However the loss, hard on the heels a $196m loss for the previous year, will not put farmers out of business, North Canterbury Federated Farmers president Cameron Henderson says.
''Their share value and dividend return have taken a real hit,'' he says. ''However, the share value is only an issue if farmers are looking to sell shares and most aren't.
''The dividend will have a negative cashflow impact and will be where the most pain will be felt.
''Overall, though, the milk price is very healthy this year so the Fonterra loss won't be putting farmers out of business.'' He also believes that Fonterra's hefty losses do not make the company vulnerable to an overseas takeover bid, similar to the successful acquisition of Westland Milk by Chinese dairy giant Yili last August.
''Fonterra is a farmer-owned co-operative so would require the approval of a buyout from its farmer-suppliers, similar to Westland,'' Cameron says.
''However, the financial situation of Fonterra and its farmers is very different to Westland so I do not see any mood among shareholders to sell the co-op.''
The losses at Fonterra are mostly related to its international investments losing value and having to be revalued lower.
Although Cameron is not a Fonterra shareholder, he says critics have argued that the losses on foreign investments were a result of a poor strategy and bad investment decisions astray from the core capabilities of the business.
''However the day-to-day operating of the business is still very successful, so hopefully the losses are short-lived.''
Despite the losses, Cameron believes farmers still have confidence in Fonterra's management, which has undergone significant change in recent years, with a new chairman, some new directors, and a new chief executive and leadership team appointed.
''The first step in fixing a problem is admitting you have one, which Fonterra has finally done in writing down the value of the business. The next step is finding a new strategy that plays to the strengths of the business.
''This strategy has been announced so now just needs some fine-tuning and good execution.
''The farmers I have talked to back the direction of the new strategy and the new CEO Miles Hurrell to deliver it.''
