Fieldays find farmers not so flush

Waikato and Bay of Plenty dairy farmers will go to this week's Fieldays in Hamilton with $700 million less in their pockets.

Final figures for the season from dairy mega co-op Fonterra, which processes the vast majority of the regions' milk, show Waikato and Bay of Plenty farmers collectively churned out 4.51 per cent more milk after what Waikato farmers described as a "perfect autumn".

But the rivers of milk were not enough to offset a lower payout. Last year, Fonterra paid a record $5.30/kg milk solids, but the high New Zealand dollar and low commodity prices saw that fall this season to $3.60/kg.

The $700 million would be "sorely missed" from the Waikato and Bay of Plenty economies, said Waikato Chamber of Commerce president Steven Saunders.

"But the drop has got to be seen in the context of a spectacular payout last year. Farmers have been warned well in advance of this drop and they won't be taken by surprise."

Dr Saunders said businesses supplying farmers would feel the flow-on effects of the lower payout.

"That said, the sales of capital equipment are still chugging along nicely. They have had to make an adjustment, but in terms of payouts in the past, this year's is about average."

Last year, farmers spent $110.8 million at Fieldays. Spokeswoman Nicola Boland said a lower payout did not mean farmers would close their chequebooks.

- NZPA