This week Fonterra announced its plans to lift performance, with chief executive Miles Hurrell saying the co-op will be dropping its volume-based ambition to focus on value instead.

Fonterra's Head of Farm Source for Canterbury/Marlborough/Tasman Charles Fergusson spoke to The Country Early Edition's Rowena Duncum about the key points of the co-op's new direction.

Read more: Value not volume for Fonterra says Miles Hurrell

"We're dropping our volume-based ambition ... we're going to really focus on maximising New Zealand milk ... we're going to live more within our means ... we're going to ensure we deliver a respectable return on capital and we're going to supply more realistic forecasting."

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Fergusson says Fonterra is taking every practical step to improve its performance and that the process will take time.

"There is no silver bullet here."

Value has always been a priority for Fonterra and it hasn't always been "volume for volume's sake," says Fergusson, but he admits there has been a "bit of confusion," in the past. Now Fonterra will focus on putting value first.

Reaction to Fonterra's plans has resulted in "positive" feedback from its farmers says Fergusson.

"So far, they're appreciating what they're hearing."

Also in today's interview: Charles Fergusson talks about whether Fonterra will continue to have milk pools around the world, and how the co-op intends to live within its means.