Fonterra has increased its farmgate milk price forecast for the 2017/8 to $6.75 per kilogram of milksolids from its previous forcast of $6.50/kg.
The co-operative - in its first earnigs guidance for the new financial year - announced a forecast earnings per share range of 45 to 55 cents, making the forecast total available payout to farmers in the 2017/2018 season $7.20 to $7.30, before retentions.
Fonterra said guidance on dividend payments would be provided as part of its next interim financial financial results.
Chairman John Wilson said the revised milk price forecast reflected the ongoing rebalancing of supply and demand in global dairy markets.
"We are seeing growing confidence on-farm across the country and, with global demand for dairy strengthening, the signs are for a good start to the season for our farmers and their rural communities although following a challenging period of very wet conditions for some of our farmers," Wilson said in a statement.