The dairy co-operative yesterday announced a revised payout forecast of $6.75-$6.85 for a farmer with full shares.
It comprised a lower farmgate milk price of $6.35kg ms, down from $6.50. The distributable profit range forecast of 40c-50c per share remained unchanged.
The lower forecast reflected declining commodity prices and a stronger New Zealand dollar, Fonterra chairman Sir Henry van der Heyden said.
There had been price declines in five out of the last six GlobalDairyTrade trading events.
Overall, the GDT-trade weighted index was down 5.7% since December 13 last year, when the forecast of $6.50kg ms was announced.
Otago Federated Farmers dairy chairman David Wilson was not surprised about the reduction, saying with commodity prices trending downwards and the high dollar "everything's working against us a little bit".
It was expected that it would show up on the payout eventually and it was "probably lucky" that it had been held to such a small drop, Mr Wilson said.
The trends indicated stronger global production continuing, Fonterra chief executive Theo Spierings said.
Although there had been a strong start to the season in New Zealand, with record milk flows, there were also higher milk production levels in the United States and Europe.
International milk powder demand appeared robust which should help offset the impact of the stronger milk supply growth.
"In the past few weeks, global markets seem to be reacting to the ongoing economic difficulties in Greece, the potential for conflict in the Middle East and China's reduced growth forecast.
These events appear to be having a negative influence on most commodity prices.
"We think dairy commodity prices are likely to remain under some pressure through to mid-2012," Mr Spierings said.
Last October, Fonterra had dropped its payout forecast for the 2011-12 season by 45c, blaming a continued softness in commodity prices and a stronger New Zealand dollar.
In December, when a 20c increase in the forecast was announced, the co-operative said it reflected a modest recovery in global dairy commodity prices.
In ASB's commodities weekly last week, Prof William Bailey, of the department of agriculture at Western Illinois University, said US cheese production in January was 3% higher than in the corresponding month last year, butter production was almost 9% higher and skim milk powder production was up almost 25%.
Fonterra will announce its interim results and dividend on March 29.
