And as a result, the milk processor won't pay out interim dividends to shareholders.
Chief executive Miles Hurrell business is growing, despite not meeting forecast earnings.
He says they're behind where they planned to be - but it's still a growth story from a wider Fonterra perspective.
ASB Rural Economist Nathan Perry says the net gain for farmers is still positive.
However, he says Fonterra still has some financial performance concerns - which could take several years to address.