New Zealand dairy giant Fonterra announced a further 227 job losses on Monday in a bid to remain competitive in "challenging market conditions", as global dairy prices plummet and Chinese demand continues to wane.

The latest cuts follow 523 jobs slashed in July and Fonterra chief executive Theo Spierings warned there could be more to come at the world's largest dairy processor.

"We have great people, but we have to make tough decisions to ensure Fonterra remains competitive in this environment," he said in a statement to the New Zealand stock exchange.

"We will continue to fine-tune our organisation to ensure we best support the initiatives identified by our business review."

Dairy prices have almost halved in the past 12 months as a China-led boom has petered out, forcing Fonterra to review operations.