This season's decline followed a record 2013-14 season, in both milk production and milk price, and the impact would wipe an estimated $355 million off Otago dairy farm income and $828 million off Southland farmers' income.
Nationally, the drop from last season's $8.40 farmgate milk price equated to a $6.8 billion reduction, figures from DairyNZ show.
Mr Johnston and his wife, Lynne, have been in the dairy industry for 12 years, having traded their respective jobs as a courier driver and hairdresser. The reduced forecast was ''almost a bit of a double-whammy'' alongside a cold and wet season, they said.
Originally from Otago, the couple had farmed in Southland - where they were runners-up for the national farm manager of the year in the New Zealand Dairy Industry Awards in 2008.
They moved back to the region with their four children in June this year, buying into a farm, near Waihola, in an equity partnership.
They were the major shareholder in the farm, which featured a historic landmark - the Ewing Phosphate Company Ltd building - with seven other small investors, and were milking 570 cows.
Mr Johnston (40) had been expecting a reduction in the forecast to about $4.70-$4.80 and was not surprised yesterday.
''There was no secret ... it was coming,'' he said.
They were not highly geared, so were ''fairly comfortable'', but farmers with very high debt levels would be hurting, he said.
Asked about the effect of the reduction on his business, Mr Johnston said: ''The chequebook's been closed, but that's been closed for a bit now.''
They had learned earlier in their career how to cut costs and ''make do''.
''You can't change it [the milk price]. You do the best you can and keep things under control the best you can and look towards next season, trying to improve upon production,'' he said.
He was hoping only one season would be affected and that prices would ''bounce back''.
''If it's more than a season, it's certainly going to impact on people,'' he said.
With southern farmers under stress from both the payout and the weather, he encouraged people to keep an eye on their neighbours.
But Mr Johnston remained optimistic about the future of what he described as a ''fantastic'' industry.
Before moving to Clarendon, the couple had looked at ''a huge range of different things'' but could not walk away from dairy farming as it was ''too good''.
