Fonterra has reported a drop in half-year earnings and lowered its dividend.
The dairy processor and exporter made a profit of $183 million in the six months to the end of January, a decrease of 16 percent compared with the same period a year ago.
Sales fell 14 percent to $9.7 billion.
Fonterra left its milk price forecast unchanged at $4.70 a kilo of milk solids, but lowered the dividend by 5 cents to between 20 and 30 cents a share.
Chairman John Wilson described the result as below expectations, due to rising global supply, fickle demand and weaker prices.
Theo Spierings, Fonterra CEO Photo: RNZ / Diego Opatowski
While Fonterra chief executive Theo Spierings said its three main divisions - ingredients, consumer and food service and international farming had mixed fortunes due to falling dairy prices.
The company said the volatility in dairy prices meant its farmers should be prudent when planning their budgets.
An interim dividend of 10 cents a share has been declared.
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In contrast, Synlait Milk has lifted its milk price forecast.
The Canterbury-based processor has moved its market milk price from $4.40 a kilo of milk solids to a range of $4.50 and $4.70 a kilo for the current season.
Managing director John Penno said the market had recovered faster than expected, but recent volatility has shown it still remains fragile.
He said the increased forecast range should be well received by its suppliers, particularly as they head into winter.
Mr Penno expected the market would continue to recover in the medium term as consumption expands and production growth slows in response to lower prices.
Market reaction to the announcement has been swift, with the Fonterra Shareholder Fund share price falling more than 3.5 percent. By mid-morning the share price was down 22 cents to $5.77, while the Cooperative Group's share price was down 23 cents to $5.77.