Prices for all products were higher and the overall prices gained 4.5%; the key milk powder price being up 3.2%, its highest level since mid-2014.
Westpac's acting chief economist Michael Gordon said since Fonterra's last update, prices in the fortnightly GlobalDairyTrade auctions, particularly for whole milk powder, had increased "significantly".
Westpac was keeping its forecast at $5.80/kg, but with more likelihood of raising it than lowering it.
Tighter domestic supply, following very wet weather in the Waikato and other parts of the North Island was a key factor supporting prices, with Fonterra reducing the volume of product available for the auction platform, Mr Gordon said.
Fonterra chairman John Wilson said the forecast lift reflected global pricing rises since September, following the gradual rebalancing of global supply and demand.
"We've seen falling production in the major exporting regions, particularly Europe and Australia, and an unprecedented decline in New Zealand milk supply due to wetter-than-normal spring conditions across most regions," he said.
ANZ rural economist Con Williams said the 75c increase was not a deferred payment.
He said the increased forecast assumed some slight price moderation for the 40% of product yet to be sold, meaning Fonterra was being conservative.
"If prices maintain their current level there could be further upside of 20c-30c per kilogram of milk solids," he said.
