Fonterra has lifted its payout forecast for the 2014 season for a third time to a record $8.30 per kg of milk solids, taking the total expected cash payout to $8.62.
The increase came just ahead of the dairy giant releasing its results for the 12 months to the end May later on Wednesday, in which it is expected to confirm this year's payout at a total $6.12 per kg of milk solids.
Fonterra chairman John Wilson said the increase reflected continuing strong international prices for dairy products, particularly for whole milk powder, driven by robust demand from Asia - especially China.
Bank of New Zealand economist Doug Steel said Fonterra's first forecast for the current season in May was just $7 per kg of milk solids.
"The dairy boom just gets bigger," he said.
He did not believe Fonterra would have to revise the payout forecast down because "a lot of the prices are set forward so that a lot of the milk that hasn't even been made yet has essentially been sold or at least contracted at a price".
"So it would take a fairly big move in prices against expectations for it to not be met, I think," Mr Steel said.
"But you never say never in the commodities game. What we do know at the moment is the outlook is very positive and, even if it was to come back, it's still going to be a very big boost to the economy."
The jump in payout from this season to next was "truly enormous" and equivalent to about $5 billion for the economy, he said.
"It's on the scale of more than 2% of the national economy in terms of cash coming in. That's going to drive growth (and) it's going to be a big plus for the external accounts as well."
Fonterra chief executive Theo Spierings said the business still faced headwinds and he expected earnings for the six months ending November this year would be lower than last year's first-half profit.
