Landcorp to pay $27.5 million Dividend

Landcorp's results show a pleasing return to the government coffers but we need to be continually be reminded why the State is in the business of farming.

Opportunities do exist for such a large enterprise to use its size and scale for science, technology innovations, management systems and breeding enhancements, that could flow back to agriculture in general and give taxpayers and agriculture an even better return.

In general terms the value on investment returned from its huge asset is probably not much different than what has been earned by many other farmers this year, so if they are to continue they need to sell the positive spinoffs for all in agriculture, much better.

The question could be asked why Landcorp is not represented in the Red Meat Strategy group and it's data not being used in the historical cost and price benchmarking?

It continues to compete in the land market and uses its size to it's advantage as it rationalises its portfolio, although its bid for Crafar Farms died in the water, a management opportunity with the Chinese bid may still eventuate.

How would you like to see Landcorps direction unfold, and do they do enough to justify state ownership?

The Government's finances will be boosted by a $27.5 million dividend from its farming company, Landcorp reports Stuff. The state-owned enterprise, owner of $1.66 billion of land, livestock and equipment, reported a $42.2m net operating profit before tax for the year ended June 30. The result, a big improvement on last year's $10m pre-tax profit, was due to higher meat, dairy and wool prices and favourable growing conditions through the second half of the year.

Chairman Jim Sutton said it was gratifying Landcorp could make such an increased cash contribution to New Zealand after the Christchurch earthquakes."

"Our commitment in 2011-12 and beyond is to keep delivering in financial terms and in response to other big economic and environmental challenges facing this nation," he said. Included in the gains were revaluations of Landcorp's 175,000ha of farmland, which went up $17.7m to $1.05b, and of livestock, up $75.6m to $297m. It made $94.6m from a record 12.5m kilograms of milksolids and $51.3m from sheepmeat as the export lamb market made a strong recovery. The average lamb price rose 40 per cent.Beef earnings were up 28 per cent to $40.1m, along with wool, venison and forestry. It also made an extra $10.3m on land sales."

Chief executive Chris Kelly, whose pay rose 8.6 per cent to be in a $580,000-$589,000 band, said the performance reflected Landcorp's long-term strategy of diversification, people development and best-practice farming, along with the year's higher product prices.

The weather also played a big part."Conditions improved markedly in the second half after weather extremes began impacting production earlier in the season. Storms in August and September reduced lamb and calf survival, followed by dry conditions in the North Island that reduced stock numbers further in the run-up to Christmas," he said.