The head of Fonterra expects prices for dairy products on world markets to continue falling until the end of next year and says they might not recover till 2010.
Chairman Henry van der Heyden says farmers' cashflows will be hit over the next 12 months.
He says prices are coming down quickly and inventory is starting to build up around the world.
Mr van der Heyden estimates the difference between the forecast so far for this season's payout and last year's represents a loss of $3 billion to the New Zealand economy.
