He's confident there won't be another downgrade this season following Fonterra's 15c cut to its milk price forecast earlier this month.
That puts the combined dividend and milk forecast at $6.75 - $6.85/kgMS, dividend profit forecast being maintained at 40-50c/kgMS.
The co-op blamed the declining commodity prices and a stronger New Zealand dollar, having issued an opening forecast range $7.15-$7.25/kgMS before retentions last June.
"The foreign exchange's impact on this year's payout is more or less done," Steel told Rural News.
"[But] next year's forecast payout will be lower due to the delayed effects of the dollar."
Fonterra made no mention of the outlook for 2012/13 when announcing its revision. A forecast for the coming season is usually made in late May.
Steel says there was "some surprise" at Fonterra's revision of this season's figure. He'd expected the co-op to hold onto the forecast payout this season as prices had only dropped slightly.
Steel believes global dairy prices will remain "relatively stable" despite small declines in recent months. Dairy demand and supply are both growing.
In the last few months the US has ramped up milk production. With a low dollar, its dairy products are becoming competitive in the global market, weighing down prices. But at the same time, demand in China, Middle East and Asia remains strong, he says.
"While we have a balance between supply and demand, it's just tilting slightly towards the softer side."
There have been some slight declines in recent GlobalDairyTrade events but prices are still in what's been a tight trading range of 5% for some time, he adds.
"So that's relatively stable."
Announcing the payout revision, Fonterra chief executive Theo Spierings said prices would "remain under some pressure through to mid-2012," but made no reference to the 2012/3 season.
Demand would remain strong but economic and political uncertainty is a threat to that.
Meanwhile trends indicate stronger global production continuing in 2012.
"While we have had a strong start to the season in New Zealand, with record milk flows, we are also seeing higher milk production levels in the US and Europe. International milk powder demand, however, currently appears robust which should help offset the impact of the stronger milk supply growth.
"In the past few weeks, global markets seem to be reacting to the ongoing economic difficulties in Greece, the potential for conflict in the Middle East and China's reduced growth forecast. These events appear to be having a negative influence on most commodity prices." Further comment from Fonterra is likely when it announces its half year results next week.
