Fonterra has cut its forecast farmgate milk price by 70 cents per kilogram of milk solids.

The reduced price for the 2014 to 2015 season is now $5.30 per kilogram.

That's down from $6.

Fonterra has also increased and widened the estimated dividend range to 25 to 35 cents.

That amounts to a forecast cash payout of about $5.60.

Chairman John Wilson says the lower farmgate price reflects continuing volatility in the global dairy trade market.