High farm input costs, challenging seasonal conditions and increased competition in Australia have hurt its milk supply, the cooperative said.
In New Zealand – where Fonterra sources most of its milk – production rose marginally in August, amid slightly higher rainfall and better pasture cover.
New Zealand milk production rose 0.8 per cent in August from a year ago, while collection grew 1.1 per cent, the dairy company said in a statement.
The company’s dairy exports to China grew 14 per cent in July, Fonterra said, driven by increased demand for products such as skim milk, cream, condensed milk and yoghurt.
Last week, in a highly anticipated turnaround plan, the dairy company called a halt to its ambitious and ill-fated overseas expansion and pledged to turn its focus back home, after posting a record annual loss.
The company has been buffeted by strong criticism from the 10,000-plus farmers who make up its cooperative as its foray into countries like China and value-added consumer products hurt its profits in recent times.