Fonterra expects little impact on this season's milk production from moves by dairy farmers to cut supplementary feed.
Farmers are responding to a big drop in forecast milk payouts by reducing their feed budgets. The forecast for this season is now $5.10 per kg of milk fat solids.
They're doing so by cutting the use of supplementary feed such as grain and maize silage, given to cows to boost milk production.
Chairman Henry van der Heyden says Fonterra expects more milk this season from the improved growing conditions after last year's drought.
He thinks reductions in supplementary feeding will have little effect on that.
Chief executive Andrew Ferrier also points out that if milk production does drop because of lower milk payouts, that could help in the recovery of international dairy prices, because the increased supply in world markets is one of the factors that have forced prices down.
