While a $4.70 payout would strip more than $6 billion from the economy, compared with last year's $8.40 payout, to achieve $4.70 the global dairy auctions must have a 40%-plus recovery in the present $US2200 ($NZ2806) per tonne whole milk powder price.
The extent of the yet-to-be-set dividend, which is paid on top of the $4.70 farmgate price, was predicted by Fonterra in an unchanged range of between 25c and 35c per share.
The dividend could yet become an important offset to the 10,500 dairy farmers facing plunging incomes.
Forsyth Barr broker Andrew Rooney said Fonterra's downgraded $4.70 ''still assumes a significant percentage rebound in global dairy prices for the remainder of the year''.
Waning Chinese demand, sanctions against Russia and increasing global milk production have compounded to weaken dairy prices.
Mr Rooney cautioned there was still some downside, negative risk involved in Fonterra's forecast.
''Fonterra has presented its forecast WHP [whole milk powder] price path, which includes a more than 45% increase from the [current] spot price to May 2015 pricing,'' he said.
The whole milk powder price is $US2200 at present, with Mr Rooney expecting the May 2015 price to be about $US3250 ($NZ4156).
He said gaining 45% on prices was ''heavily reliant'' on Chinese importers ''significantly entering the market'', and remained ''uncertain'', given Chinese inventory levels were at present still above average.
Craigs Investment Partners broker Peter McIntyre said the persistent pricing downturn was pushing out the expected whole milk powder recovery, to $US3500 ($NZ4476), from March next year to July.
However, given a strong stream of returns from its multiple products in the year to date, and an expected pricing recovery, Mr McIntyre expected Fonterra would review the dividend when it delivered its first half-year trading result in March.
''Lifting the dividend would be a transparent mechanism for the [Fonterra] board to support farmer cashflows, provided it is supported by the earnings base,'' he said.
Last year's dividend was 10c and two previous years respectively 32c and 30c.
While $4.70 equated to a $6.2 billion economic loss, compared with last year's $8.40 payout, Fonterra's downgrade, by 60c from $5.30 to $4.70, equated to a $1 billion decline.
Mr Rooney noted that the $1 billion decline meant the listed Fonterra Shareholder Fund units, which are linked to branded dairy products made by Fonterra, would be more profitable, the raw materials being cheaper.
