Rural towns are predicted to suffer as a result of this season's forecast lower milk price.

Fonterra has lowered the milk price one dollar, farmers are now predicted to get six dollars per kilogramme of milk solids.

Federated Farmers Waikato dairy chairman Craig Littin says farmers will tighten on farm budgets in response to this lower pay out.

He says it will put pressure on farmers but the main effects will be felt in rural towns in terms of the amount of money spent.