Wellington, May 27 NZPA - Fonterra says it expects to pay its 10,700 farmers an average of $4.55/kg of milksolids next season.

The opening forecast for the 2010 payout is a further slide from this season's $5.20/kg, with Fonterra blaming low international commodity prices.

Fonterra farmers received a record $7.90 in the 2008 season, averaging over $800,000 per farmer.

Fonterra chairman Henry van der Heyden said the company had been looking at forecast over $5/kg for 2010 when New Zealand dollar's exchange rate against the US dollar was US50c, but now it was calculating on an average exchange rate of US59c.

"We're now working with a dollar that's 10c higher," he said.

"And, just this week -- at a time when we've been seeing some tentative signs of recovery in the global dairy market -- the US Government has announced export subsidies for their farmers, which is bad news for our farmers," he said.

The co-operative has set a fair value share price for 2009-10 at $4.52, the mid-point of the valuation range provided by an independent valuer, Duff & Phelps.

The price is 5c higher than the estimate in December but $1.05 lower than the $5.57 price for 2009.

The company blamed this on major changes in global equity and financial markets over the past year.

NZPA