New Zealand Farming Systems Uruguay says it will produce less milk than expected this year, but its earnings forecast remains unchanged.
In February the company forecast a full year loss of between $7 - $10 million due to has battled drought and the global recession.
However, it expected that annual milk production would be about 80 million litres - 50% more than last year.
In an update, the company says its earning guidance remains unchanged.
But it now says milk production will fall between 10% - 15% below February's forecast, because of a higher number of empty and late calving cows, and underweight calving cows, after last year's drought.
On a positive note, the company says its autumn calving cows are in optimum condition, and are producing more than 16 litres each a day, which is more than expected.
Shares in the company rose 2 cents to 41c on Monday.