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The report, commissioned by the Fonterra's Shareholders' Council and prepared by Northington Partners, was released this week.
It was in response to an increased level of commentary within the supplier base, media and the financial community in relation to its perceived performance, council chairman Duncan Coull said.
Fonterra was formed in 2001 from a merger of two major dairy co-operatives, Kiwi Co-operative Dairies and the New Zealand Dairy Group, with the New Zealand Dairy Board.
The report said the country's largest dairy co-operative had failed to deliver meaningful returns over and above the cost of capital since inception.
Milk growth over the past 15 years had been an impediment but was now largely past. It had been critical that was addressed to ensure continued supply of milk and capital.
Given the increased competition for milk in New Zealand, Fonterra needed to "do better" to earn the trust of farmers, the report said.
Mr Coull said the information in the report should inform a wider discussion between the board, management and shareholders on the continued evolution of the co-operative, particularly on what could be done to ensure ongoing returns at least met the opportunity cost of investing in Fonterra.
The council still remained firmly of the view the co-operative structure was the only structure that would provide for the enduring needs of its inter-generational farming families.
Meanwhile, Fonterra's interim chief executive Miles Hurrell is being paid "substantially less" than his predecessor.
Speaking at the co-operative's annual meeting in south Waikato yesterday, chairman John Monaghan would not divulge Mr Hurrell's salary but said it was substantially less than what Theo Spierings took home.
Mr Spierings, who exited the company in September, earned $8million in the 2017 financial year, and $3.5million in the 2018 year.
Last month Fonterra posted a net loss of $196million, its first loss.
Mr Hurrell told around 300 farmer shareholders at the meeting the company had plans to turn around its financial performance and no longer aimed to produce as much milk as possible. - Additional reporting The New Zealand Herald