The dairy co-operative said it had budgeted on a New Zealand-United States exchange rate of about US59c, but it had traded around US65c, wiping 10c a kg of milk solids off the milk price to take its forecast to $4 kg/ms.
But tentative signs of strengthening demand and firming prices for some products have prompted a 10c kg/ms boost, from 45c kg/ms to 55c kg/ms, to the added value, or profit contribution, to the payout.
Chairman Henry van der Heyden warned the impact could have been worse.
"The fall in our milk price forecast would have been larger if we hadn't seen what are some early, and encouraging, signs in international markets."
Chief executive Andrew Ferrier said the higher profit component was due to an improved performance of the consumer business, lower working capital requirements, lower funding costs and close scrutiny of expenditure.
"Our combined consumer businesses are benefiting from shifts into higher-value products, as well as growth in market share in some areas. In addition, acquisitions in Australia are having a positive impact on earnings," he said.
The final payout for last season was still expected to be $5.20 kg/ms and would be confirmed in September.
But the cold, wet winter, slow grass growth and tight farmer cash flow have prompted Fonterra to lower its projected milk volume for next season.
