Westland Milk has raised its forecast payout for the season to between $7.90 - $8.30 per kilo of milk solids.
But the company says the season still has a long way to go and that the New Zealand dollar is showing considerable volatility.
However, chief executive Rod Quin says international demand is looking strong. He says Westland's well placed to capitalise on the pending consolidation of the infant milk formula market in China.
Westland has about 350 farmers on the South Island's West Coast and in Canterbury.