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LIC chairman Murray King.
LIC chairman Murray King says New Zealand dairy farmers must remain ambitious about maintaining their global edge in productivity and profitability.
Speaking at LIC’s annual meeting in Invercargill, King said NZ’s dairy industry is vulnerable to the same disruption other industries have experienced in recent years from new technology and innovation.
“There are also clear disruptive threats to the dairy industry and LIC from environmental challenges, to regulation, to alternative milk products.
“We have to be constantly improving and adapting the way we do business,” he says.
“Standing still is not an option. In this age of disruption and radical change if we don’t continue to evolve we put at risk what you value most about your co-op and the industry.”
It was the first time the farmer owned cooperative held its annual meeting in Southland, attended by local farmers, LIC directors, shareholder councillors and staff from the area and Waikato head office.
King outlined plans to protect and grow the co-op, and the roadmap for adapting to disruption. This included the separation of LIC into two businesses which was completed in 2016, the transformation programme now underway and defining the co-op’s core purpose.
“LIC is in a process of change and transformation. This is about protecting the fundamentals of the co-operative while making sufficient profits to enable LIC to reinvest for the future.
“The cost efficiencies and business growth delivered in the transformation programme have been key contributors toward a better result in the 2016-2017 financial year.
“As a result of the transformation we are also expecting a significant improvement in earnings in future years.”
The next step is share simplification. In response to concerns raised by shareholders, LIC began a comprehensive review of its share structure two years ago. This review found that the current two-share structure is not best for meeting the current and future needs of the cooperative and farmers.
“We believe that simplifying LIC’s share structure by moving to a single class of shares is an important step in better positioning LIC for the future and ensuring a resilient and adaptable co-op,” says King.
“The threat of disruption in the future means that we have to be able to respond in an agile way to changes and challenges that may lie ahead.
“Moving towards a simpler share structure will help in this process by addressing the growing disparity between LIC’s two classes of shares and making it easier in future to access capital if needed.”
The LIC board will update farmers next year; no final decision has been made.
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.
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”.
The Government has announced it has invested $8 million in lower methane dairy genetics research.
The first calves of a new crossbred dairy-beef offering are now on the ground at a Pamu (Landcorp) farm near Taupo.
Academic and former Fonterra director Nicola Shadbolt has been elected as LIC director.
Acclaimed fruit grower Dean Astill never imagined he would have achieved so much in the years since being named the first Young Horticulturist of the Year, 20 years ago.
The Ashburton-based Carrfields Group continues to show commitment to future growth and in the agricultural sector with its latest investment, the recently acquired 'Spring Farm' adjacent to State Highway 1, Winslow, just south of Ashburton.
New Zealand First leader and Foreign Affairs Minister Winston Peters has blasted Fonterra farmers shareholders for approving the sale of iconic brands to a French company.
A major feature of the Ashburton A&P Show, to be held on October 31 and November 1, will be the annual trans-Tasman Sheep Dog Trial test match, with the best heading dogs from both sides of the Tasman going head-to-head in two teams of four.
Fewer bobby calves are heading to the works this season, as more dairy farmers recognise the value of rearing calves for beef.
The key to a dairy system that generates high profit with a low emissions intensity is using low footprint feed, says Fonterra program manager on-farm excellence, Louise Cook.
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