Dairy farmers in the Wanganui region say they will be putting away their cheque books in response to the latest drop in dairy prices.
From a high of $8.40 per kilogram of milksolids last season, the Fonterra payout has dropped to $4.70. Open Country and Westland Milk Products have also dropped their payouts.
The drop will strip $6.6 billion from dairy incomes and 2.7 per cent from New Zealand's gross domestic product, according to Westpac's economists.
For Fordell farmer Gerrard O'Donnell it's the fourth drop in predicted payout, and he said it cost farmers an average of $3.86 to produce a kilo of milk solids.
Waverley dairy farmer Charlie Morrison said that figure was about right, but he had to add an extra 19c per kilo to service debt. Brunswick farmer Brian Doughty said he would be making just 30c per kilo at the $4.70 price.
None were surprised by the lowered forecast, and Mr Morrison predicted it would drop further.
He's been farming for 30 years and seen this cycle many times, but this time the unrest in Russia and production ramping up in the US and Europe were "a bit worrying".
"I don't like what's happening in Russia, and also the way other countries have turned the tap on."
The farmers have to maximise production and minimise spending to stay afloat. They're unlikely to buy new cars or go for expensive holidays and likely to maintain tractors and other machinery rather than replacing it.
Mr Doughty said feed budgets would be critical, to avoid buying expensive feed. Mr Morrison said he would put in less silage, and hope there was no dry spell this year and the price of palm kernel stayed stable.
It will be important for farmers to keep talking to their bank managers and accountants.
"Most banks will allow farmers a year where they pay interest only. Next year is the worry with this payout. Experts are signalling it may go through into next year," Mr O'Donnell said.
People with high debt would be hurting, Mr Doughty said.
"They certainly will not be buying more farms."
Mr O'Donnell thinks he will get through okay, because he has beef cattle to sell and beef prices are currently at record highs.
Rural towns could feel the pinch though. Mr Doughty said every $1 earned on a farm multiplied to $2.70 when circulated in town.
The weather is just as important as prices for a successful year on farm. Mr O'Donnell said the spring and summer rain had been ideal.
"Any rain from now on is a bonus. It will provide more food so we can milk cows for longer."