If prices at next week's global dairy trade auction don't increase dramatically then Fonterra's forecast payout of $4.60 per kilo of milk solids might not be attainable this season, Federated Farmers dairy chairperson Andrew Hoggard says.
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Dairy farmers should also plan for a low payout next season, Mr Hoggard said.
Fonterra should announce any revisions in the farmgate milk price as soon as possible to help farmers plan, he said.
"If the next auction is going to be like the previous two, I dare say it will give me a fairly strong gut feeling that $4.60 won't be attainable this season.
"Anything can happen, anything can change, and you could suddenly see a dramatic increase but given the trend, given the mood, if the next auction is not an improvement, it's safe to say that $4.60 won't be attainable.
"As soon as [Fonterra] know information and are seeing a trend and assuming a certain outcome, I think they should communicate that to farmers along with all the various uncertainties which are figuring into it.
"That way, at least farmers have got an idea. We know what they are telling us isn't a rock-solid thing... but we can at least make our own choices and our own decisions."