Dairy giant Fonterra says strong international markets mean this season is shaping up as one of the best ever for returns to its farmer owners.

An increase in the number of farmers failing to meet effluent rules is unacceptable, says dairy giant Fonterra.

An increase in the number of farmers failing significantly to meet effluent rules is unacceptable, says Fonterra. Significant non-compliance increased by 1 per cent to 16 per cent for the 2009/10 season.

Prices in Fonterra's latest online auction have fallen 8.2 per cent.

Specially trained staff from Fonterra have joined the recovery effort in Christchurch city centre.

The price of milk powder rose to the highest level in three years in Fonterra's latest online auction.

The search is on for a new chief executive at Fonterra, with the announcement that Andrew Ferrier is stepping down from the job.

Fonterra is increasing its forecast payout for the current season by 60 cents per kilo of milksolids. This means an average payout of around $1 million to its farmers shareholders.

Agriculture Minister David Carter has ruled out government intervention to keep milk prices down, saying high international prices will benefit the New Zealand economy.

Prices in Fonterra's latest online auction have been pushed to record levels but recent volatility means picking the top of the cycle is proving tricky.

Freeze comes a day after the Government ordered a review of whether the local market was working well for consumers.

The price of milk powder rose to the highest level since Fonterra began its online auctions in July 2008 in last night's auction.