Fonterra has trimmed its forecast milk payout for the current season because of weaker prices and demand, and inflation.
Fonterra chief executive Miles Hurrell said the longer-term outlook for dairy remained positive. File photo Photo:
The dairy co-operative is forecasting a payout in the range of $8.50 to $10 per kilogram of milk solids, with a midpoint of $9.25, down 25 cents from the previous forecast.
Fonterra chief executive Miles Hurrell said the reduction was driven by several factors.
"The change ... will be disappointing for our farmers but it reflects a number of factors, including the recent downward trend in global dairy prices driven by some short-term softening in global demand, and the general impact of inflation on purchasing behaviour."
"However, we believe the longer-term outlook for dairy remains positive."
Dairy prices in the fortnightly auctions have fallen about 30 percent from record highs in March.