“We pursue this vision with strategies based on Pamu’s six capitals – strategies for excellence in farming and adding value for products, investors, people and the environment.”
It is an 82-page, heady tome telling us, among other things, they’re supplying markets in Australia, China, Europe North America and more.
The acting chairman and chief executive told us “Pamu enters its fifth year of delivering on our strategy of operational excellence in creating value beyond the farm gate with real momentum.”
They’re into farm wellbeing, gender equity, animal welfare, environmental assessments farm by farm, (who isn’t) and relationships with tangata whenua.
They’ve surveyed stakeholders including our old mates at Greenpeace. What they could add they didn’t say.
I’m only surprised they didn’t deign to talk to Federated Farmers or Beef + Lamb. They might have learned something.
They also have expertise in relationships for innovation on-farm and in markets. There’s also investment in world-leading intellectual property.
They have total assets of $1.8 billion and are producing a growing range of premium products.
In the believe-it-or-not category they have 201 staff earning more than $100,000 annually and 15 earning more than $200,000. That’s almost a third of their staff earning six figures and they have a staff retention problem.
Interestingly, their total revenue was $247.1 million, up from $230m the previous year.
Their profit was just $34.2m, down from $51.9m the previous year.
So their glossy report, while waxing lyrical on a whole host of topics as to how they were bigger, better and state of the art, the harsh reality is their return on investment was but 2.2%.
If you and I achieved a return of only that magnitude we’d be down the road but it seems Landcorp is just going onwards and upwards with Government support.
As farmers, I’d respectfully suggest, they’re failures.
Mind you, ordinary farmers, the profitable kind, don’t have the expertise of people like Guy Salmon, Mike Joy, Alison Dewes or the anti-farmer campaigner Marnie Prickett that Landcorp enjoys.
Putting the Landcorp profit in perspective, they have massive leveraging ability because of their size, not to mention all of the other great assets the annual report tells us about.
With the amount of meat and milk they produce it is logical to suggest they’d get a premium for it.
With products like drench and fertiliser, the companies would be falling over themselves to supply at little over cost.
That tells me the return on their produce would be greater than yours and mine and their costs would be less.
That they produce rate of return of only 2.2% shows something is terribly wrong somewhere.
Another salutary lesson for farmers is that Landcorp went public on the evils of palm kernel and how it wouldn’t use the stuff, goodness gracious no. They then blame their profit downgrade on the drought at the end of the dairy season.
How did other dairy farmers manage in drought? Palm kernel possibly?
Minister Shane Jones has asked the Landcorp chairman to please explain. I would certainly be interested in his explanation.
My belief is Landcorp will continue to waste money on political submissions supporting capital gains and fertiliser taxes, which the Government, to its credit, ignored.
Following that Landcorp also told us they can reach the Government’s 10% methane target. Of course they can. They’ll destock and reduce their profit. Ordinary farmers don’t have that luxury.
Parliament tells us the function of state-owned enterprises is to operate successfully as a business as profitable as those not owned by the Crown.
As a mate said about the Landcorp, what farmers see is a financially unsound business with a lot of politically correct ideas driven by the extreme end of NZ’s radical environmentalists.
I realise Landcorp has a relatively new chairman in Warren Parker but he has appeared in Farmers Weekly indicating he is happy with the direction of Landcorp. I wouldn’t be.
What irritates me most is that Landcorp’s public face is that of a highly successful and innovative company.
On the internet they describe themselves as New Zealand’s world-class agricultural leader. Really.
On their website they boast “Pamu is a recognised leader not only in NZ’s agricultural sector but around the world where our farming practices are studied and emulated.”
Possibly, in a heavily subsidised environment but I can’t for the life of me imagine anywhere else.
So my view of the organisation is that you either have a dysfunctional board, an out-of-control management team or a combination of the two. I’d suggest both need to change.
