Goodman Fielder is reviewing its New Zealand dairy business after its earnings were hurt by record milk prices.
High dairy and rising wheat prices in Australia pushed the Australasian food group to a $A64.8 million loss in the first half of the 2014 financial year.
The loss compares with the $51 million profit it posted for the same six months the previous year and reflects the costs of selling some of its businesses including its meats and pizza units in New Zealand.
Goodman says the price farmers charge for their milk has surged 40 percent and New Zealand Dairy has been unable to pass on the full cost to customers.
The division has well known brands such as Meadow Fresh, Chesdale and Tararua.
Revenue rose 18 percent to $234 million, but farmgate prices dragged on earnings and margin.
Normalised earnings declined 39 percent to $11 million.
Goodman said it is looking at strategic and partnership options for New Zealand Dairy so that it can enhance and grow the business across the region.
In other divisions, the company said better marketing and brand innovation has led to improved performance of its big brands in its baking division, including Freya's and Vogels.
Goodman previously expected an earnings improvement this financial year and says the second half will pick up.
But it now expects the full year profit to be similar to last year's due to the persistently high commodity prices.
Goodman's shares fell nearly 3 percent to 69 cents in New Zealand, and were down more than 7 percent to 63 cents in Australia.
