A dairy farming spokesperson says it comes as no surprise that the financial impact of this year's drought has forced Fonterra to lower its operating profit forecast.
The dairy co-operative has revised its earlier forecast of earnings before interest and tax of almost $1.08 billion down to about $1 billion.
It says the drought has contributed to a 64% rise in global whole milk powder prices since early this year, significantly cutting margins for its New Zealand Milk Products subsidiary.
An accelerated restructuring programme for its Australian operations has also had an impact because of further write-offs.
Federated Farmers dairy vice-chair, Andrew Hoggard, says farmers will be relieved that Fonterra has not changed its forecast payout to farmers for the season just finished, which remains at $6.12 a kilo of milk solids.
But he says they should not be be too complacent, as the company is reviewing the payout for the current season next week.
That payout is forecast to be $7 a kilo.
But Westpac Bank says the combination of a weaker NZ dollar and strong recent global prices should see a milk price of $7.40 this season.
