Fonterra is to review its payout forecast for the upcoming season as the rising kiwi dollar and falling dairy prices put pressure on its margins.

In May, the co-op forecast a payout before dividends of $6.60/kg of milk solids – well up on last season.

But rates have plunged since then, prices on its latest globalDairyTrade auction on Tuesday fell an average 8.3%.

This followed a 13.7% drop in July.

ASB rural economist James Shortall says a payout drop could have a wider impact on the economy.

"Some of these commodity prices have fallen by about 25% just over the past four months. Since they last made their recent announcement the currency has also moved, so theres no surprises that they will be reviewing the payout."

Fonterra’s final payout before dividends for the 2009/10 season was $6.10.