Fertiliser chief says worst is over

Ballance Agri-Nutrients chairman David Graham believes the worst is behind the co-operative with global fertiliser prices returning to more traditional levels. The co-operative's revenue grew 27.2 per cent to $828 million in the past financial year because of higher fertiliser costs, despite sales volumes down 27.6 per cent compared with 2008 reports The Southland Times. Profit margins deteriorated in the second half of the financial year as prices were progressively reduced to reflect declining international costs. The co-operative wrote off $36.7m worth of inventory to enable it to start the new financial year with a clean slate. That led to a $6m trading loss, an $84.6m reversal of last year's record operating surplus, Mr Graham said. Speaking at last week's annual meeting in Invercargill, he said farmers could once again start to act in their own best agronomic interests. "I feel optimistic about where things are going for farmers. The future for food production is still good and will hopefully push up the prices you receive in the medium term," he said. "I feel the scales are now tipping towards the emphasis being on making the correct agronomic decision, as opposed to acting based on price alone." Sales volumes should remain around the 1 million tonnes mark for the fertiliser co-operative in the financial year to the end of next May, he said. "Our first quarter of the current financial year suggests things are returning to a more normal environment. Looking forward, we should return to long-run average profit levels."