Farmers happy with windfall, now they want rainfall

Taranaki dairy farmers happy about Fonterra's announcement of a 35-cent lift in forecast payout this season are now looking for rain to go with it.

The rise in the forecast milk price sets a record $8.65 kilogram of milksolids (MS). The addition of a 10c dividend means fully shared-up farmers will receive $8.75 kgMS.

The 35c increase will pump an extra $60 million into Taranaki's economy and put an extra $35,000 in the pocket of the average Taranaki farmer producing 100,000kg MS.

Paul Fabish, who milks 310 cows on a high-altitude farm at Tariki, said his production was 9.5 per cent ahead for the season and 15 per cent ahead for the month.

"I'm pretty happy. It's positive; it'll allow us to do some deferred maintenance and pay off some debt. Even though we're at an altitude of 340m, it's starting to dry out so rain to go with this new payout would be perfect."

Te Kiri dairy farmer Ian Armstrong said he hadn't expected the forecast payout to rise. "I'm very happy - who wouldn't be?"

But with soil moisture levels on his 316ha farm below 20 per cent, he was now looking for rain.

Waitotara 50/50 sharemilker Kent Western-Arnold, in his first season sharemilking 1250 cows on a 390ha farm with partner Nicola Todd, said he was happy with the increase, particularly after the tough 2012-13 season. "It's a dream first season for us, although it's starting to get dry. But with the spring we had, we've used a lot less palm kernel than we budgeted for and there's plenty of silage in the stack. I'd like to see some rain, but we're in a comfortable position."

The couple are on target to produce 480,000kg MS.

Steve Nicholas, of Kaponga, said the extra money was an opportunity for farmers to invest in farm maintenance and repay debt. The season had been good so far, with production on his farm where he milks 360 cows a little bit ahead of last season. The extra money would allow him to spend more on supplementary feed to maintain production if the season became dry.

Mr Nicholas said the increase would have positive flow-on effectsaround Taranaki.

Another farmer described the increase as a bonus.

"Take it while it's there because I don't expect the payout to be as high next season," she said.

Venture Taranaki chief executive Stuart Trundle welcomed the increase.

"Coming on the back of a year where production levels were hit by a significant drought, this is positive news for our entire regional economy, particularly those companies with strong links to the dairy sector."

About half of milk production revenue was traditionally reinvested into the farm and operational costs, he said.

Fonterra Shareholders' Council member Noel Caskey, of Stratford, said it was wonderful news for farmers and for the country.

It would help farmers reduce debt, meet increasing demands for compliance and carry out deferred maintenance.

"Hopefully everyone in the industry will get a slice of the cake and it will be good for rural communities as well."

Fellow councillor Kevin Turnbull, of Egmont Village, predicted the extra money would be spent on farm development.

Taranaki Daily News