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Fonterra made some big announcements yesterday in its third quarter Financial Report, including a narrower forecast Farmgate Milk Price range for the 2018/19 season.

Fonterra now expects to pay $6.30-6.40 per kilogram of milk solids in the current season - which ends on May 31 - versus its February forecast of $6.30-6.60/kgMS.

Managing Director for Co-operative Affairs Mike Cronin told The Country Early Edition's Rowena Duncum that Fonterra looks 15 months ahead with its range forecast, and still advises farmers to "always budget with caution".

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Read more: Fonterra narrows milk price forecast, closes Aussie factory and signals more asset sales

The dairy giant also commenced a strategic review of its two wholly-owned farm-hubs in China.

Cronin said although China was a "key" market for Fonterra, the way the co-op delivered its commitment to that market would "change over time".

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"We're going to have a review and have a look to see if we necessarily have to have as much capital tied up in those farms going forward."

In further asset restructuring, Fonterra announced the closure of its Dennington factory in Australia.

The closure resulted in 98 redundancies, so the decision was "really hard" said Cronin.

"But we're making sure that we're going to look after them going forward."

Also in today's interview: Cronin talks about how Fonterra is reviewing options for the future ownership of Dairy Partners Americas (DPA) Brazil joint venture with Nestle and gives an overview of the co-op's performance for the third quarter.

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