Russel Norman

Dairy farmers $750m windfall

by Russel Norman

The Greens have been getting plenty of stick from Fed Farmers etc for daring to suggest that the dairy industry should cover the cost of their excess greenhouse emissions rather than the taxpayer, as the govt proposes. Well this article puts an interesting light on it. Dairy farmers just received an extra $750m last week – i.e. more than the cost of their increased emissions if carbon was $15/tonne.

Smiles on the farm as dairy farmers get pay rise
By Eugene Bingham, Sunday October 28, 2007

About $750 million hit dairy farmers’ back pockets last week when they got a long-awaited pay rise. The average farmer’s monthly cheque was about $70,000 as they earned 50 per cent more for their milk than at the same time last year.

Dairy giant Fonterra divvied out the extra cash in recognition of its expected record payout to farmers for the 2007-08 season.

Some farmers have already started spending the windfall. They’ve taken the increased forecast as not only an opportunity to buy machinery, upgrade the farm and clear debt, but to treat themselves a bit.

About 35 Southland cow cockies headed to the World Cup, and travel agents report farmers’ bookings for holidays in Australia, Europe and the Pacific Islands have significantly increased.

Toyota says demand for the Hilux ute is so great, it’s almost impossible to buy one. And one Hamilton car dealer said some farmers had also developed a taste for “heavy metal”, with his sales of secondhand, late model BMWs and Mercedes Benz cars up over the past three months.

“Farmers are not Flash Harrys and they don’t spend money until they’ve got it, but we’re seeing the older farmers who are probably thinking, ‘Bugger it, you’re a long time dead’,” he said.

“They seem to be a lot happier because they’ve been working for nothing for a long time so it’s a bit of a bonanza for them.”

The dairy boom is being driven by rising international prices which have prompted Fonterra to forecast the season payout will be $6.40 per kg of milk solids – up from $4.46 kg/MS last season.

Published in Environment & Resource Management by Russel Norman on Mon, October 29th, 2007   

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