New figures show sales of tractors are booming, and could set a new record by the end of the year.
The New Zealand Tractor and Machinery Association (TAMA) says sales are up 17 percent on this time last year.
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While sales could hit 4500 by the end of the year, it appears many farmers are still taking a cautious approach to spending.
"The reduced Fonterra forecast of between $6.25 to $6.50 per kg of milk solids (down from $6.75) has taken a bit of a shine off the optimism in the dairy sector," said TAMA president John Tulloch.
However he expects demand could increase during the European winter because of the summer drought there.
"Some European dairy farmers will definitely have to sell stock because they can't get or afford extra feed, and I suspect that will translate into demand for our milk products," Mr Tulloch said.
He warns that Europe was only one region in the world, and it is wise for New Zealand dairy farmers to budget with ongoing caution, as recently advised by Fonterra chief executive Miles Hurrell.
He said the sheep and beef sector was still buoyant, and the drop in the New Zealand dollar would further assist this buoyancy.
"The horticulture and viticulture sectors are also looking confident," said Mr Tulloch.
However, he said all sectors were also facing increased costs with high fuel prices and the currency drop.
"You also can't control the weather, seeing the devastating effects in Europe, it reinforces the need for all of us in the New Zealand industry to be in a strong position to withstand adverse events," he said.
For farmers, he advises being in a robust enough position to ride out unfavourable weather and market conditions.
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