MSA triumph
OPINION: Methane Science Accord, a farmer-led organisation advocating for zero tax on ruminant methane, will be quietly celebrating its first foray into fertiliser co-operative governance.
Ravensdown chief executive Garry Diack says it has been a challenging period for traditional farming.
Fertiliser co-operative Ravensdown says farmers bought 27% fewer products last financial year as prices soared.
Announcing its annual results, the co-operative noted while farmers’ annual spend remained constant, tonnage sold dropped from 1.2 million tonnes the previous year to 895,000 tonnes for the financial year ending May 31, 2023.
It ended the year with a net profit before tax of $429,000. A tax benefit takes the co-operative’s 2023 net profit after tax from continuing operations to $2.9 million.
Reported revenue of $977 million includes insurance proceeds for flood damage and a fire at the co-operative’s Napier plant and is on par with last year’s reported revenue of $922 million. The co-op is not paying a rebate to shareholders.
Ravensdown chief executive Garry Diack notes that it is a challenging period for traditional farming practice.
Diack says Ravensdown’s policy has been to deliver competitive pricing throughout the year, effectively absorbing fertiliser prices in recent times through reduced margin.
“Having distributed value in this way, we finished the year below forecast income and are not in a position to pay a year-end rebate.
“We have also undertaken specific initiatives to reduce operating expenditure through a review of the organisation’s capital expenditure and overhead costs.”
Despite the difficult operating environment, Ravensdown has maintained a strong focus on working capital, with tighter inventory management and reduced supply chain volatility resulting in a positive $119 million cash turnaround from the previous financial year. Stock impairment at year end is $4.2 million.
Bruce Wills, Ravensdown chair, noted the coop’s ongoing focus on balance sheet strength within this high cost and low profitability environment.
“This year’s financial results, which include an improved equity ratio from 62% to 74%, has highlighted the importance of a conservative approach to managing the co-operative’s balance sheet.
“While external factors throughout 2023, such as Cyclone Gabrielle and increasing farm input costs, put pressure on cashflow and profitability, equity levels remain robust.
“Within a broader operating environment, we have seen signs that current fertiliser prices will maintain their stability through spring.”
Ravensdown continued to invest in technologies and partnerships to bring future scale benefit to customers and shareholders, such as the sustained development of HawkEye, AgriZeroNZ for greenhouse gas reduction technologies, and the new commercial venture arm, Agnition.
BNZ says it is backing aspiring dairy farmers through an innovative new initiative that helps make the first step to farm ownership or sharemilking a little easier.
LIC chief executive David Chin says meeting the revised methane reduction targets will rely on practical science, smart technology, and genuine collaboration across the sector.
Lincoln University Dairy Farm will be tweaking some management practices after an animal welfare complaint laid in mid-August, despite the Ministry for Primary Industries (MPI) investigation into the complaint finding no cause for action.
A large slice of the $3.2 billion proposed capital return for Fonterra farmer shareholders could end up with the banks.
Opening a new $3 million methane research barn in Waikato this month, Agriculture Minister Todd McClay called on the dairy sector to “go as fast as you can and prove the concepts”.
New Zealand’s trade with the European Union has jumped $2 billion since a free trade deal entered into force in May last year.
OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.
OPINION: Politicians and Wellington bureaucrats should take a leaf out of the book of Canterbury District Police Commander Superintendent Tony Hill.