LIC lifts half-year revenue on strong demand for dairy genetics
Herd improvement company LIC has posted a 5.2% lift in half-year revenue, thanks to increasing demand for genetics.
Speaking at LIC’s annual general meeting in Taranaki this month, he explained how data will unlock the next wave of productivity and sustainability improvements for farmers.
“Dairy farmers are being tested as never before. They are looking for certainty and trusted partners to help them navigate the rapidly changing domestic and global industry. We want to help farmers meet those challenges head-on,” said McNee.
“Starting with the first national herd database, one of the strengths of our co-op has always been our ability to use our data to drive genetic gain, produce better milk and help farmers save time and increase their profits.
“Now, more than ever, we’re using the data our co-op collectively gathers and shares to give our farmers the ability to make faster, more informed decisions on farm. In our genomics work, big data is allowing us to supercharge the rate of genetic gain.”
McNee said LIC is moving in its digital transformation agenda, including moving one billion pieces of farm data into the cloud to open up new opportunities.
“As we move from a ‘cow-focussed’ business to a truly ‘customer-focussed’ business, we will need to [keep spending] on R&D and take advantage of emerging technologies. This work is shifting us from creating product for cows to building ecosystems for our customers to support them and their farms.”
LIC chairman Murray King, a Nelson dairy farmer, told the meeting the co-op’s “solid” financial results show it well able to keep spending on technology and data platforms to advance genetics and herd management innovations.
For the year ending May 31, 2019, LIC reported $22.2 million net profit after tax (NPAT), up 139% from $9.3m the previous year. It paid $15.6m in dividends to its 10,300 shareholders, the largest since 2013.
“The work we have completed since 2016 to shape LIC into a modern, progressive co-op have enabled this year’s solid results,” said King.
“2018-19 [saw] our new innovation-led growth strategy and a focus on the core NZ dairy industry. This year we will… take full advantage of data to benefit both LIC and our farmers. We believe these results are sustainable and we… will build on them in the coming years.”
LIC’s spending on R&D in 2018-19 was $13.6M -- 5.5% of revenue and well above the primary sector average of 1%.
The co-op got extra funding from MPI and MBIE for two key projects aimed at improving the health and wellbeing of NZ herds and more sustainable milk production.
“Our Resilient Dairy programme with DairyNZ and MPI will strengthen our existing R&D to keep our farmers and NZ leading global pastoral dairying,” said King.
This year LIC won ‘Cooperative Business of the Year’ at the Cooperative Business Awards. It was recognised for “significant and positive impact” among co-ops and for returning benefits to its 10,300 shareholders.
LIC is a finalist in the NZ Biosecurity Awards for its response to Mycoplasma bovis.
King says the co-op’s daily testing and biosecurity in the face of M. bovis are important to protect the national herd.
