Fonterra has reported a net loss of $196 million for the year ending July, the first time it has reported a loss in the 17 years it has been operating. Last year’s net profit was $735 million.

“There’s no two ways about it, these results don’t meet the standards we need to live up to,” chief executive Mile Hurrell said in a statement. “In 2018, we did not meet the promises we made to farmers and unit holders.”

Hurrell said that three factors contributed to the loss.

“First, forecasting is never easy but ours proved to be too optimistic.

“Second, butter prices didn’t come down as we anticipated, which impacted our sales volumes and margins.

“Third, the increase in the forecast Farmgate Milk Price late in the season, while good for farmers, put pressure on our margins. And fourth, operating expenses were up in some parts of the business and, while this was planned, it was also based on delivering higher earnings than we achieved.”