Rural economies will be $2.5 billion worse off after Fonterra cut its forecast payout to farmers for this season.
The forecast payout has been cut from $5.25 to $3.85, which is a long way below the record payout farmers enjoyed for the 2013/2014 season.
Fonterra also hopes to pay its shareholding farmers a dividend of between 40 and 50 cents.
But that is well below Dairy New Zealand's estimated breakeven point of $5.40.
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