Yesterday's revision from $4.15 to $3.90 would lump more pressure on dairy farmers who would now be counting down the days to the end of the season.
• No cream in life on overdraft
"There are already plenty of reasons for the Reserve Bank to cut the OCR. This is another one,'' Mr Hoggard said.
Anything that eased the pressure on farmers' bottom lines would be helpful in getting them through the current season, he said.
A new level of resilience would come from this experience, but that would be lost if farmers were forced out of the industry.
Economic factors supported a cut in the OCR and that would be a welcome boost after the latest forecast news, he said.
When combined with the forecast earnings per share range of 45c-55c, Fonterra's latest revision meant a total forecast available for payout of $4.35-$4.45.
That would equate to a forecast cash payout of $4.25-$4.30 for a fully shared-up farmer after retentions.
Fonterra Shareholders Council chairman Duncan Coull described it as a "bitter pill for farmers to swallow''.
Farmers understood the market realities and continued to make adjustments where they could, but the announcement, coming so close to January's 45c reduction, would magnify the effects on their businesses, he said.
They now needed the co-operative to "drive the business hard, execute strategy, and deliver cash to them'' and would be watching the co-operative's interim results, to be released on March 23, with great interest.
Fonterra chairman John Wilson said difficult conditions in the globally traded dairy market had put further pressure on the forecast.
The latest reduction was the "last thing farmers want to hear'' in what was proving to be a very challenging season.
"At times like this, the business needs to do everything it can to drive every last cent back to farmers,'' Mr Wilson said.
Fonterra was forecasting its New Zealand milk production to be at least 4% lower than last season as farmers responded to the ongoing low prices by reducing herd size and feeding significantly less supplementary feed, which was expected to have an impact on autumn production.
Chief executive Theo Spierings said dairy exports and imports had been imbalanced for the past 18 months due to European production increasing more than expected, and lower imports into China and Russia, the two largest importers of dairy.
"The time frame for a rebalancing has moved out and largely depends on production reducing - particularly in Europe - in response to these unsustainably low global dairy prices,'' Mr Spierings said.
He reiterated the long-term fundamentals for dairy were positive with demand increasing at more than 2% a year due to the growing world population, increasing middle classes in Asia, urbanisation and favourable demographics.
The forecast was based on no significant changes to either supply or demand globally before the end of the year.
However, a reduction in supply available for export before then could mean prices recovered earlier than at present expected, Mr Spierings said.
Labour's finance spokesman, Grant Robertson, said Fonterra's forecast payout had more than halved in two years, creating an $8.2billion hole in the economy.
It would put real pressure on rural communities and farmers who were struggling to cope with high debt levels and three seasons of low payout.
"It could push more farmers to the brink of bankruptcy. That will cause real damage to their communities,'' Mr Robertson said, reiterating Labour's concerns about the economy not being diversified enough.
Westpac senior economist Michael Gordon said the latest downgrade could see business confidence slide further in coming months.
ASB rural economist Nathan Penny continued to expect the milk price to lift to $6 next season.
The last time Fonterra's milk price was as low was $3.87 in 2006-07.
