Dairy farmers have been dealt another blow as Synlait joins dairy giant Fonterra in cutting its forecast milk price for the current season.
The Canterbury-based dairy processor reduced its forecast milk payout today to $4.20 per kilogram of milk solids from a previous estimate of $5.00/kgMS as global milk supplies continue to outweigh demand.
Synlait chairman Graeme Milne said ongoing low milk prices and a sluggish recovery of the dairy industry has driven the revision.
"Our previous forecast of $5.00/kgMS expected prices to recover somewhat by this stage in the season, however this hasn't happened and our revised forecast reflects this," he said.
"Similar to this time last year, there is still a lot of uncertainty.
"Low oil prices mean cheap feed for farmers in Europe, USA and China while demand for imported dairy commodities by China, the world's largest importer, has declined as their local milk production has increased."
Fonterra cut its forecast milk payout to $4.15/kgMS from $4.60/kgMS last week while DairyNZ estimates that around 85 percent of dairy farmers are set to post a loss this season.