Economists generally expect New Zealand farmgate milk prices to level out at around $6 per kg of milksolids for the remainder of this season and the next.
At that level, farmgate milk prices would be above Dairy NZ's break-even point of $5.05kg/MS and would likely result in farmers paying down debt incurred over the previous two seasons, when the milk price ducked below break-even, economists said.
Rabobank senior analyst Michael Harvey said the bank does not expect to see much upside Fonterra's forecast of $6kg/MS for the current season, which ends on May 31.
"It's a matter of prices remaining range-bound for the rest of the year," Harvey said.
"We have had a decent recovery in prices and there might be a little bit of upside from here, but not much."
Westpac expects to see some "upside risk" to its forecast for 2016/17 of $5.90kg/MS, and the bank has a forecast of $6.10kg/MS for next season.