Balmy winter weather and an increase in the Fonterra milk payout forecast which could bring Northland an extra $45 million this season had the region's dairy farmers beaming yesterday.
But while the 50c lift in the co-operative's forecast farmgate milk price to $7.50 a kilogram of milksolids was welcomed after last season's drought and $5.80kgMS payout, many farmers urged caution.
Kaitaia dairy farmer David Gray said: "It's excellent news, but it's only a forecast - I wouldn't necessarily budget on it.
"Many dairy farmers came out of the drought with debt and 45 per cent of them didn't make a profit last season so, hopefully, we'll get $7.50 at the end of this year."
If the forecast sticks it will be the highest Fonterra payout since $7.60kgMS in 2009-10, which was followed by $6.08kgMS in 2010-11.
Along with the 2013-14 milk payout forecast of $7.50kgMS, Fonterra yesterday announced an estimated dividend of 32c a share - amounting to a forecast cash payout of $7.82.
Chairman John Wilson attributed the higher forecast milk price to an increase in international dairy prices of 3 per cent over the past two months caused by supply constraints in Europe and China and the dollar weakening against the US dollar.
Northland Federated Farmers president Roger Ludbrook, of Ohaeawai, said the "fantastic" payout forecast was good news for the North.
Each of the region's 900 dairy farmers, who produce an average 100,000kgMS each annually, could earn an extra $50,000 - a total of $45 million for Northland.
"With production costing about $6kgMS, dairy farmers basically lost money last year, but the lovely winter and this forecast has turned things around for the dairy boys this season," Mr Ludbrook said.
Mata dairy farmer Bruce Paton said the forecast increase was no surprise as the market had been buoyant for awhile.
"Nonetheless, the news is very nice indeed - as long as we get a good production year it will make all the difference."
Mr Paton was enjoying the warm weather which had kept grass growing in Northland this winter apart from during a couple of cold snaps about a month ago. "But farmers won't be cursing if it rains as predicted next weekend," he said.
Farmers of New Zealand operations director Bill Guest, of Te Kopuru, was also waiting for rain, fearing a dry winter could point the region back into another drought.
While applauding the forecast payout increase, he warned the volatile market's swing from $5.80 to $7.50kgMS could create tax problems for unwary farmers.
"Farm debt is still a big problem so I don't think farmers will be ordering new cars," Mr Guest said.