Wellington, May 25 NZPA - Fonterra says its 10,500 farmers may get a payout of over $8/kg milksolids next season, adding an average payout of nearly a million dollars per farmer.

Fonterra today announced an opening forecast payout -- before retentions -- for the 2010-2011 season of $6.90-$7.10.

It comprises a forecast milk price of $6.60/kg milksolids, up 50c on this season's latest forecast, and forecast dividends of 30c-50c cents a share.

Fonterra chairman Sir Henry van der Heyden said the board will issue an updated forecast will follow the group's annual budgeting process in late July.

Based on these forecasts and targets, Fonterra farmer-shareholders on average would receive a total payout before retentions of $6.90-$7.10 for each kilogram of milksolids backed by a Fonterra share.

"If international dairy prices and foreign exchange rates were to hold to current levels for most of the coming year, then it is possible that the 2010/11 payout could be well over $8," he said.

The $6.90-7.10 forecast reflected a cautious outlook given the high degree of volatility in the market.