Fonterra has dropped from third to fourth place in Rabobank's latest survey of the world's top 20 dairy companies.
The dairy co-operative, which is the world's largest exporter of dairy products, has been overtaken by French company Lactalis.
Top of the list and unchanged from last year is Swiss company Nestle, with turnover in 2011 of US$25.9 billion ($32.5 billion). Fonterra's turnover for 2011 was about $19.9 billion.
While 18 of the companies were the same as the previous year, the survey also demonstrated some significant changes, including the continued rise of Lactalis.
The biggest strides up the table were made by the "Chinese giants".
Having entered the top 20 for the first time in 2010, Yili moved up four places into 15th and Mengniu moved up two places into 16th, riding the wave of domestic market sales growth.
Despite the rise of the Chinese, the list remained dominated by those firms based in OECD countries.
Growth in traditional dairy markets over the next five years was expected to slow, as the industry battled economic and demographic headwinds, already high dairy consumption levels, overweight consumers and concerns over the cost of dairy products.
By contrast, emerging markets such as China, Southeast Asia, India and Latin America were expected to offer good sales growth with almost the opposite trends in place.
Sixteen of the largest 20 dairy companies had investments in manufacturing in Asia and/or Latin America, while 15 had investments in China alone.
Rabobank expected to see companies continue to vigorously pursue merger and acquisition targets in the next 12 months as they jostled to position themselves for growth and profit in a changing market environment.
The ASB New Zealand commodity price index increased 0.4 per cent in New Zealand dollar terms over the past week, with slightly higher dairy prices and the price of meat and forestry broadly flat in international markets.
Meanwhile, yesterday, whole milk powder, the biggest-volume dairy product sold through Fonterra's GlobalDairyTrade auction platform, led the third month of declines, pushing the benchmark composite price further below its long-term average.
The auction's trade-weighted index fell 0.9 per cent compared with the last sale two weeks ago.
The average winning price dropped to US$2756 a tonne from US$2787 a tonne in the last sale. Whole milk powder, which typically accounts for almost two-thirds of volume, fell 6.4 per cent to US$2762.
Volumes through the GDT platform are still holding up, with 37,063 tonnes sold in the latest sale, which is higher than the average of about 32,000 tonnes per sale over the past two years.
In the latest auction, skim milk powder rose 5.2 per cent to US$2727 a tonne. Anhydrous milk fat rose 3.3 per cent to US$2845 a tonne and cheddar dropped 2.9 per cent to US$2986 a tonne.
Butter milk powder climbed 7.2 per cent to US$2662 a tonne. Milk protein concentrate rose 2.4 per cent to US$4157 a tonne and rennet casein fell 1.8 per cent to US$6333 a tonne.
- Otago Daily Times, BusinessDeskBy Sally Rae