Fonterra has made it a priority to include Australia as part of its "home" market.
Chief executive Craig Norgate told the Massey University annual dairy conference that the company's predecessor, the Dairy Board, had lacked a domestic market.
"A strong dairy industry needs a strong home market," he said. "The Dairy Board
didn't have one and New Zealand alone doesn't provide the base needed. We're now considering how best to organise our assets in Australia."
Fonterra owns significant portions of the Australian dairy industry outside the town milk sector. It holds 18.2 per cent of National Foods, owns Peters and Browne's dairy distribution network and ice-cream business in Western Australia, and co-owns Bonland Dairies, with Bonlac Foods.
New Zealand industry observers have said Bonlac's role as Australia's largest dairy ingredients business and its big export markets in Japan, the Middle East and Asia are a central focus for Fonterra.
Bonland Dairies, started last September, already has an annual turnover of $600 million.
Norgate said that globally Fonterra's general direction seemed to be right, and recent market developments were giving it further pointers.
"Commodity prices have fallen, driven by subsidies in the EU and the US," he said.
"I think the commodity cycle is speeding up and prices should rise again quickly, but that can't be banked on.
"Eighty per cent of our business is commodities and that won't change in the near future, but we expect the fastest future growth to be in further processed goods."
- NZPA
