Fonterra has told its farmer shareholders to expect a higher payout for its milk next year but warns the volatility in global markets will continue.
About 300 shareholders are attending the dairy co-operative's annual meeting at its Waitoa plant in Waikato.
Chairman John Wilson said the $18 billion company had faced unprecedented variability and volatility, resulting in big swings in the global milk price.
He warned that the volatility may continue though the imbalance between supply and demand was reducing.
Mr Wilson said the transformation that resulted in hundreds of job losses was essential as the company needed to be more agile.
Production was down 5 percent this year.
However, the company expected to make a higher total cash payout of $4.95 to $5 per kilo of milk solids next year.
Fonterra also promised to communicate better with farmer shareholders after criticism over its lack of transparency about the business.
Mr Wilson said the cooperative had dropped the ball over communicating with farmers this year on a number of issues.
He said the board and management would hold a series of meetings with farmers around the country over coming months.
Fonterra chief executive Theo Spierings told shareholders New Zealand's dairy industry and the world in general was facing turbulent times and the co-operative needed to stay on course and focus on its performance.
He also pointed to China's market having a $10 billion potential.
Bid to downsize board fails
Shareholders at today's meeting voted 53.8 percent in favour of having fewer board members - short of the required 75 percent to guarantee change.
A resolution - one of 11 put forward - had called for a downscaling of the board from 13 to nine, with a reduction in the number of farmer-elected directors and those appointed.
Former directors Greg Gent and Colin Armer, who put the resolution forward, had proposed reducing farmer directors from nine to six and appointed directors from four to three.
Mr Wilson said he supported the idea of a smaller board in principle but said there needed to be a good mix and skill set among directors.
Fonterra said it planned extensive consultation with its shareholders on governance next year, culminating in a special shareholder meeting.