Fonterra said it would sell its Farm Source livestock division to family-owned national rural services company Carrfields Livestock, effective from March 1.
The sale price was not disclosed.
Farm Source stores director Richard Allen said the decision to sell was made in the context of a larger review underway within Fonterra.
"In the context of the review of the co-op's assets and investments, we have made the decision to sell the livestock division to Carrfields Livestock," Allen said in a statement.
"While Farm Source's livestock division has contributed positive returns since inception, we believe the investment required to maintain and grow this division can be more effectively targeted towards improving core areas of the Farm Source business," Allen said.