Economists expect Fonterra to stick with its $4.70 per kg farm gate milk price forecast for 2014/15 when it reports its first-half result tomorrow.
A farmgate price that low will not adequately cover the cost of production for many farmers, but economists said there was room for a partial offset through Fonterra's dividend.
ASB Bank rural economist Nathan Penny said the bank had revised down its $5 a kg forecast to match Fonterra's but that there was "upside risk" to Fonterra's dividend of 25c to 35c per share.
"We expect that Fonterra will maintain its milk price forecast at $4.70/kg of milk solids, with any risk towards a downgrade," Penny said. "In contrast, the dividend forecast has some scope to head higher on the basis of lower business costs."
Further out, ASB has maintained its $6.50/kg forecast for 2015/16.
Weighing on Fonterra's farmgate milk price will be the New Zealand dollar, which - contrary to predictions - has remained firm against a faltering US dollar.
The production outlook is not as bad as first feared, which went some way towards explaining the 8.8 per cent fall in prices at the last GlobalDairyTrade auction.
ANZ's Con Williams said GDT prices continued to weaken into the end of the season, but not by much given the near 90 per cent of this season's product already sold at around the $4.65/kg mark.
The milk price reference products - milk powders, butter, anhydrous milkfat and buttermilk powder - are a key input cost into Fonterra's other consumer and ingredient businesses.
In theory, lower prices for these products imply higher margins for the non-reference products.
"The other aspect that has us a little cautious is that many of Fonterra's international rivals appear to have had a tough 2014, implying a competitive marketplace and difficult trading conditions, especially within China," Williams said.
Fonterra chief executive Theo Spierings is expected to provide a full update tomorrow.