Fonterra farmers waiting on their second-highest payout in the season just ending have been told their average cheque for next season could rocket to record heights - about $1 million each.

It follows on Fonterra’s announcement Tuesday that their payout could surge to $8/kg of milksolids or more, beating the co-op’s current record payout of $7.90/kg in the 2008 season.

The new season's opening forecast payout for the 2011 season of $7.10 comes from a milk price of $6.60 a kg milksolids -up 50c on the forecast - and a dividend of up to 50c for each share.

Fonterra CEO Andrew Ferrier said if international dairy prices and foreign exchange rates hold at the current levels, the 2011 payout could be well over $8/kg.

Fonterra says their  forecast was based on strong growth in dairy consumption and demand from China, the rest of Asia, the Middle East and North Africa.

ASB economist Chris Tennent-Brown and other market analysts predict the new milk price forecast could pump $1 billion extra into the economy.

Federated Farmers dairy chairman Lachlan McKenzie is advising farmers to budget conservatively and use any windfall to retire debt, especially expensive short-term facilities.

Meantime, Fonterra Shareholders' Council chairman Blue Read said the latest Fonterra strong forecast cash flow comes at the right time for struggling farmers.