Farmers say the Fonterra price will not make up for last year's losses.

Northland dairy farmers have greeted a Fonterra opening forecast payout for next season of $6.90-$7.10 a kilogram of milk solids as ardently as they hailed drought-breaking rain.

And diagnosis for the new dairy season, which starts on Tuesday, could be even more prosperous with Fonterra Chairman Sir Henry van der Heyden yesterday, saying the payout could be well over $8/kg if international dairy prices and foreign exchange rates held for most of the coming year.

That would top the 2007/08 season when Fonterra gave its suppliers $7.66 from a total record payout of $7.90/kg and the 1000 Northland dairy farms producing an average 100,000kg earned a whopping $760 million for the region.

"The reality is that we are seeing big swings in foreign currencies and turmoil in some economies," he said. "These factors could have a big impact on demand for dairy products and the prices we ultimately realize”, said Sir Henry.

Fonterra is on track to achieve a payout before retentions of $6.50-$6.60/kg.

Milk price of $6.60/kg and forecast distributable profit of 30-50c a share, has been an opening prediction for the new season.

Retentions will be made from this distributable earnings, in line with Fonterra's dividend policy of retain, 25-35 per cent of total distributable profit in the co-operative.

Former Fonterra director Richard Booth, of Titoki, said the $6.90-$7.10 forecast would encourage farmers with production cut by the drought and finances reduced by the need to buy supplementary feed.