Otago Federated Farmers president Mike Lord said if shareholders wanted Fonterra to grow and lower debt, they would have to come up with the capital themselves now they had rejected opening up part of the company to outside investors.
It could be done from within Fonterra, but shareholders had focused on getting the highest payout.
If they wanted to expand the company, they had to put money back in, he said.
Fonterra chairman Sir Henry van der Heyden moved on Saturday to end speculation on capital-restructuring plans by announcing his board had rejected a public share listing.
Shareholders rejected a partial float when the dairy co-operative last suggested the idea several years ago.
The board accepted it would not get the 75% shareholder support needed to change the constitution if it was on the table again, Sir Henry said in an interview.
"We are formally taking a listing off the table, so it does set the scene and makes for a clear consultation process with farmers. At least we will not have that discussion."
Details of a three-step package would be announced to shareholders on September 18.
A vote on the first of those measures could be held at Fonterra's annual meeting in November, but that timetable was flexible, Sir Henry said.
Fonterra sought new capital to pay down debt, invest in expanding the company and reduce the risk associated with shareholders cashing in all or some of their shares.
Mr Lord, a Taieri dry stock dairy farmer, said changes to Fonterra's capital structure needed to look after its existing shareholders and ensure new shareholders met the full cost of entry.
He would also like to see Fonterra accept milk supplied under contract, or "unshared" milk, but for a price that did not disadvantage shareholders who supplied milk.
Sir Henry said the board, with the unanimous support of the Fonterra shareholders' council, had settled on a three-step process that, if accepted by farmers, would provide a capital structure for the company's immediate future.
Redemption risk was an issue for Fonterra.
Farmers have to own shares in Fonterra that relate to their milk production, but when production falls, farmers can redeem shares, which removes equity from the company's balance sheet, affecting debt-to-equity ratios.
After the 2007-08 drought, it spent $600 million buying surplus shares from shareholders.