The dairy giant said the total payout available to farmers, including earnings per share, was now forecast to be NZ$5.75 to NZ$5.85 before retentions.
The lift is the second by Fonterra in recent weeks. In late August it lifted the payout to NZ$4.75 per kg.
The news will be welcomed by beleaguered dairy farmers. Until recently, dairy was the backbone of New Zealand's economy, representing around 25 percent of exports. But dairy prices have dropped sharply from their record highs in 2013, due to China's economic slowdown and global oversupply.
While Fonterra Chairman John Wilson said global dairy prices had improved as production in key dairying regions is reducing "the high NZD/USD exchange rate is offsetting some of these gains.
"There is still volatility in global dairy markets and we will continue to keep our forecast updated for our farmers over the coming months," said Wilson. ($1 = 1.3672 New Zealand dollars)
