Tuesday, March 19, 2024

Young Farmers posts big loss

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A one-off gift let Young Farmers record a surplus for its latest financial year instead of a significant loss. The organisation reported a profit of $4.61 million for the year ending September 30, 2018.
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But that was because it was bequeathed a farm valued at $5.5m. 

Its trading results show losses of about $900,000 for the year though chief executive Lynda Coppersmith is confident the organisation is on the right track to ensure that won’t happen again.

The latest annual report and financial statements show a loss for the year of $722,000 while the Donald Pearson farm it was given in 2017 lost $170,000.

Coppersmith, who joined the organisation last October, said revenue for the 2017-18 year fell by $965,000, mainly because of the end of Primary Growth Partnership revenue it had been receiving as part of a dairy industry programme where it worked with DairyNZ to showcase and promote career opportunities in the agri-foods sector to hundreds of schools. 

Though funding for those projects finished at the start of the 2017-18 year Young Farmers continued to deliver outcomes it had been contracted to provide without being funded for them.

During that time staff were retained while a significant but ultimately unsuccessful funding opportunity was explored with another major industry partner.

Since then staff numbers have reduced by about a third, from 27 to 19, through natural attrition, cutting labour costs by about $500,000 – though that took a few months to achieve.

Coppersmith said Young Farmers is pursuing other industry funding opportunities, some of which are looking promising, while it has a number of other balls in the air.

“We’re focused on what the industry is looking for and how to best provide for our members.”

In the meantime, changes to the organisation’s business model are being considered to make it more agile.

Those changes are aimed at removing financial risk, which Coppersmith said is important for a not-for-profit organisation.

“We need to me more nimble.”

Due to the lower wage bill and proposed structural changes Coppersmith is confident there will not be a cash loss this financial year though there might be a small book loss. 

Chairwoman Ash-Leigh Campbell said the Donald Pearson farm’s loss was caused by lower-than-acceptable milk production because the farm was understocked at the start of the production season and a wet spring, which made the rest of the season difficult.

There was also an unrealised loss on the devaluation of Fonterra shares.

She said low-producing stock that came with the farm have since been replaced with higher-producing cows. A new farm manager has been employed and farm advisers involved to ensure on-farm production is at a much more acceptable level.

Coppersmith said given the farm’s location on the outskirts of Auckland, between Manurewa and Whitford, it will be a wonderful educational tool to continue to promote primary sector careers to Auckland school pupils.

With the farm legacy member funds increased from $1.5m to $5.76m, putting the funds in the strongest position they have ever been.

However, the organisation still faces funding challenges and the board and management team is working to reduce the cost structure to align with committed income levels, she said.

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