Fonterra said it had confirmed its farmgate milk price at $6.00 per kg of milksolids for the current season.

Combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total pay-out available to farmers in the current season is forecast to be $6.50 to $6.60. before retentions.

Fonterra Chairman John Wilson says the Co-operative is confident that this forecast is at the right level, following the 75 cent rise in its forecast Farmgate Milk Price in November last year.

Market expectations were for a lift in the milk price to $6.25/kg.

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"The global outlook for dairy remains positive. Since November, the global market for commodity dairy products has remained relatively balanced and we expect global prices to continue to hold or gradually increase over the back half of this season - a view shared by most global analysts," Wilson said in a statement.

Fonterra also announced that it would increase the monthly Advance Rate it pays to farmers.

The Advance Rate for February, paid in March, has increased to $4.85 per kg.

The co-operative in its latest Global Dairy Update for February reported that the Co-operative's New Zealand milk collections were showing signs of recovery. Fonterra now expects collections to be down by five per cent, compared with a previous forecast of a 7 per cent decline.