Fonterra has confirmed its 2012 forecast seasonal milk solid payment is likely to the lower than this year’s record payout.

In a statement issued Friday, the company said the operating season forecast is $7.15 to $7.25, before retentions, compared with the 2011 payout forecast of $8 to $8.10 per kilogram.

Chairman Sir Henry Van der Hayden said the Fonterra Board had reconfirmed the forecast against a background of significant volatility in global markets and foreign exchange rates.

But he said the recent fall in food commodity prices had been largely anticipated by Fonterra when announcing its opening forecast for 2011/2012.

The announcement has come as a relief to Fonterra’s shareholder dairy farmers.

Robin Barkla, Federated Farmers Dairy vice chairperson says that ‘after a hard winter and towards the end of calving, dairy farmers can now sit down and crack a smile’.