Mr Nattrass, who is also a Fonterra director, said in an interview there was little doubt some farmers had debt exceeding what current earnings could service, but he said that did not spell the end of dairy farming as implied by the Macquarie report.
"You'll never see an empty farm in New Zealand because people always occupy land to produce something off it," he said.
As with any market, some people would lose money entering or exiting a farming business and there would always be change in land use such as the change from sheep to grapes in Marlborough and Central Otago, or sheep and beef to dairy in Canterbury, Otago and Southland.
"The question is which industry provides the best returns and gives growers the best opportunities, and nothing suggests that anything other than dairy does it better."
The amount of borrowing by the dairy industry might put some individuals at risk, but not the industry.
"To claim it puts the [dairy] industry at risk is a nonsense. The industry would only be at risk if it earned less than an alternative land use."
Fonterra has also responded to accusations in the report, saying much of it was opinion and confused what was happening inside farm gates with the quality of bank loans and issues outside the farm gate.
A spokesman said the report assumed dairy was not the best use of land and therefore the viability of the dairy company was at risk.
If debt drove a dairy farmer off the land, the land purchaser was more than likely another dairy farmer.
If the report's concerns were partly realised, the exchange rate would fall which would benefit exporters.
The $800 million Fonterra raised through bonds replaced bank lending.
Concerns that rating agencies rated Fonterra favourably because it could reduce its milk price ignored how the industry operated.
Fonterra collected, processed and sold the milk, met all its costs and paid suppliers what was left over.
The key was to maximise what was left over to ensure farmers stayed in business and were therefore loyal to Fonterra.
The $4 billion raised in debt between July 31, 2008, and January 31, 2009, was within Fonterra's equity ratio limits and the spokesman said the company was improving that ratio.
Macquarie also criticised Fonterra for raising bonds without releasing its half-year result, but the Fonterra spokesman said the company did not have a final milk price or its cost of goods for the year at that stage.
