Fonterra is predicting world dairy prices are likely to fall further, before lifting again in the middle of next year.
But it is sticking to its view that commodity prices will not reach the giddy heights they climbed to last year, and this season's milk payments to farmers will reflect that.
The co-operative says the price of whole milk powder has dropped from a peak last year of almost $5,000 a tonne to just over $3,000 dollars a tonne, and skim milk is fetching less than that.
Fonterra will be reviewing its market and payout forecasts at its board meeting in two weeks.
The company's milk payment for the past season, still to be finalised, stands at $7.90 per kilo of milk solids.
The opening forecast for the current season is $7 per kilo of milk solids.
Fonterra chief executive Andrew Ferrier says the company will know by the time its directors meet whether that forecast will change,