Fonterra has cut down its 2014-15 forecast for milk volume to 1,532 million kilogrammes of milk solids due to dry conditions in some parts of New Zealand.

The revised figure represents a 3.3% drop from a previous forecast of 1,584 million kilogrammes which was the overall collected in the last season.

In addition, daily production is currently 6.1% lower than the same period in 2014, according to Miles Hurrell, Fonterra's director of co-operative affairs.

Hurrell attributes the latest adjustments of Fonterra's forecast to a combination of changing weather conditions and the decline of pasture quality. Earlier in the season, pasture were said to be in excellent conditions, leading to higher milk volumes.

"There also appears to be a reduction in feed supplements, as the economics do not support their widespread use this season," Hurrell added.

Meanwhile, Fonfterra confirmed that it could honor all its present sales commitments.

However, it may also have to decrease the quantity of product delivered through the GlobalDairyTrade auction and direct sales.