Farming leaders said yesterday that there could be a repeat of the 1990s when rough times for meat and wool farmers saw a lot of conversions to dairying.

"I would expect the rate of conversions to increase," said Federated Farmers' president Charlie Pedersen. "Possibly quite substantially."

International lamb prices had been in the doldrums recently and sheep farmers had also been struggling with the strong kiwi dollar. "Returns for meat and wool are pretty darn ordinary," Pedersen said.

This week Fonterra forecast a record payout of $5.53 a kilogram of milk solids for the 2007-08 season which will put $1.5 billion more into the pockets of dairy farmers than last year. Canterbury dairy farmers will reap another $176m in income.

Source: The Press