New Zealand Farming Systems Uruguay says most of its irrigation plans for its dairy farms will be completed by next summer, which should ease the effects of any further dry spells on milk production.
A dry summer and autumn led the company, which is 85% owned by Olam International of Singapore, to cut its operating earnings forecast to a loss of between $US3 - $US5 million for the year to June.
In February, the farm development said it expected to break even.
Chief executive David Beca says while milk production has increased by half this year, the pace of expected growth has been curbed by dry weather conditions.
He says for most of April and May there was almost no rain in all the Uruguay regions where New Zealand Farming Systems operates which lead to very low levels of grass growth and impacted on the level of milk production.
Mr Beca says it's also experienced delays to completing eight new dairy farms, though all should be opened over the next month.
He says its irrigation plans are well advanced, and should help grass growth in testing conditions.
Mr Beca says if there are the same conditions this coming summer, the company is in much better shape to deal with it, because it will have close to its full amount of planned irrigation.
He says if changes in the value of its livestock are included, Farming Systems expects gross earnings to break even in the June year.