Fonterra says the benefits of its Trading Among Farmers scheme are showing up, in the way it has helped the co-operative and its farmer shareholders to weather the effects of the drought earlier this year.
The summer drought had a significant impact on Fonterra's financial results for the 2012-13 year.
Its milk supply fell by 9% in the second half of the season as North Island pastures dried up.
Under previous arrangements, the company would have been required to buy back the shares that farmers no longer needed to match their falling milk production, leaving it exposed to the potentially huge cost of redeeming the shares.
Trading Among Farmers, or TAF, which came into effect at the end of November last year, means the farmers now buy and sell shares among themselves, rather than having to trade them through the co-operative.
Farmers also have the option of getting the cash value of some of their shares by depositing them in the Shareholders Fund, where outside investors can buy the dividend rights of the shares.
Fonterra chair John Wilson says it has given the co-operative a much stronger capital structure and its farmers more flexibility in dealing with events such as the drought.
The price of shares traded among farmers and units in the Fonterra Shareholders Fund rose by several cents, to $7.11, after the co-operative released its financial results on Wednesday.