Fonterra's share and unit prices fell sharply this morning after farmers became eligible to sell more of their so called "dry", or non-production related shares.
In early morning trading the units, which can be owned by any investor, were down by 26c (3.45 per cent) to $7.28 and the Fonterra shares - which can only be owned by farmers - were down by 32c (4.23 per cent) at $7.25. The shares and the units are designed to loosely track each other.
As of today, farmers' requirement to hold shares based on production moved from a fixed number to a three-year rolling average. For many farmers, this means a significant increase in the number of dry shares which they are able to sell.
One fund manager said the fact that the last so called "supply" offer, which enabled farmers to sell economic rights to their wet shares, had to be scaled back showed there was plenty of interest by farmers to sell.
