Fonterra milk payout forecasts which could increase dairy farmers' incomes by almost 50 per cent are at "really scary levels" says Northland Federated Farmers dairy section chairman Ashley Cullen.
While it would be "an absolute godsend" if Northland dairy farmers' earnings increased from an estimated average $616,000 each last season to $862,000 in the present season, Mr Cullen yesterday warned farmers could not count on getting the big pay rise until it was in their bank accounts in October next year.
The Fonterra farmgate milk price for the season which ended on May 30 was $5.84 a kilogram of milksolids. Together with a 32c share dividend, a cash payout of $6.16kgMS announced yesterday earned Northland's 980 dairy farmers producing an average 100,000kgMS an estimated $616,000 each - and brought $603 million into the region.
Fonterra opened the 2013-14 season on June 1 by increasing the payout forecast by $1.20 to $7kgMS, bumped it up 50c to $7.50kgMS in July, added another 30c to reach $7.80kgMS late last month, and this week increased the predicted payout by 50c to a record $8.30kgMS.
This forecast farmgate milk price - along with an estimated dividend of 32c a share - amounts to a forecast cash payout for 2014 of $8.62kgMS.