KEY POINTS:
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.
The rise will pump $2.5 billion into the economy which Fonterra is drip-feeding into farmers' accounts through advanced monthly payments. October's rate was $4.20 kg/MS, up 60 cents on September. In September last year, the advance rate was $2.80.
Economists predict the extra money swilling through Waikato, Taranaki, Southland and other strong dairy regions will be a "growth shock" of 1.5 per cent to gross domestic product.
"It's a massive economic boost," said ANZ chief economist Cameron Bagrie. "We're being presented with a big opportunity."
Fonterra chairman Henry van der Heyden said while the money would add a lot of cash to the country, many farmers would be in catch-up mode, especially those who will have been running at a loss for the past few years when the season payouts were between $4 and $4.50.
"They won't have put a lot into their farms in the last couple of years," van der Heyden said. "Debt levels have been climbing for lots of farmers so some money will go into debt reduction."
But there were a lot more smiles on faces around the milking sheds.