Bad weather has lowered Fonterra's milk production, with supply down 8 percent in January compared with the year before.
The co-operative's latest monthly dairy update showed that national milk production for the eight months to the end of January was down 2 percent.
North Island production dropped 3 percent.
The company report posted on the stock exchange showed that although rain in late December and early January helped in some regions, other regions were heavily impacted by low soil moisture levels and difficult pasture growth.
This reduced the overall collection volumes for January, and also for the eight months of the production year until the end of January.
This is expected to reduce overall supplies of milk to the market and put upward pressure on prices.
The problem was reflected in export levels as well.
Exports for the 12 months to December were down three percent on the previous comparable period.
Exports declined across the majority of categories except fluid and fresh dairy and infant formula, which rose.
China was the bright spot in the export portfolio.