Spend milk boost wisely, farmers told

Fonterra’s record-breaking payout is a welcome relief to Waikato farmers under pressure from the drought-like conditions that have gripped the region.

The co-operative yesterday increased its forecast payout for the 2013-14 season to $8.65/kg milk solids – an estimated $132.4 million for the Waikato economy and an additional estimated $37,306 for the average Waikato dairy farmer, milking 323 cows at 330kg milk solids per cow.

Morrinsville dairy farmer Keith Holmes said the forecast was a great morale boost given the dry conditions he and his neighbouring farmers faced.

The lift would help farmers psychologically and mean a lot for regional towns where farmer spending had stopped because of the dry conditions.

Holmes said what had begin as ‘‘an extremely optimistic season’’ had lost momentum.

Waikato farmers made a lot of supplementary feed during a good early spring and summer. Many were now getting to the end of that feed.

Fonterra also increased its advance rate schedule of monthly payments to farmer shareholders.

Payments from March through to June would be 25 cents/kg milk solids higher than the previously published schedule – ‘‘a really good cushion’’ that would let farmers keep milking their cows a little longer into the season.

Holmes said many farmers would not be able to capitalise on the high payout because production was tailing off as a result of the the dry conditions.

Onhinewai farmer Neil Bateup said the lift was a pleasant surprise and the advance rate would give farmers options for the remainder of the season.

‘‘The payout’s very good this year obviously and it’s good to see that money coming through and farmers will be able to take that into account when they are budgeting their feed and feed purchases going forward and their drying off dates.’’

Waikato Federated Farmers provincial president James Houghton said the extra money would create a ‘‘positive vibe’’ in the community.

Federated Farmers dairy chairman Willy Leferink said the lift in the forecast was fantastic news.

‘‘Milk is a super food, it’s in high demand and we just can’t produce enough of it and so the price goes up.’’

But Leferink said farmers needed to remain prudent.

‘‘We seriously caution farmers from counting their milk solids when sitting at the table, there’s plenty of time for counting when the season’s done.’’

He anticipated other dairy companies would revise their payout forecasts to near match, if not better, Fonterra.