Fonterra has drastically cut its forecast Farmgate Milk Price -- with the midpoint falling from eight-dollars-per-kilogram of milk solids, to just seven-dollars.
It's blaming reduced demand for whole milk powder from China.
Rabobank Senior Agriculture Analyst Emma Higgins says the latest expected midpoint is now 24 percent less than where it was this time last year.
She says dairy commodity prices are now below five year averages -- which is what's driving this adjustment coming through.
Higgins says for some dairy farmers that adjustment will unfortunately be quite painful.
