KEY POINTS:
Fonterra chairman Henry van der Heyden is confident farmers will vote in favour of changing the company's capital structure later this year.
But he would not comment on speculation that the company was down to two options - both involving a partial listing.
Fonterra is reviewing the capital
structure of the co-operative to take advantage of growth opportunities in the global dairy market, protect against a redemption risk of farmers selling up and give its owners greater investment choice.
Current discussion on the capital structure review was probably not meaningful until the options considered and the preferred choice were presented in November, van der Heyden said.
"Come November some time, that's when the consultation process actually starts so that's when we'll put out our preferred option, but it's for consultation," he said.
"That's why the chance of being unsuccessful at the end will be very, very small because the farmers have actually put into what the capital structure will look like."
The co-operative would be at the heart of any options considered, he said.
"There's going to be a change but ultimately it'll be the farmers that vote on the change.
"Everyone agrees we can't stay where we are."
Dairy Farmers of New Zealand has said feedback from farmers was that they would need a good reason to devolve any control.
Van der Heyden said there was a high level of agreement among stakeholders - which were the board, the Shareholder Council and farmers - that the issues needed to be resolved.
"You actually have a look at what's happening around the world," he said.
"It's becoming smaller and smaller ... a lot more integrated and New Zealand's actually part of that and it's important that we're part of that."
Dairy farmers were in a pretty positive mood because of the milk solids payout, he said.
Fonterra's payout last season was $4.46/kg of milk solids, with a record payout of $6.40 forecast for this season.
World economic growth, strong demand for dairy products and tight supply were underlying the boom in commodity prices and rising pay-outs.
The shift of land use to biofuels production was driving up the cost of food production and was the biggest fundamental reason for the rise in commodity prices, van der Heyden said.
"I think global prices in food have gone up to a new level.
"Does that mean a high level of payout? - everything else being equal the answer is yes, but don't forget the currency can take all that away."