product liability insurance is a top requirement" when customers use a farm vending machine. For a wider checklist, read agritourism insurance: what coverage you need.
Grants worth looking into (check what is open before you plan around them):
US: USDA Value-Added Producer Grants. The 2026 round offered up to $50,000 for planning and $200,000 for working capital, with matching funds at least equal to the grant. It closed on 22 April 2026, so watch for the next notice. See our Value-Added Producer Grant guide.
US: Dairy Business Innovation Initiatives. In June 2026, the Midwest's Dairy Business Innovation Alliance announced $2.9 million in Dairy Business Builder grants for 28 Midwestern dairy businesses, more than half of them farmstead businesses. Check whether your region has a similar initiative open.
Canada: Sustainable Canadian Agricultural Partnership. This federal-provincial cost-share framework runs to March 2028. Ontario, for example, has run a Dairy Processing Modernization initiative, now closed, so check what your province has open.
UK: ask your national farm advice service and your local council's rural team what capital grants are open this year.
See our full list of agritourism grants and funding for more.
Your 90-Day Path From Commodity to Premium
You do not need to change your whole farm. You need one test, one price and one list.
Days 1 to 30: Ask and count. Choose one play. Count gate traffic. Call your insurer, your food authority and your milk buyer (check your contract allows you to keep some milk back). Price three competitors.
Days 31 to 60: Test small. Run one paid tour, one class or one weekend market stall with farm ice cream made under your name. Collect every customer's contact with permission.
Days 61 to 90: Launch and review. Look at what sold, what people asked for and what they paid. Set your season price. Then decide whether the next step is a vending hut, a parlour or more tour dates.
If the swings in milk prices keep you awake, read why betting the farm on one commodity is so risky right now.
What a Durian Farm in Malaysia Taught Me About the Milk Cheque
I am the founder of Bloopy Durians in Bentong, Malaysia. Durians are not milk, but the lesson is the same.
Our durian seasons are short, about four to five months a year, from December to February and June to August. Sold on their own, durians are a commodity. The price is whatever the market says that week.
So we do not sell only fruit. Our farm welcomes visitors from all over the world, and many companies send their staff and management. They come for a 1.5-hour farm tour with a four-wheel-drive ride, then durian tasting, where I teach them how to tell a good durian and they open one themselves.
Then something else happens. Past guests join our Farm WhatsApp group, and they buy durians from us every season.
People pay more for the personal experience than for the fruit alone. The durian is the commodity. The tour and the relationship are the premium.
Your milk is the same. The litre is the commodity. The visit, the scoop, the class, your name on the bottle and the list of people who trust you: that is the premium nobody can take off your cheque.
Frequently Asked Questions
What is value-added dairy?
Value-added dairy means earning more from your milk by changing how it is sold, instead of sending it all to a processor at the commodity price. Examples include farm-gate milk vending, farm ice cream, cheese and butter, glass-bottle delivery, paid farm tours, calf experiences and classes.
How much more is organic milk worth than standard milk in New Zealand?
Fonterra's 2026/27 forecast midpoints, announced on 30 October 2026, are NZ$15.25 per kgMS for organic milk and NZ$9.75 for standard milk. That is about 56% more, or roughly NZ$0.52 more per litre. These are forecasts and can change before the season ends on 31 May 2027.
How much does a milk vending machine cost to set up?
Farmers Weekly reported in 2022 that a full UK set-up averaged about £30,000 including a pasteuriser, with small pasteurisers at £6,000 to £15,000. Prices have likely moved since, so get current quotes, and add the cost of a hut, power, bottles, insurance and testing.
Can I sell raw milk from my farm?
It depends where you farm. Registered farms in England, Wales and Northern Ireland can sell raw cow's milk direct to consumers, but it is banned in Scotland and Canada, and US rules vary by state. Pasteurised milk is usually the safer route. Ask your food authority first.
How long does organic dairy conversion take?
In the UK, land conversion is generally two years, and cows need at least six months on organic feed before their milk is organic. In the US, land needs 36 months without prohibited materials, and a herd takes 12 months to transition. An experience or your own brand can start earning within a season.
Do I have to stop selling to my milk buyer?
No. You can sell part of your milk yourself and send the rest to your buyer, as The Good Cow does with Fonterra. Check your milk contract first, because some limit how much milk you can keep back.
Your Next Step: Plan Your First Paying Season
Who will come? How much space do you need on your busiest day? What will year one cost, and how many visitors do you need to break even? What will the insurer ask?
The First-Season Profit Plan answers those questions in four decisions, so you can open your farm to paying visitors even if you have never hosted a single guest.
Inside the 39-page workbook you get:
The 40-Mile Sweep: scout your market and choose your launch season.
The Busiest-Hour Calculator: size and lay out your land for your biggest crowd, including the "land hog" new hosts forget to budget for.
Lean Launch vs Big Splash: see the $36,170 difference in year-one cost, and why one needs four times the visitors to break even.
The $4 lesson: how adding just $4 per visitor can cut the visitors you need to break even by 142.
8 questions to ask your insurer, plus permits, parking, an emergency plan and a bad-weather policy.
The 8 a.m. rule for rainy days, because one rained-out Saturday can wipe out around a tenth of a season.
A 12-Week Countdown and an Opening Day Scorecard with the 8 must-haves.
It comes with six printable worksheets, as an instant PDF download, for US$37. It is backed by a 30-day money-back guarantee, so you can read it, use it, and decide.
Not sure your farm is ready for visitors yet? Find out with our free quiz.
Want more ideas first? Get 150 practical ways to earn more from the land, buildings and skills you already have, free.
P.S. Phil and Steve Hook did not wait for the dairy industry to value their milk. They filled twelve bottles in their kitchen. Your first twelve bottles might be a tour, a class or a tub of ice cream with your farm's name on it. The tanker sets one price. You can set the other.
By Stephen Loke of AgritourismSuccess.com, whose farm is featured in Bloomberg News and Asahi Shimbun. This article is general information, not legal, tax or financial advice. Prices and forecasts quoted were correct at the time of writing and can change.
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