Drought may cost farms $30m

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Fonterra's Northland dairy farmers stand to lose more than $30 million in payout this season because of drought.

Milk production from the region, already falling each year because of land sales for lifestyle and coastal home development, is expected to be down at least 6 per cent against budget.

Northland is now expected to contribute 6.5 per cent of Fonterra's nationwide milk solids for the 2009-10 season. Last year it contributed 6.8 per cent and the previous year, 7.5 per cent, Fonterra said.

Commercial general manager Jason Minkhorst said recent rain was not sufficient to be considered drought-breaking.

Fonterra expects milk collection to be similar to last year's at 1.3 billion kilograms/milksolids – or about 15 billion litres of milk.

- © Fairfax NZ News