The world's largest dairy exporter, Fonterra Co-operative Group, and Australia's biggest dairy producer, Murray Goulburn Co-operative Co, are being investigated over cuts to the milk price paid to farmers.

Dairy farmers were surprised and angered when both firms reduced their farm gate prices from $5.60 a kilogram of dairy solids to between $4.75 and $5 a kg in the past month.

The investigation, by the Australian Competition and Consumer Commission, will examine the timing and notice of the cuts, its chairman, Rod Sims, said in comments emailed to Reuters.

"The ACCC will consider whether the changes have involved misleading conduct or whether there are elements of unconscionable conduct," he said.