Massey University says Fonterra has dropped at least 1600 suppliers as it tries to cut costs.
The university’s agribusiness expert Dr James Lockhart says that because there is a global oversupply of dairy products the prices are at their lowest in the last 100 years.
Earlier this year the dairy giant came under fire for changing its payment times from 30 days to 90 days.
The Paul Henry show received an email from a supplier who has been told by Fonterra it will reverse their payment terms from 90 days back to 30 days.
Dr Lockhart says Fonterra are using “considerable discretion” when it decides which supplier to return to the short payment contract.