New Zealand dairy giant Fonterra posts record revenue but cuts its projected payout to farmers amid market volatility.

On Wednesday Fonterra announced revenue rose 19 percent to 22.3 billion New Zealand dollars ($18 billion) in the year ending July when compared to the previous year. After-tax profit was down 76 percent to NZ$179 million.

Last year the company paid farmers a record NZ$8.40 per kilogram of milk solids, but this year projects it will pay them just NZ$5.30, down from an earlier forecast of NZ$6.

Fonterra is the world's largest exporter of dairy products and New Zealand's biggest company, a cooperative owned by 10,500 farmers.

Fonterra Chairman John Wilson says the latest forecast reflects market volatility due to global geopolitical and economic uncertainty and an imbalance in supply and demand.