The privately-owned company has told its 650-plus suppliers that, as it warned last month, falling commodity prices and currency pressure had prompted the move.
In a newsletter to farmers this week OCD chief executive Steve Koekemoer said the company still believed that demand would lead to a stabilisation of prices, with upside being more likely than downside.
It was still very early in the season, he said.
The reduced forecast was still historically high and OCD remained confident it would offer a very competitive milk price this season and beyond.
The company confirmed its third settlement payment would be $8.15 for last season, to be paid in full on August 28.
The settlement brought OCD’s final payout for last season to a record $8.41/kg, Koekemoer said.
Industry milk price-setter Fonterra has cut its milk price forecast for this season from $7 to $6 in response to softening international prices and the resilience of the Kiwi dollar.
Economists said the new $6 milk price could also be under threat after an 8.4% plunge in the average price on this week’s GlobalDairyTrade auction, considered a barometer of world prices.
That came just a week after Fonterra cut its forecast price, and took dairy prices to their lowest level in two years.
