Bay of Plenty dairy farmers are bracing themselves for what could be a further fall in Fonterra's pay-out, following a drop in the latest Global Dairy Trade auction prices.

Steve Bailey, Bay of Plenty Federated Farmer's dairy chairperson, says the 1.1 per cent drop is 'not ideal” and farmers will be hoping Fonterra doesn't decrease this month's pay-out forecast.

A drop in the latest Global Dairy Trade auction prices could spell trouble for Bay of Plenty farmers.

'Farmers are realists and know the writing is on the wall as other dairy companies have already dropped their forecasts,” says Steve, who farms at Te Puke.

'What we're all hoping for now is a good summer. A hard summer and low pay out would be very tough.”

He's urging farmers to continue with good farming practices to maximise the performance of their herds, making savings where they can and avoiding waste.

'Most of all, don't bottle up your concerns,” he adds.

'Talk to other farmers - you never know they may have good ideas which can save you money and help you get through.”

Talking to banks is also important. Steve says; 'Banks are investing not in the land but in the people who farm it and when farmers do well, banks do well.”

One encouraging aspect of the latest Global Dairy Trade auction result is that some products actually increased in value.

'We are affected by what is happening off-shore but it's to be hoped overall prices might go back up,” he says.

'The drop in the NZ$ and fuel prices may well help farmers and beef prices are holding up which is another positive.”

Global Dairy Trade is an auction platform for internationally-traded commodity dairy products.

It was established in 2008 to provide a reliable, transparent price discovery platform for globally traded dairy commodities.

The auctions occur twice a month, and any organisation can buy or sell dairy products provided they are qualified as a bidder or seller.

At the auction on December 2, 177 bidders took part and 39,273 metric tonnes of milk products were sold.