Fonterra’s milk price forecast announcement on Friday will wipe $5 billion off the country’s GDP and most dairy farmers will make significant losses this year. Leading agri-economist Phil Journeaux says that, even before Friday’s sharp reduction from $8/kg to $7/kg milk solids – modelling had shown that the downturn in global milk prices and soaring cost increases. He says it will also impede the ability of New Zealand’s exports to pay for imports and put a dent in the Government’s tax take. Phil Journeaux says to break even under today’s economic pressures, the average dairy farmer needs $8/kg and Waikato-Bay of Plenty farmers stood to make a loss of $54,000 before the latest announcement but that has now turned into $80,000.