Dairy Industry Boom Times As Prices Surge
NEW ZEALAND - Boom times are in full swing for the dairy industry after a record payout forecast which is set to stuff about $1.5 billion more into farmers' wallets.
24 May 2007
1 minute read
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"If it's good for farmers it's generally good for New Zealand."
New Zealand chairman Frank Brenmuhl. |
Surging world dairy prices mean Fonterra is forecasting a $5.53-a-kilogram payout for the 2007-2008 season, up $1.18 a kg on last year.
The higher payment meant the average farmer supplying Fonterra should be about $118,000 better off.
Farmers are expected use the windfall to pay off debt, upgrade equipment, buy more cows or the neighbouring farm.
A few might also splash out on cars and holidays, though some farmers downplayed that sort of spending.
Dairy Farmers of New Zealand chairman Frank Brenmuhl said: "If it's good for farmers it's generally good for New Zealand."
The extra $1.5 billion for dairy farmers would have a multiplier effect as it was spent in the community, meaning it was worth in the order of $10 billion nationally, he said.
It might also spur more conversions to dairying.
Fonterra has forecast a payment of $4.35 a kg for the 2006-2007 season, which ends on May 31.
Soaring international milk commodity prices are responsible for the New Zealand dairy boom.
And with international demand rising faster than international production, prices are expected to remain strong.
