The Finance Minister says there will be no bail out of dairy farmers if their payout drops further.

Falling dairy prices have seen banks drop their forecast payout expectation to as low as $4.10 per kilogramme of milk solids.

Fonterra's forecast price is $4.60.

Mr English believes farmers can weather the storm.

"There wouldn't be any Government assistance if the payout came down," he said.

"And it would effect the economy, I mean it's just less income for New Zealand, less tax for the Government for instance, and less spent in our service industries, but I think the dairy industry could handle that."