Northland's recession woes could be helped by up to $9 million extra dairy payouts being pumped into the region.
The 10c lift to $5.20 per kilogram of milksolids in the Fonterra payout for this season, announced on Tuesday, is expected to pump almost $9 million into the Northland economy.
Dairy farmers around
the region yesterday hailed the increase as a positive move in a season where money had become much tighter and costs steeper.
The new final milk price is far below the record $7.90 per kilogram of milksolids which farmers received last season, but would still be the third highest payout by Fonterra since the co-operative was created in 2001.
And $5.20 is still considerably more than the $4.46kg farmers received in the 2006-07 season and $4.10kg they got in 2005-06.
Farmers of New Zealand operations manager Bill Guest said the increase would instil confidence in Northland dairy farmers who were anxiously waiting for the 2009-10 payout forecast, due before this season ends on May 31.
He praised Fonterra for securing an increase in trade with China following the fallout from the SanLu tainted milk scandal.
The advance payment this season was $4.10kg and Mr Guest said the $1.10 still to come would help farmers dealing with rising costs for imported fertiliser, local government rates and bank interest rates which were still "8 or 9 per cent on a lot of farms".
Fonterra has 10,700 suppliers nationally, with 1087 of them north of Auckland providing 8.9 per cent of the company's national milk production - and therefore collecting $10.68 million of the $120 million the payout increase has generated nationally.
Federated Farmers' Far North, Whangarei and Kaipara provincial president Denis Anderson said yesterday there were about 900 dairy farmers in the three northern districts.
They will receive an average extra $9825 each - or a total of $8,842,686 for the North.
Mr Anderson said the $5.20 payout announcement was obviously good news and with the 2009-10 payout forecast due next month there was not long to wait to find out if Fonterra would have more funds to distribute next season.
The $5.20kg consists of a milk price of $4.75kg - up 10c - and an unchanged value return forecast of 45c kg. The advance rate to farmers will be increased by 10c from the June payment.