The announcement came a day after Murray Goulburn Co-Operative opened at 26-27 cents per litre and Warrnambool Cheese and Butter at 28 cents per litre.

The declaration means that virtually all south-west dairy farmers have now received their opening prices, with little variation between processors.

Fonterra's announcement, like the two before it, was apologetic in tone.

"The opening 2009-10 prices reflect the difficult conditions the industry is currently experiencing as a result of the global recession," national milk services manager Heather Stacy said.

"We are acutely aware that many dairy farmers are doing it tough.

"Milk powder is currently trading at $US2000 per tonne while at the same time the Australian dollar is up around 80 cents.

"These factors are putting severe downward pressure on Australian prices."

To help offset the effects of the low price, Fonterra is offering its suppliers interest-free payment advances for the next six months.

With all south-west farmers receiving prices in the 26 to 28 cents range, most will be operating at a loss until prices improve.

While the break-even point varies with farming methods, debt levels and the amount of labour employed, various analysts have quoted production figures ranging from 34 cents upward for typical south-west farms.