The next season would be a ''tough one'' for farmers because of the forecast lower milk price but the long-term prospects were still strong, chairman John Luxton said.
With the looming prospect of a lower milk price, dairy farmers would be focused on reducing production costs.
It was a timely reminder of the volatility of the industry.
In South Canterbury, which is hosting the annual meeting for the first time, more than 1900 people are employed in the dairy sector.
That is about 7.4% of regional employment and does not include self-employed farm owners and sharemilkers running dairy farm businesses locally.
Fonterra's Clandeboye site has more than 800 staff and processes up to 13.2 million litres of milk per day, equating to more than 40% of all milk collected by Fonterra in the South Island.
The new $214 million Oceania Dairy factory at Glenavy, owned by Chinese dairy giant Yili, showed confidence in dairying in the region, Mr Luxton said.
Meanwhile, Rural Contractors New Zealand has questioned the high cost of machinery and parts.
Cost-cutting would be ''top of mind'' for dairy farmers this year, president Steve Levet said.
''With the reality of a lower dairy payout this year, sheep and beef farmers already under the pump and arable producers also feeling the squeeze, further pressure is going to come on contractors to at least hold or reduce our costs.
''Rural contractors do not have the luxury or the ability to absorb continued cost increases and just pass them on in our pricing to clients.
''So while farmers are not able to wear any price increases, contractors certainly cannot afford to carry on losing money, either,'' he said.
A key area of cost for most rural contracting businesses was parts and machinery.
Many were sourcing parts from either non-aligned dealers or the internet and there were risks in not sourcing from machinery dealers.
While Mr Levet said he was not making a direct criticism of machinery dealers, he wanted to highlight an example of the cost problems facing contractors.
If there was a way rural contractors and machinery dealers could resolve the issue, RCNZ was ''keen to be party'' to that.
• DairyNZ's annual meeting is at the Grosvenor Hotel at 11am on Thursday, October 16.
