Fonterra's milk expenditure for next season could surge more than $8 per kilogram/milk solids, implying a likely $2.5 billion jab for the economy.

Today, Fonterra declared an estimate payment of $6.60 kg/MS for the 2010/11 season and says that it could finish up "well over" $8 that would be a record price for their 10,500 farmer-shareholders.

The opening cost is a 50 cent rise on the predicted price for the present season (2009/10) and TVNZ Business Editor, Corin Dann says that it signifies a noteworthy increase to the economy.

Corin says, "This opening price will mean an initial payout of between $400-500 million. Lifting the forecast by 50 cents gives dairy farmers a strong degree of certainty for the next 12 months about what they will be earning".

Fonterra Chairman, Sir Henry van der Heyden says that if worldwide dairy prices and foreign exchange rates cling to present levels for majority of the upcoming year, then it is likely that the 2010/11 payment could be more than $8.00.

Dann indicates that Fonterra usually begins from a very careful price point and this estimate price will be modified all through the season.

Market Analyst, Peter McIntyre from Craigs Investment Partners says that a price more than $8 would be "massive" news for New Zealand and forecasts a $2.5 billion increase to the economy.