Whole milk powder - the biggest influence on the co-op's milk price - backed up a 7 per cent gain in the previous event with a further 2.3 per cent rise to an average US$3458 a tonne.
Fonterra chief executive Miles Hurrell says the lift in the 2020/21 forecast range was the result of strong demand for dairy demonstrated by the continued increase in GDT prices since the co-op last revised its milk price in December.
Listen to Jamie Mackay interview Fonterra chief executive Miles Hurrell on The Country below:
"In particular, we've seen strong demand from China and Southeast Asia for whole milk powder and skim milk powder, which are key drivers of the milk price," Hurrell said in a statement.
At the revised price, the co-op would contribute almost $11 billion to the New Zealand economy through milk price payments this year, he said.
"Now that we're through the peak of the 2021 milking season, the impact of any changes in global market dynamics is reducing and our view of the season is firming up."
However, the co-op was continuing to keep a close eye on a number of factors, including New Zealand weather conditions, expected challenges from further waves of Covid-19 and increasing milk production in the Northern Hemisphere.
Fonterra is due to announce its first half results on March 17.
