Taranaki dairy farmers have given Fonterra's two payout announcements a cautious thumbs-up.
Taranaki Federated Farmers president Harvey Leach is pleased with the dairy giant's two payout announcements in the wake of last season's drought.
"If you average the two payouts [a forecast $8.30 per kilogram milksolids for 2013-14 and $5.84 for 2012-13], it looks pretty good.
"You can only receive what the market delivers. It's what we do with what we get that counts."
While the forecast payout was good, he said farmers also wanted good production and the season was going well so far.
Inglewood's Peter Ayles said the forecast payout would compensate for last season's lost production.
"It'll make up for what we missed out on last season. It's pleasing, but it doesn't mean we're in boom times. As long as we don't get another drought, I'll be happy."
Mr Ayles said farmers' costs were constantly rising. "So the money will soon be gobbled up."
His herd's production was nine per cent ahead of last season's figures at this time of year.
He predicted farmers would use the money to reduce debt or reinvest to keep their farms compliant.
Noel Caskey, of Stratford, who sits on the Fonterra Shareholders' Council, said the two announcements were great for the industry and for the country.
"They'll have a positive impact on rural communities throughout New Zealand. But farmers have to realise volatility is still there in our industry.
"Many farmers are still in a tight position and they'll be trying to catch up after the drought, then they'll repay debt.
"But they'll be in a buoyant mood on the back of good climatic conditions this spring," he said.
- © Fairfax NZ News
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