He said farmers would not be surprised at the news.
"There will be some hard times for farmers, especially the ones that haven't seen this coming ... it's not going to be a pretty time."
Mr Wills said it would be a matter of reviewing budgets and working with bank managers to ride out the tough times.
He said those who were new to the industry and hadn't had the benefit of last season's big payout were likely to be among the hardest hit.
He said long-term farming was still a good viable business and many farmers were used to ups and downs.
"The industry is now at a point where we've got used to living with the volatility."
Perrin Ag consultant Byron Bird said he did not think the announcement would have come as a surprise to farmers, but it was still likely to hurt them.
"It's 40 per cent lower than this time last year. There will be a lot hurting."
Rotorua had a huge dairy community and with farmers generating less money there would be less flowing through the community, Mr Bird said.
Rotorua Chamber of Commerce chief executive Darrin Walsh said any downturn in dairy had an impact on Rotorua, but he was hopeful that there was enough happening in the rest of the economy to sustain the downturn.
"It won't just impact on the farmers. If they're earning less, then it means they're spending less. The economy in Rotorua is just starting to pick up but any little blips like this that take people out of the spending cycle do have an effect. Hopefully, it is just a blip."