Fonterra's announcement last week of a 15c reduction in its payout forecast for the 2011-12 season might not be the only revision for the season, Federated Farmers dairy chairman Willy Leferink says.
The dairy co-operative announced a revised payout forecast of $6.75-$6.85 for a farmer with full shares. It comprised a lower farmgate milk price of $6.35 per kg of milk solids, down from $6.50.
The downward revision demonstrated the trade-exposed nature of the country's primary industries, Mr Leferink said in a statement.
"I don't think there are many farmers who were not expecting a downwards revision. We had indications from the globalDairyTrade auction that prices have been drifting south.
"Most economic forecasters also expect commodity prices will ease over 2012.
"It's fair to say the international picture is more than a little choppy, especially with China revising its gross domestic product forecast downwards."
That was the reality New Zealand's primary exporters had to deal with.
"We're completely trade-exposed and it's a fact of life for us. Times can be good, but we also know from the 2008/9 season, they can be pretty hard too."
Farming returns could sometimes resemble an oscillograph and that was why corporate investors looking for predictable returns tended to find farming difficult.
"While the primary industries are generally growing, overall sector debt levels aren't.
"Many farmers have heeded our advice to run conservative budgets focused on reducing debt," he said.
Farmers were increasingly anxious over the New Zealand dollar "defying gravity".
"While soft commodities are correcting, our dollar ought to be doing the same but isn't. While good growing conditions have helped us put in a blinder of a season, a high dollar could well skim the cream," he said.
In the ASB commodities weekly, Prof William Bailey, from the Department of Agriculture at Western Illinois University, said the reduction was not a huge surprise, given the strengthening New Zealand dollar and the slide in world milk prices.
Milk output for New Zealand seemed to be getting bigger and bigger, with the excellent weather causing a strong end to the season.
Some analysts saw an increase in production of potentially 10% above last year's level, he said.