New Zealand's dairy giant Fonterra reduced its milk volume forecast for the 2014/15 season as dry weather impacted production, a released from the company revealed Thursday.

The 2014/15 milk volume forecast was lowered to 1,532 million KgMS.

The latest forecast was 3.3 percent less than the milk volume of 1,584 million kgMS in the last season, which was equal to the previous forecast in December.

Miles Hurrell, Group Director Co-operative Affairs at Fonterra, noted that daily milk production was now 6.1 per cent lower than at the same time last season, as farmers appear to be using more traditional practices to manage their farm businesses with the low payout forecast.

Fonterra said that all the current sales commitments can be met.

However, the quantity of products offered on the GlobalDiaryTtrade auction and via direct sales will be reduced in the light of the reduced milk volume forecast, it said.

RTTNews