New Zealand's giant dairy firm Fonterra announced on Friday that company payout for the 2010/11 season would be from $NZ6.90 to $NZ7.10 per kilogram of milk solids, adding that international prices for its products should remain steady on the forecasted period.

Company chief executive Andrew Ferrier said that it was too early for the season to actually appreciate the company's outlook though he added that the situation has been relatively firm so far.

Mr Ferrier cited some challenging points for the industry where the strong New Zealand dollar, the falling dairy prices and a slow down in global economic growth could all conspire in snagging the sector's season performance.

He added that the extreme weather conditions currently felt in Europe, China, Pakistan and Russia has so far brought considerable impact on global agricultural output though he admitted that the dairy industry is still assessing for possible spill-over.

Mr Ferrier said that the Russian wheat export would be able to push up grain feeds prices and subsequently drag upwards dairy prices.

He said that for now, the company is projecting an unchanged milk price of $6.60 per kilogram of milk solids, with a corresponding firm profit tax of 30 cents to 50 cents per security.

Fonterra chairman Sir Henry van der Heyden maintained that international prices should improved later this year following the declines seen in the past few months, prompting the company board to pause on its present milk price forecast.

The dairy company conceded that payout could turn out a bit lower from current projection should commodity pricing and currency rates remain at their present levels for the rest of the season.