One of Australia's largest dairy companies is planning to change the way it pays farmers for their milk.

The Dairy Farmers Milk Co-operative has about 780 suppliers across Queensland, New South Wales (NSW), South Australia and Victoria.

It is looking to simplify its payment model and suppliers will now be paid for the amount of butterfat and protein in their milk. However, the company's chairman, Ian Zandstra, said it could result in some dairy farmers getting less for their milk.

"Fonterra, Murray Goulburn and National Foods all pay this way. They have variations around that fat and protein pay. But everyone pretty much pays this way," he said.

Shareholder meetings will be held from next month about the new payment model.