Fonterra said it aimed to pay its cash-strapped Australian farmers a A$5.70/kg to A$6.10/kg milk price for the 2017/8 season and would reimburse suppliers interest paid for last year's support loans after discussions with its key supplier, Bonlac Milk Supply, in Melbourne.
The co-operative said its forecast full year farmgate milk price range of A$5.30 to A$5.70 per kg of milk solids, would include additional payment of 40c per kg of milksolids.
Fonterra Australia managing director René Dedoncker said the business was in a stronger position, which underpinned its forecast for the year.
"Providing Fonterra's forecast full year price range now is aimed at giving our farmers guidance so that they can plan for next season with confidence," he said in a statement.
"We said that we would consider Murray Goulburn's recent announcements including the decision to forgive its Milk Supply Support Package. We've consulted with the Bonlac Supply Company on the best way to respond to our suppliers," he said.